Standard Chartered Bank of Singapore is one of the most renowned banks locally and regionally. It is a large global financial institution with a credible history of mortgaging services. In 2017, the bank had given an outstanding loan of approximately S$138 billion to retail customers globally.
In 2017 and early 2018, the bank offered particularly accessible floating rates with low total mortgage costs, but its first-year interest rates were less affordable. Therefore, its loans are better for individuals interested in loans with low total mortgage costs, but not individuals that require frequent refinancing for their home loans. Standard Chartered also offers innovative interest offset accounts for individuals that want to open a deposit account that can be used to reduce the cost of their private home loans.
Standard Chartered bank provides budget-friendly home loans in terms of total cost due to its low floating interest rates. However, Standard Chartered does not typically offer the most reasonable first-year interest rates. Home loans tend to constantly adjust, so it is recommended that you study each loan before applying.
The bank also developed another special feature called MortgageOne where two-thirds of the deposit earns the same interest rate as the mortgage while the other third earns 0.25% annually. This account, which is only available to borrowers with private home loans, provides them with a means to earn additional income to repay their home loans.
Standard Chartered charges standard fees along with their home loans which include a partial repayment fee, full redemption penalty and cancellation fee.
Standard Chartered charges standard fees along with their home loans which include a partial repayment fee, full redemption penalty and cancellation fee. The table below outlines the bank’s fees by loan type.
|Loan Type||Partial Repayment fee||Full Redemption Pinalty||Full Redemption Pinalty|
According to Singapore’s benchmark reform on interest rates, merchant banks like Standard Chartered have adjusted to the new SORA rate to comply with MAS regulations.
So Standard Chartered’s refinancing bundles and charges are based on the 3-month Compounded SORA rate, Standard Chartered’s 36-month FDR (36M FDR) rate and its fixed rates. Swap Offer Rate (SOR) and Singapore Interbank Offered Rate (SIBOR) prices are no longer applicable.
|Bank||1st Year Interest||Lock-in Period|
|SCB SORA||Check Live Rates||1 Years|
|SCB SORA||Check Live Rates||1 Years|
Your analysis of the market should determine your choice of loan type and its ultimate impact on your total loan cost. It is not necessary to consider a much longer time horizon because you can always refinance your loan after your lock-in period has ended.
If you notice that interest rates are generally stable or declining when you study market charts, then go for a floating interest rate. Floating rates are usually lower than fixed rates because banks willingly offer lower rates for short term loans to gain your patronage – and demand higher charges when market rates increase. Moreover, fixed rates tend to be slightly costly because of the premium charges placed on loans.
When overall interest rates are rising, it is advisable to refinance with a fixed rate and not a floating rate. Although fixed rates are slightly higher than floating rates, they help customers save, if market rates rise significantly.
For example, imagine Mr A was able to refinance at a fixed rate of 1.5% for the next three years and Mr X also chose the option of refinancing at a floating rate beginning at 1%. If market interest rates rise soon after Mr X refinances, the floating rate could be up to 2% to 3%, but the fixed rate would remain at 1.5% for Mr A. While these may not seem very significant, a difference of S$5,000 in annual interest may be the result.
During the refinancing process, lenders make necessary enquiries regarding your current loan and try to present a lower interest rate to gain your patronage. This is a good development for homeowners who can refinance their current home loan and reduce their monthly instalments and total mortgage cost. Note that most banks require a balance of at least S$100,000 with a minimum period of 5 years. There are always exceptions, so make sure to check with our mortgage broker before ruling out refinancing!
With lower interest rates, you will enjoy lower monthly payments. If you choose not to refinance your existing mortgage loan, your interest rate will gradually increase causing higher monthly installments and total interest costs.
Once your application is live you will be able to review suitable loan options on your dashboard. One of our mortgage brokers will follow up with you to discuss the best available options and next steps.
After you’ve decided on a preferred mortgage option one of our mortgage brokers will help process your application.
Settle all fees (option fee, option exercise fee to the seller as well as the relevant buyer’s stamp duty fee in case you are purchasing a private property).
Attent your property purchase appointment date and sign all legal documents for the transfer of the property, paying all legal and valuation fees.
Suitable for Individuals seeking home loans with low total cost of borrowing
Unsuitable for Individuals seeking to refinance their home loans every few years
Individuals looking for smaller home loans below S$300,00