Comparing Singapore Home Loan Fixed Deposit Rates

Posted by Maggie Ang on February 2, 2017

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Singapore banks have launched various home loans pegged to fixed deposit rates since 2015, which was first launched by DBS. Today, 5 banks, mainly DBS, UOB, OCBC, Standard Chartered and Maybank are competing in the market with their attractive home loans. 


Each has its own unique points. How do you distinguish? Let’s look at how each bank define their home loan fixed deposit rates

DBS Fixed Deposit Home Rate 9 (FHR9)

Announced on 1 April 2017, DBS is launching mortgage products pegged to a new base rate, FHR9.  DBS defines FHR9 as the 9-month fixed deposit rate for amounts within S$1,000 to $9,999 or such other sum as they may specify.  Currently, FHR9 is at 0.25%

 

UOB 15-month Fixed Deposit Property Loan Rate (FDPR15)

UOB defines FDPR15 as the 15-month fixed deposit rate for amounts less than S$50,000 or such other sum as they specify. Currently, FDPR15 is at 0.25%

 

OCBC 15-month Fixed Deposit Mortgage Rate (FDMR15)

OCBC defines FDMR15 as the 15-month fixed deposit rate for OCBC Bank individual customers for amounts within S$5,000 to S$20,000 or such other sum as may be determined by them. Currently, FDMR15 is at 0.25%

 

Standard Chartered Fixed Deposit Rate (FDR)

Standard Chartered defines FDR as the 48-month time deposit rate for an amount below S$20,000 or such other amount as they may specify. Currently, FDR is at 0.50%

 

Maybank 36-month Fixed Deposit Rate (FDMR36)

Maybank defines FDMR36 as the 36-month Fixed Deposit Rate for at least $1000 deposit and above. Currently, FDMR36 is at 1.20%

 

Overall Comparison

Table to compare home loan fixed deposit rates side-by-side

Bank

Home Loan Fixed Deposit Rates

Current

Historical High

Historical Low

DBS

FHR9 - 9-month fixed deposit rate for amounts

within S$1,000 to $9,999

0.25%

1.5% in 2001

0.05% in 2011

UOB

FDPR15 - 15-month fixed deposit rate for

amounts less than S$50,000

0.25%

0.5% in 2009

0.25% in 2011

OCBC

FDMR15 - 15-month fixed deposit rate for OCBC Bank individual customers for amounts within S$5,000 to S$20,000

0.25%

1.8% in 2005

0.25% in 2011

Standard

Chartered

FDR - 48-month time deposit rate for an

amount below S$20,000

0.50%

1.00% in 2010

0.50% in 2011

Maybank

FDMR36M - 36-month fixed deposit rate for an

amount from S$1,000

1.20%

5.625% in 1998

   1.15% in 2010

 

 FD TREND CHART.png

Which Home Loan Fixed Deposit Rates should you choose?

 

Different bank pegs differently with their Fixed Deposit Rate, be it amount and tenor. If anyone who walks to the branch of any bank, and places Fixed Deposit of the specified amount, they will be offered as per what is stated above. When bank uses their FD rates for their home loan packages, they will not stay put as 1 indicator for all housing loans in future. For example, previously, DBS offers FHR18 for all housing loan customers, and this is 18-month fixed deposit rate for amounts within S$1,000 to $9,999. Now, they are offering FHR9. So, what happens to those customers who have obtained FHR18? Nothing changes, so long as DBS does not change their FHR18 FD rates.

Other than Maybank, you can see a common ground for FD trends for most banks, even though they peg differently, at different amount and tenure. From the graphical trend, one thing to note is that they decrease their FD rates in 2011, went up a bit in 2012, then remain down or constant till 2017.

What happened in 2011, was when the stock and the financial markets in US hit a downfall macroeconomic crisis. In 2012, the market started to pick up with good returns, and has been stabilised.

Another important thing to take note is the banks usually do not have lending rates lower than their saving rates because lending rates involve risks, risks lending to individual or corporations. So, is FD rates volatile? No, it is not.

Therefore, when you compare, you need to ask yourself the following questions:

  1. Which bank has the higher chance of increasing their FD rates in 2-3 years time?
  2. Do the banks have enough funds to support the costs of structures of the bank?
  3. Based on historical trend, using their highest and lowest peak, which one has the least chance to increase to a certain percentage?

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Topics: approval in-principle, Home loan fixed deposit rates

Written by Maggie Ang

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