Standard Chartered offers perks like multiple choices of loan plans for clients to choose from. Clients can even use a bridging loan to help buy an HDB home. The loan rates offered are open and transparent.
But the bridging plan term is short for six months only. The “Green Loan” package offers few incentives to eco-conscious applicants. Last, the loan rates increase progressively.
- Enjoy exclusive online and mobile banking services reserved for premium clients only.
- No processing fee is necessary for the application.
- E-statements are available to clients for environmental purposes
- Four loan types plus a bridging plan choice available to HDB applicants
- Lower interest rates than the HDB loan in general
- Entitled to the protection by the deposit insurance scheme
Standard Chartered HDB Home Suite Loan Rates
Standard Chartered Bank offers five types of HDB Home loan packages. Clients can choose one based on their circumstances and preferences.
1. The MortgageOne SORA loan package:
Clients can use the interest income from an account with the bank to offset loan interest payments and relieve the homeowner’s interest burden. The loan interest can be a SORA or a thirty-six-month fixed deposit rate. Moreover, the account type for loan interest offset can be a savings account, a fixed deposit, a current, or a payroll transaction account with Standard Chartered.
2. The Two-year and Three-year fixed-rate loans:
A homeowner pays fixed rate interest for a two or three-year period. After the fixed payment period, he pays a board rate like a two or three-year fixed deposit rate plus a 1% margin spread for the remaining loan period.
3. The Compounded Three-month Singapore Overnight Rate Average(SORA) loan:
The plan calculates the interests over six months of compounded rates plus a spread. The SORA is transparent as the Monetary Authority of Singapore(MAS) publishes the rate regularly on their website. The spread increases progressively from 1.2% to 1.4% from year one to three and after that.
4. Bridging loan:
Standard Chartered bridging loan helps homeowners pay the first downpayment for properties if they are currently selling an existing home. The loan interest is the Three-month Singapore Interbank Borrowing Overnight Rate(SIBOR) plus a 2% bank spread. It aims to relieve the short-term cash flow problem. The bridging loan is about a maximum of six months.
George and Emily plan to buy an HDB flat and apply for a loan with Standard Chartered Bank. The flat is worth S$750,000. After review, the bank approves their application and grants S$562,500 = S$750,000 x 75% of the loan to the couple.
The George’s family now draw down S$150,000 = S$750,000 x 20% from their CPF accounts for a part of the downpayment for the purchase price. They also get ready for the remaining part as cash of S$37,500 = S$750,000 x 5% as legally required.
The total downpayment: S$150,000 + S$37,500 = S$187.500,
George and Emily have chosen a twenty-five-year fixed-rate loan plan as the mortgage plan.
Hence, the payments are as follows:
The fixed rate is 1.6%; The FDR is 0.72%(assume the rate remains constant throughout the whole period); the spread is 1%. The first month’s interest: S$750 = S$562,500 x 1.6%/12
The first year payment: S$251,000 = S$562,500/25 + S$562,500 x 1.6%(interest) + S$32,000(stamp duty, legal fees and bank valuation report & others) + S$187,500(downpayment);
The second year payment: S$31,140 = S$540,000/24 + S$540,000 x 1.6%
The third year and thereafter: S$31,401 = S$517500/23 + S$517,500 x 1.72%(0.72% + 1%)
The total payment for twenty five years: S$1,004,363 = S$251,000 + S$31,140 + S$31,401 x 23
Standard Chartered offers interest offset from the fixed deposit. If you have a fixed deposit with the bank, you can use the deposit interest to offset the mortgage interest and relieve your payment pressure. Besides, you can get a cash reward of up to S$1,000 by referring to a successful application.
- Sometimes a homeowner may face a temporary cash-flow problem upon paying a downpayment of a flat as a sale of an existing home is not yet completed. Standard Chartered offers a maximum of up to six-month bridge loans, so you can pay for a downpayment for your favorite home as planned.
- The member-get-member home loan referral program rewards clients for up to S$1,000 in cash for successfully referring a client for a loan with Standard Chartered.
- A loan borrower can use your deposits with the bank to offset mortgage interest from your property loan. It helps lessen the interest burden. Besides, the bank offers to let clients withdraw from their deposits anytime.
- Standard Chartered offers flexible loan products like fixed-rate loans and floating-rate loans, and interest-offset plans. They aim to suit clients from different financial circumstances.
- The sources the bank determines loan rates are open and transparent. It refers to the SIBOR(the Singapore Interbank Offer Rate) and SORA(the Singapore Overnight Rate Average) as the floating rate basis. Besides, the bank uses the published deposit rates plus a fixed margin spread as references in the interest-offset mortgage plans.
- The six-month bridging loan is short. Applicants requiring a more extended period may not be able to solve the cash flow problem. Apart from that, the bridging loan’s interest rate is a three-month SIBOR plus a 2% annual rate and is higher than a personal loan plan.
- Unlike other banks’ promotions, the “Green Mortgage” promotion package offers fewer to no incentives to applicants. It may find it difficult to lure environment-conscious clients into applying for the bank’s products and services unless it provides more incentives like rate cuts and cash rewards to green loan applicants.
