Which Banks Give the Best Housing Loan in Singapore?
Looking around for the best bank that will offer you a good deal when availing of a housing loan is not only practical, it’s also a prudent move. Investments as big as this ought to be decided carefully, especially since there are several options and arrangements you have to understand. But what should really matter is if these options provided by banks will be able to fit into your own requirements.
What Is a Housing Loan for?
If your intention of getting a housing loan is so that you could occupy the property and use it for long term – like 10 years or more – then it would be wise to pick a bank that will provide good rates based on this whole tenure. While some banks will offer manageable interest rates and payment terms for the first three years, you should also consider what the rates would amount to after this brief period, while factoring in refinancing options.
Do you intend to take a loan to flip the property and profit from it after a short period of time? Then going with the lowest rates within these first three years already offers a good payoff.
Take note that loan rates among banks in Singapore are adjusted regularly. As a result, variables and terms will be based on current economic and market conditions. So, if you’re planning on making a purchase of property, your decision shouldn’t just lie on these rates alone because a good offer today may be different next month. You will need to look beyond rates and terms to choose the best option.
How are the Payment Terms Managed?
Other borrowers are comfortable about knowing the exact amount for their repayments. As such, they may not mind paying a premium for this when money coming out is already determined. Then there are those who want to take advantage of low interest on a floating rate that is usually determined by current market conditions. In this case, banks are willing to offer either options, but the choice will lie on your ability to manage payments.
What are the Risks Involved?
Loan packages in banks slightly differ from each other in that some offer rates based on the SIBOR (Singapore Inter Bank Offset Rate), while others compute this based on the SOR (Swap Offer Rate). These are indexes that depend on current conditions in the market, thus you may need to be aware of the present rates for these before deciding on the loan.
Nonetheless, it is important to note that:
- SIBOR is dependent on base rates among banks in Singapore. The risks are lower and more stable against market changes.
- SOR is affected by exchange and interest rates in the American stock market. While it is high risk, the SOR could drop at low rates that could benefit your loan.
We are sure you have many questions that you want answered. Your loan consultants at Suite Capital are here to answer them. Contact us today!