WHAT IS THE BEST HOME LOAN IN SINGAPORE IN 2024?

When it comes to buying your home, it goes without saying that we want to (and should) rack in as much savings as humanly possible and get the best home loan in Singapore. We are talking about something that takes 2-3 decades to pay off after all!  It is possibly the biggest purchase of our lifetime. Whether you are refinancing your home loan or taking a new loan, this guide provides you with the current best rates.

Resources on the best home loan topic typically withhold vital information (such as rates from the second year onwards or minimum loan amount, etc.), but not this guide. Here, we have gathered and analyzed over 100 mortgage loan packages across 16 banks in Singapore to help you find one that best fits your situation.

This article only has one aim: to equip you with the information you need to make an informed decision as a savvy consumer. If you would like to clarify your doubts with a professional mortgage advisor at any point, feel free to click on any of the buttons to fill in the form.

Contents 0 List of home loan packages 1 Best Fixed rate for HDB 2 Best Board rate home loan for HDB 3 Best SORA rate home (Floating) loan for HDB 4 Best Fixed rate home loan for Private Properties 5 Best SORA rate (Floating) home loan for Private Properties 6 Best Board rate (Floating) home loan for Private Properties 7 Best home loan for Buildings Under Construction (BUC) 8 Summary of the Best home loan across all categories

List of all home loan packages in Singapore

The table below consists of raw data, which includes all the housing loan interest rates in Singapore, updated almost in real time. You can click on the topmost row to sort it by interest rate, from the cheapest home loan to the most expensive one. Of course, just the rates alone do not speak for everything! We understand that the data dump might seem like information overload to the layman who may not know where to begin. Scroll down further or refer to the table of contents above for the breakdown of the best home loans in each of the different categories.

*Monthly instalment below based on $100,000 loan amount over 30 years loan tenor

Differentiating between categories

It would not do to compare apples and oranges! Home loan categories are differentiated by their distinctive rate types, each with its own pros and cons. There are 2 main categories, these being fixed rate and floating rate home loans. Board rates are a major subcategory under floating rates. In addition, different rates are offered for both private loans and HDB loans. Here, we zoom into a succinct explanation of and the best rates for each of the different categories so that you can discover the best home loan in Singapore for the category of your choice.

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Best Fixed rate home loan for HDB

As a general rule, fixed rate home loan packages come with higher interest rates than floating rate packages. Still, the advantage is that their rates are fixed during the initial lock-in period and will not change come hell or high water. Thus, home owners can be assured that they will not have to pay a higher rate even in the case of a nasty economic downturn. This is in contrast to floating rate loan packages, which are inherently volatile because they are tied to the current economic outlook.

This table shows the best fixed rate home loans for HDB during the current period, which are being offered by DBS, OCBC, Hong Leong Finance (HLF), Standard Chartered Bank (SCB), and CITI.

Fixed rates are usually more expensive than floating rates by about 3.9% annual interest. For a loan of $1,000,000, this translates to approximately $3900 a year.

After the lock-in period, interest rates become ‘floating’ which makes them the same as their floating rates package counterparts. In essence, reference rates (aside from HDB Board) are all of the same nature. (More on that later)

Fixed rate home loans have recently decreased in availability and fallen amid rising interest rates and a rising cost of funds.

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Best Board rate home loan for HDB

Board rates are internally determined by the banks. Some people are distrustful of them because of a lack of transparency as to the benchmarks used. Additionally, there is no stopping the banks from raising them every now and then based on their own criteria/mood. Still, their rates can be attractive.

The top Board rate home loan for HDB properties as of right now are offered by DBS and HLF.

DBS specifically uses a Board Deposit Home Rate that is pegged to its fixed deposit rates. This is also a type of board rate but is more transparent as it aligns with the bank’s fixed deposit rates. It is harder for banks to raise these rates because it represents a cost to them when they do so. FD-pegged rates were very popular in the early days because they were very low. However, they have since increased significantly from their initial rates, causing their hype to fall. You can read more about this here.