- The loan interests charged by Standard Chartered are progressive. That means, in later years, borrowers have to pay a higher mortgage loan interest, especially from the fourth year and afterward when the bank spread has increased significantly. Applicants may have to consider the spread costs besides the floating interest payments beforehand.
How the Standard Chartered HDB Home Suite Loan compare to other Banks
Banks offer different HDB home loans with different combinations. The following are the major product comparisons related to their closely similar features for general reference.
Floating rate packages
|Banks||Lock-in periods||First-year interest rates||Sign-up promotions|
|Standard Chartered||Two years||Three-month SORA + 1.2%||N/A|
|UOB||Two years||Three-month SORA + 1.2%%||N/A|
|Maybank||One year||Three-month SORA + 0.9%||N/A|
|DBS||Two years||Three-month SORA + 0.8%||N/A|
|Citibank||2 Years||Three-month SORA + 0.97%||Shopping vouchers worth S$560 for a successful approved loan of S$800,000 or above|
|Banks||Lock-in periods||First-year interest rates||Sign-up promotions|
|Standard Chartered||Two years||1.86%||N/A|
|DBS||2 & 3 years||1.3% & 1.4%||One free conversion within 24 months from the first disbursement|
|Citibank||2 & 3 years||1.23% & 1.25%||Shopping vouchers worth S$560 for a successful approved loan of S$800,000 or above|
What We Think About Standard Chartered HDB Home Suite Loan
Referring to the floating rate products, Standard Chartered offers few outstanding and competitive features in the market. Its products provide a typical two-year lock-in period; however, the interest rate charged is on the upper scale. That means the bank charges higher interest rates than its peers. Also, the bank does not offer incentives to new clients.
Regarding the fixed-rate loan, the bank does not offer unique features in the product. The average lock-in period is still two years. The bank’s package is the most expensive in the market. It does not use incentives like shopping vouchers or cash to promote its products.
However, the bank has a wide range of products except for fixed-rate and floating-rate loans. It offers bridging loans, interest-offset plans. The bank also provides referral programs for existing clients for successful applications. Though Standard Chartered has the green loan package available in the market, it provides few incentives to appeal to eco-conscious applicants.
To sum up, Standard Chartered has more products to people preferring more product choices.
How to apply for Standard Chartered HDB Home Suite Loan
Applicants should be 21 to 65 and have a minimum annual income of S$30,000 or above. In addition, the minimum loan required is s$100,000. The following steps are our guide:
Step 1: Get all information ready upon application. They are
- filling up the loan application online or using a hard copy downloaded from the bank’s official website
- the NRIC or Singpass information
- the income proof(CPF statements, tax assessments, payroll slips)
- the credit facility information
- the HDB property information, f. the option to purchase
Step 2: If the bank approves your application, the borrower must sign a letter of offer, an OTP, and related documents. Besides, a resale application(if it is a unit for resale) from the seller is also necessary.
Step 3: An HDB home buyer should pay necessary fees, for example, option fees, option exercise fees, to the seller.
Step 4: Schedule the time for signing the purchase agreement.
Step 5: Schedule the time to sign contracts of an HDB unit transfer and payment of legal or related fees like stamp duties, valuation fees.
We Are Answering Some Of Your Most Asked Questions.
1. What is SORA(Singapore Overnight Rate Average)? How does it affect my mortgage?
A SORA is a rate Singapore banks borrow money overnight. The MAS(the Monetary Authority of Singapore publishes it regularly in three formats: One-month, Three-month, and Six-month SORAs.
The SORA aims to replace the SORs and SIBORs in determining the interest rates for Singapore banks’ loan packages. That said, existing clients using the old packages shall switch to new rates in the future. Standard Chartered says the conversion is free.
Like other banks, Standard Chartered modifies the usual three-month SORA by compounding and averaging the rate over its three-month history(if it is three-month SORA).
The process reduces fluctuations and volatility. The bank adds a spread to the rate, and it becomes the loan interest rate of the package.
The bank determines the rate on the first business day of a loan disbursement month and reprices it every three months. Clients will get notified beforehand.
2. What is the LTV(Loan-to-Value)? How does it affect my loan application?
An LTV is the maximum amount a home buyer can borrow for a home loan. The regulatory authority sets the LTV limit to 75% maximum. A bank determines the value based on the lower of a property’s market price or the adjusted property’s purchase price.
If a borrower has no other outstanding property loans with the bank, he may likely get the maximum loan ratio(if he requires it).
3. Can I use the funds from my CPF for a partial prepayment for an HDB home?
Yes. You can use the funds available in the CPF to pay for a maximum of 20% of a home value as a downpayment. The remaining 5% should be in cash.
Our Final Thoughts
The Chartered Standard HDB Home Suite Loan suits homebuyers preferring multiple choices of loan products.
Here are our takeaways:
- Standard Chartered offers side benefits like credit or special client privileges to successful applicants.
- The bank offers a range of varied packages with different features to suit applicants.
- A bridging loan is available to assist clients with a short-term cash-flow issue. Read more about the best bridging loan in Singapore.
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