Fixed Deposit Linked Home Loan Packages in Singapore

Do you want to know whether fixed deposit home loan rates are the lowest housing loan in Singapore?

We provide full information about fixed deposit-pegged home loan rates.

Read on.

Fixed deposit linked home loans packages are getting popular among homeowners these days. The most common questions posted by our customers are :

“Are fixed deposit linked home loan really fixed rate?”

“What are the historical trend for fixed deposit linked packages?”

“Do I need to place a fixed deposit with the banks to enjoy the home loan rates?”

Are you one of them?

Firstly, are fixed deposit linked home loans fixed? The answer is NO.

Fixed deposit linked home loans packages’ rates are pegged to the interest rate of the fixed deposits that the banks are offering to their customers.

Fixed deposit linked packages were first introduced by DBS in 2014. Since then, the fixed deposit home rate (FHR) has become a widely accepted alternative to SIBOR/SOR linked packages when homeowners take up a new loan or when they are looking at refinancing home loan. Other banks like UOB, OCBC, Maybank, Standard Chartered and HSBC began to offer fixed deposit linked packages.

However, from 2017, OCBC has moved away from fixed deposit linked packages.

Next, what are the historical trend of fixed deposit linked packages? To simplify your understanding, we will discuss the fixed deposit linked packages offered by DBS and its trend.

DBS introduced the first FHR package and the interest rate is the average of 12 and 24 months fixed deposit rates at 0.25% and 0.55% respectively.

The FHR interest rate is 0.4% [ (0.25% + 0.55%) / 2 ].

Subsequently, DBS launched FHR 18, FHR 9 and now, FHR 8. It means that the packages are pegged to the bank’s 18 months, 9 months and 8 months fixed deposit interest rate which are offered to their customers.

Now , let us look at the trend of the different FHR packages.

The pioneer DBS FHR package has increased from 0.4% to 0.8% since June 2018.

DBS has also raised their FHR 18 from 0.6% to 0.8% on 1st Feb 2018. For DBS FHR 9, it is revised from 0.25% to 0.5%, starting from June 2018. Those customers with DBS FHR, FHR 18 and FHR 9 home loan packages may consider refinancing home loan.

FHR, FHR 18 and FHR 9 are no longer available. Currently, DBS only offers FHR 8, which is pegged to their 8 months fixed deposit rate. You may refer to our latest housing loan interest rates.

Finally, do you have to invest in a fixed deposit when signing up for a fixed deposit linked home loan package? The answer is NO

It is not necessary to do so unless you want. The banks will be more than happy to do a placement for you.

Our mortgage brokers are equipped with the knowledge and may assist in your questions on SIBOR/SOB rates and fixed deposit-linked home loan rates.

You may check out our home loan interest rates to know the latest packages offered by the various banks in Singapore.