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Best SORA rate home (Floating) loan for HDB

For floating rate home loans, we have recently seen SORA (short for Singapore Overnight Rate Average) rise to become the benchmark SGD interest rate, replacing the old SIBOR (Singapore Inter-bank Offered Rate) and SOR (Singapore Dollar Swap Offer Rate) that are being phased out. SOR was discontinued for good in June 2023, and 1-month and 3-month SIBOR will be discontinued in December 2024.

The change in the benchmark is not without good reason. Because they are based on the prevailing rate on a single day, SOR and SIBOR interest payments can change abruptly alongside interest rate fluctuations. Meanwhile, SORA rates are based on a compounded average of daily rates, making them less volatile.

Being pegged to SORA, home loan interest payments will increase or decrease every now and then in reference to it, hence ‘floating’. As the rate is the same across banks, they typically differentiate themselves by having different spreads and incentives.

With reference to the table below, it is recommended to consider OCBC, SCB, RHB, MB, and DBS’s loan packages if you are a prospective HDB buyer interested in loan rates that move in tandem with reference rates like SORA.

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If eligible, individuals interested in purchasing a HDB property may obtain a loan directly from HDB. In a nutshell, HDB offers you stable interest rates but requires that you pay more, as opposed to banks which offer lower, competitive interest rates hoping that you will do business with them amidst their numerous competitors. Do go over the pros and cons carefully to see which option suits your lifestyle and circumstances better.

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Best fixed-rate home loan for Private Properties

When it comes to financing your property purchase, HDB and private properties differ in terms of down payment, cash requirements, loan quantum, etc. For private properties, the following banks appear to be providing borrowers with the best-fixed rate home loan packages. With interest rates ranging from 2.450% to 4.437%, you will have a monthly mortgage repayment sum of around $6,692 to $8,286 for a 25-year home loan of $1,500,000.

This table shows the best fixed rate home loans for private properties during the current period, which are being offered by SCB, DBS, RHB, State Bank of India (SBI) and BOC

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Best SORA rate (Floating) home loan for Private Properties

For this loan category, do note that these loans are strictly for completed properties and are not applicable to buildings under construction. If you are keen on loans for buildings under construction, keep reading, as they will be elaborated on later in this article!

3M SORA refers to SORA within the past 3 months (90 days), whereas 1M SORA refers to SORA within the past one month (30 days). If you foresee that interest rates will rise in the future, choose a long-term rate. Conversely, we would advise you to go with a short-term rate in a declining to flat-rate environment.

Most consumers seeking home loans from banks in Singapore are private property buyers. They generally opt for floating rate home loan packages when they feel optimistic about the state of the global economy over the next couple of years. Singapore’s economy is inextricably tied to that of the rest of the world due to globalization, and this would also translate to lower interest rates. Conversely, if they feel less than optimistic, they might opt for a safer fixed rate instead.

CIMB, Standard Chartered Bank, MB, RHB, and DBS currently offer the most attractive floating home loan rates for private properties.

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Best Board rate (Floating) home loan for Private Properties

The current best board rates for private properties are offered by DBS and HLF.

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Best home loan for Buildings Under Construction (BUC)

Fixed home loan packages are not applicable to buildings under construction as they are all pegged to floating rates.

While properties that are still under construction may have more risks than a completed property, developers often incentivize buyers with per-square-foot discounts, absorption of stamp duties, or other administrative costs. Besides the monetary savings arising from an early purchase, you may be able to benefit from a lower interest rate as well—BUC loan rates are not necessarily higher when compared with loans for completed properties.

Besides the possibility of conversion when the property receives its Temporary Occupation Permit (TOP), note that there are loan packages that are not valid for buildings under construction.

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Summary of the Best home loan across all categories

If you are getting a HDB flat and securing $500k in loans, monthly rates can start off as low as about $2,243, with about $1,028 going into interest repayment at the initial phase, assuming a loan tenure period of 25 years. If you are buying a private property and securing $1mil in loans, monthly rates can start as low as $3,925, with about $2,020 going into interest repayment, assuming a loan tenure period of 30 years. As for the type of rate, fixed rates and fixed deposit pegged rates packages look to be good choices at this point. Your choice of bank boils down to conditions you need to fulfil and perks you prefer to have. However, bear in mind that rates move very rapidly. This table* offers a ballpark, but to get the latest rates, you can speak to our mortgage advisors.

