UOB Singapore Mortgage Products

Posted by Sean Lim on February 1, 2017

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UOB Singapore offers mortgages for properties located in Singapore, Malaysia, Japan (Tokyo), Australia and UK (London). They will lend against residential, commercial and industrial properties in Singapore, be it owner occupation or investment. Outside Singapore, selected residential properties for investment purpose are accepted securities to the bank. The mortgage products are pegged to fixed rates, 3M SIBOR, internal board rates, 36M fixed deposit property rate (36M FDPR) and Cost of Funds for overseas properties.

Refinancing customers of Singapore mortgages may enjoy subsidies to cover conveyancing fees. A key introduction was the new tracker rate, 36M FDPR, launched in April 2016.



Rates Types

 

36M FDPR

36M FDPR is the short abbreviation for 36M fixed deposit property rate. It is also stated as FD Property Loan Rate_36M in the Facility Letter (loan contract) of UOB Singapore. It is calculated based on UOB Singapore’s thirty-six (36) month Singapore Dollar Fixed Deposit ratefor amounts less than S$50,000 or such other sum as the bank may specify.

 

SIBOR

UOB Singapore offers interest rates pegged to 1M SIBOR and 3M SIBOR. The interest rate payable upon first disbursement of the Loan shall be determined based on the 1-month or 3-month SIBOR prevailing on the date of first disbursement of the Loan which will be published in the Singapore Business Times on the next business day immediately following the date of first disbursement of the Loan. Upon determination of the interest rate, it shall remain fixed for the interest rate period of 1 or 3 month(s).

 

Board Rates

UOB’s Board Rate, termed as Bank’s Mortgage Rate comes in various versions, as it depends on the cost of funds for the bank plus 3M SIBOR (financial indicator) at the point of offer. The bank reserves the right from time to time to change the financial indicator to calculate the Mortgage Rate. So a Mortgage Rate may differ from loan to loan, and from customer to customer even though the loans may be similar. For any changes to the Mortgage Rate, UOB has the right within 30 days to inform customer, if market or economic conditions or financial indicator change.

 

Fixed Rates

Interest rates are fixed as per Letter of Offer for a stated period of time. Under no circumstances should the bank revise a fixed interest rate during the period for which the interest rate is stated as fixed. In other words, fixed rate will remain fixed during the mentioned number of years or months.

 

Terms that you should watch out for

GENERAL

  • Always check that the name(s), address of the subject property, interest rate and tenure are correct.
  • The Borrower shall fulfill all of the following conditions to the satisfaction of the bank (in form and substance), within seven days from the date of this Facility Letter, failing which this offer lapses unless otherwise agreed by the Bank. Which means from the date of the Letter of Offer, you have 7 days to accept the loan offer.
  • Subject to all preconditions to disbursement (including those stated on the Loan Contract and in the Standard Terms) being met, the Credit Facilities shall be available to the Borrower for drawdown for a period of six (6) months from the date of the Facility Letter.
  • Interest on the loan is calculated on a monthly rest, where the advertised rate is the same as the effective interest rate, because interest is calculated based on the reduced balance of the loan.
  • The Loan shall be drawdown upon giving the Bank at least seven (7) Business Day’s notice in writing.
  • The Loan repayment is by way of monthly instalments (comprising principal and interest) on the first day of each month. If first disbursement is between 1st – 10th day of the month, monthly repayment will commence on the 1st day of the month immediately following the month of such disbursement. For other dates, repayment will start on the 1st day of the second month immediately following the month of such disbursement.
  • If any instalment is payable on a non-business day, payment shall be made on the next business day or such other day determined by the Bank.
  • The Borrower is required to open a UOB Current Account / Savings Account / I-Account (“UOB Account”) with the Bank upon acceptance of this Facility Letter. The Borrower shall fund the UOB Account for the Bank to debit the monthly instalment repayments of the Loan.
  • Fire insurance for the Property must be insured with UNITED OVERSEAS INSURANCE LTD ("UOI") or such other insurance company as may be approved by the Bank. If you choose a non-approved insurance company, UOB will charge an administrative fee on top of the fire insurance premium.
  • In the event the applicable SIBOR falls below zero, the applicable SIBOR for determining the applicable interest rate shall be deemed to be zero. In other words, the floor rate will be zero.
  • The Loan which is prepaid in full or in part, cannot be redrawn and reborrowed. However, private property may qualify for equity cash out in the form of a term loan.

 

NEW PURCHASE

  • The Housing Loan shall be used for payment of part of the Purchase Price of the Property.
  • If the property is purchased with benefits, subsidies, rebates, discounts or vouchers or other incentives from the vendor or any other party, the Bank shall have the right to reduce the quantum and/or review the terms of the Credit Facilities or cancel the Credit Facilities. So please do declare accurately.

 

REFINANCING

  • The Housing Loan shall be used to refinance the loan outstanding from the existing mortgagee and given ranking by CPF Board. Any amount of the Housing Loan in excess of the redemption amount of the existing mortgagee shall be cancelled and no cancellation fee shall be levied on the amount so cancelled.

 

OWNER OCCUPATION

  • The Property shall be owner-occupied for the full tenor of the Credit Facilities. The Bank reserves the right to recall and/or cancel the Credit Facilities immediately if, at any time the Mortgagor rents out, sublets, licenses or parts with possession of the Property without the Bank’s priod written consent. Always declare the purpose of the Subject Property accurately, be it Owner-occupied or Investment.

 

REDEMPTION

  • Redemption of the Loan may be made subject to fulfillment of all of the following conditions: (a) serve the Bank 3 months’ prior written notice or in lieu of such notice, pay the Bank 3 months’ interest, AND (b) pay the Bank a redemption fee if applicable.

 

PARTIAL PREPAYMENT

  • Partial prepayment of the Loan may be made subject to fulfillment of all of the following conditions: (a) serve the Bank 1 months’ prior written notice or in lieu of such notice, pay the Bank 1 months’ interest on the amount prepaid, AND (b) no prior notice for redemption of the Loan has been given to the Bank, AND (c) at the time of partial prepayment, remaining Loan tenor is not less than 5 years, AND (d) each partial prepayment shall be in the sum of not less than S$5,000.00 and in multiples of S$1,000.00, AND (e) the partial prepayment would not cause the Loan to be fully repaid during the lock in period if any, AND (f) pay the Bank a redemption fee if applicable).

 

CANCELLATION

  • If the Loan is cancelled after acceptance of this Facility Letter or left undrawn on the expiry of the Availability Period, a cancellation fee of 1.5% flat on the amount cancelled or left undrawn, shall be payable.

 

AUSTRALIA, UNITED KINGDOM, MALAYSIA, JAPAN

  • Processing fees may be payable for loans granted for properties in Australia, United Kingdom, Malaysia and Japan.

 


 

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Topics: banks

Written by Sean Lim

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