MoneySmart.sg, OCBC offer home loan priced off fixed deposit rate

MoneySmart.sg, OCBC offer home loan priced off fixed deposit rate

SINGAPORE - Online personal finance portal MoneySmart.sg on Friday said it would offer a home loan rate from OCBC at a three-year promotional rate of 1.63 per cent, meant to be the lowest in town for mortgages linked to a fixed deposit rate. The deal runs for 15 days starting Monday.

Through MoneySmart.sg, OCBC will offer a loan based on its 36-month fixed deposit mortgage rate of 0.65 per cent per annum, plus a spread of 0.98 per cent per annum for the first three years. From the fourth year onwards, the spread goes up to 1.5 per cent.

This promotion is only applicable for loans of at least S$500,000, and can be used as a fresh loan, or for refinancing.

OCBC has been offering home loans priced off a fixed deposit rate since November. It joined DBS in offering such a product, which is supposed to be less volatile than loans based on market rates such as the Singapore Interbank Offered Rate (Sibor) and Swap Offer Rate (SOR). Most floating-rate mortgages are priced off Sibor.

The benchmark rates used by DBS and OCBC for their fixed-deposit-linked mortgages are not the same. OCBC is fixing such home loans off its 36-month Singapore-dollar fixed deposit rate for amounts between S$5,000 and S$20,000.

DBS is basing such home loans off its 18-month Singapore-dollar fixed deposit rate for amounts within S$1,000 to S$9,999. This is now at 0.6 per annum, and with a spread of 1.35 per cent for three years, borrowers would have to pay a rate of 1.95 per cent per annum if they took this loan from DBS now.

The Singapore Press Holdings (SPH) has invested in Money-Smart.sg through its SPH Media Fund.


This article was first published on Feb 15, 2016.
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