*from year 1 to year 3 of loan

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Current economic outlook

While Singapore has enjoyed lower interest rates since the start of the pandemic, it seems like the tides are changing. On March 16, the US announced its first interest rate hike since 2018, with the central bank projecting six more successive hikes this year. An increase in SORA is thus expected to happen as interest rate trends here tend to follow that in the US. Thus, one may find locking in the current interest rates before they rise to be an attractive option.

Best home loan for 1st time home buyers

For 1st time buyers, it is advised that you go with a stable interest rate package. They are easy to understand and provide more security. In this current economic climate fraught with uncertainties, it may be wise to maintain a certain level of stability when it comes to a home loan. This will ensure that your financial portfolio is not overly risky by balancing out the risk you may have in other areas of your life, such as your career etc.

Best home loan for investors

if you are a little savvier with the property market, you can opt for the riskier floating interest rates. Of course, more risk always translates to better rewards. You can consider board rates or even fixed deposit pegged rates. These packages allow you to bail out quickly and switch to another loan package fast, which makes it suitable for someone who follows the market very closely. On top of that, if you have more cash on your hand and seek some stability in your portfolio, a fixed deposit pegged home loan is usually a good bet. If deposit rates go up, you no doubt pay more for your mortgage loan, but you also earn more interest from your savings account. Through this strategy, you hedge your financial risks. 

Last but not least 

One more thing to note before you set off; you also need to get yourself familiar with the various terms that are attached to any home loan package, including things such as your reference rates, lock-in period, reimbursement clauses and so on. Think of it as buying an air ticket and checking if extra luggage allowance is included, meals are catered, etc. Of course, it is more complicated for home loans. For more information, check out more by reading the fine print for home loans.

If you are refinancing your home loan and want to find the best refinancing rates package, you must again be aware of another set of guidelines. In this case, check out our ultimate refinancing guide.

Lastly, you may want to know that banks roll out home loan promotions from time to time based on their supply and demand for funds. Hence, it pays to be updated on their interest rates regularly if you are looking to buy/refinance your home soon. Revised daily, the table you see above is about as updated as it can get when it comes to all the home loan packages in Singapore, (sometimes even more so than the published rates of banks themselves.) Be sure to bookmark this page and check out the latest rates in 2024!!

Disclaimer: Every effort has been made to ensure that the information provided is accurate. You must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a professional advisor to take into account your particular objectives, financial situation and individual needs.

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Glossary and useful resources

Additional Buyer’s Stamp Duty (ABSD): This is a tax that you pay on top of the standard BSD when buying a property. For PRs, foreigners and entities, this is always payable. For Singaporean citizens, it is payable for second and subsequent properties. You can calculate it here.

Approval-in-Principle (AIP): AIP is an agreement with a bank prior to your property purchase that guarantees that bank will extend you the loan when you need it. It is absolutely advisable to get it before your purchase, lest you get blindsided!

Buyer’s Stamp Duty (BSD): This is a tax that every home buyer has to pay when they purchase their property. You can calculate it here.

Decoupling: Decoupling is a mortgage strategy where couples who co-own a home transfer full ownership of it to one of them so that they can purchase another property under the other party’s name, conveniently bypassing ABSD. You can read more about it here.

Lock-in period: It is inadvisable to refinance during the lock-in period because you would have to pay a penalty. The ideal timing for refinancing is three months before the lock-in period ends and the new, higher rates kick in.

Payment per period (PMT): PMT is the monthly repayment sum for your loan that pays back some of the principal amount and interest. You can calculate it here.

Total Debt Servicing Ratio (TDSR): TDSR is basically a test used to ensure that your monthly salary is not going excessively towards repaying your loans and such. By not exceeding it, you are proving that you are not spending beyond your means and are thus capable of reliably repaying your loans in the future. You are hence eligible for a loan and your AIP. You can calculate your TDSR here.