DBS Home Loan Review: Fixed vs Floating, SORA, BUC Packages and More

·8-min read
DBS Home Loan Review: Fixed vs Floating, SORA, BUC Packages and More     
DBS Home Loan Review: Fixed vs Floating, SORA, BUC Packages and More

Founded in 1968 by the Government of Singapore to initially finance the industrial activities of the Economic Development Board, today, DBS is one of the largest banks in Southeast Asia.

As the largest bank in Singapore, DBS has one of the highest deposit accounts and a strong presence in the local home loan market. In this guide, we take a look at the home loan packages offered by DBS for both HDB flat and private property owners.

On 16 June 2022, the US Fed made the largest rate hike since 1994, raising interest rates by 75 basis points. Another “75-basis point hike, or a 50-basis point move” will probably occur at the following meeting of policymakers. What can you do to combat rising interest rates? One thing you can do is shop around for loan packages and refinance an existing home loan.

For those thinking of taking up a loan with DBS or are already an existing customer, do note that the Fixed Deposit Home Rates (FHR) increased on 8 June 2022. Subsequently, the revised FHR applies from 8 July 2022. Find out more in our article.

Disclaimer: The packages mentioned in this article are correct at the time of writing [14 June 2022] and are meant as a guide only. The interest rates are subject to change, and you should compare the latest home loan rates and packages on PropertyGuru Finance before applying for a new home loan.

DBS Home Loan Summary

DBS home loan summary

Type of home loan

BUC Home Loans

Floating Rate Home Loans

DBS 2-Year (FHR and 3M SORA) and No Lock Floating Rate

Fixed Rate Home Loans

DBS 2-, 3- and 5-Year Fixed Rate

Here’s an in-depth look at the different available under all three categories: fixed rate loans, floating rate loans and BUC loans.

DBS Fixed Rate Home Loans

Under its fixed rate packages, it offers a:

  • 1) DBS 2-Year Fixed Rate Package

  • 2) DBS 3-Year Fixed Rate Package, and

  • 3) DBS 5-Year Fixed Rate Package.

Current fixed rates for DBS (as of 14 June 2022):

Year

DBS 2-Year Fixed Rate

DBS 3-Year Fixed Rate

DBS 5-Year Fixed Rate

Year 1

2.45%

2.6%

2.05%

Year 2

2.45%

2.6%

2.05%

Year 3

3M SORA + 1.5%

2.6%

2.05%

Year 4

3M SORA + 1.5%

3M SORA + 1.5%

2.05%

Year 5

3M SORA + 1.5%

3M SORA + 1.5%

2.05%

Thereafter

3M SORA + 1.5%

3M SORA + 1.5%

FHR6 + 1.6%

The 2-, 3- and 5-years fixed rate packages have an interest rate of 2.45%, 2.6% and 2.05% per annum and a lock-in period for the specified number of years, respectively. Thereafter, you’ll notice that the DBS fixed rate home loan for the 5-year package is pegged to the Fixed Deposit Home Rate 6 (FHR6), which is the prevailing six-month Singapore Dollar fixed deposit rate of DBS for amounts of $1,000 to $9,999 (or any other sums stated in the letter of offer).

Meanwhile, the 2-year and 3-year packages are pegged to the 3M SORA after the lock-inperiod, which is the Singapore Overnight Rate Average, defined by the Monetary Authority of Singapore as the “volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8am and 6.15pm”.

Previously, the rates were pegged to SIBOR Now that SIBOR is gradually being phased out, SORA is a popular reference rate for floating rate home loans. You can read more about it in this article: SIBOR vs SOR vs SORA: What Do These Rates Mean for Your Home Loans? For the latest DBS fixed deposit rates, click here instead.

All the packages come with a free conversion (for the 2-year and 3-year packages, after 24 months; for the 5-year package, after 60 months), giving the borrower the option to reprice the loan package. If you commit to the 5-year package, you also get to enjoy perks like the waiver of the commitment fee due to the sale of the property.

DBS Increasing DBS Singapore Dollar Fixed Deposit (S$FD) Board Interest Rates from 8 June 2022

DBS is increasing its board interest rates from 8 June 2022; the FHR is increasing accordingly. Existing customers who have a home loan pegged to FHR will be affected and receive a letter informing you of the revised amount you will be paying. Due to the revised rates, you will observe your monthly instalments increasing from September 2022.

Consequently, the revised FHR applies from 8 July 2022:

FHR

Current FHR (Before 8 July 2022)

Revised FHR (From 8 July 2022 onwards)

FHR6

0.200%

0.750%

FHR8

0.600%

0.850%

FHR24

0.900%

1.300%

FHR

1.025%

1.225%

Learn more about the latest revision of the DBS FHR here.

If You Have an Existing DBS Loan, What Can You Do to Mitigate the Upcoming FHR6 Increase?

If you have an existing DBS home loan, you may be wondering what you can do to mitigate the coming FHR6 increase. According to Paul Wee, Managing Director of FinTech, PropertyGuru Group, here are some tips:

  • Reach out to the bank to see repricing options

  • Explore refinancing options with other financial institutions

  • Explore increasing loan period/tenure to reduce monthly instalment amount to improve cash flow

  • Explore taking out an equity loan to obtain additional funds to cover exigencies

  • Increase CPF amount used to service loans

PGF interest rate hike smartrefi refinancing banner
PGF interest rate hike smartrefi refinancing banner

Want to save more on your existing mortgage? Compare the best home loan rates in town or check out PropertyGuru Finance for more personalised advice and recommendations:




DBS Floating Rate Home Loans

For completed properties, let’s start with the DBS floating rate home loans available. There’s just one floating rate package currently, tied to the FHR6, which we mentioned above.

Current floating rates for DBS (as of 14 June 2022):

Year

DBS 2-Year Floating Rate FHR6 + 1.3%

DBS 2-Year Floating Rate 3M SORA + 0.8%

DBS No Lock Floating Rate

Year 1

FHR6 + 1.3%

3M SORA + 0.8%

FHR6 + 1.75%

Year 2

FHR6 + 1.3%

3M SORA + 0.8%

FHR6 + 1.75%

Year 3

FHR6 + 1.3%

3M SORA + 1.0%

FHR6 + 1.75%

Thereafter

FHR6 + 1.3%

3M SORA + 1.0%

FHR6 + 1.75% 

The DBS Floating Rate packages come with the option of a 2-year or no lock-in period. There are two 2-year floating rate packages you can choose from: the first with an FHR6 + 1.3% interest rate, and the second with a 3M SORA + 0.8% interest rate.

Both have a commitment period of two years, but the former has a minimum loan amount of $300,000, while the latter has a minimum loan amount of $100,000 and perks like the waiver of commitment fee if you choose to sell your property.

For the floating loan with no lock-in period, the minimum loan amount is $100,000. Right now, the interest rate is FHR6 + 1.75% from year one to five, and remains the same from year six and thereafter.

DBS BUC Home Loans (For Residential Properties under Construction)

Previously, DBS offered two types of home loan packages for private properties under construction. Back then, the DBS BUC loan came with an FHR6 + 0.95% interest rate, with no lock-in period.

However, DBS currently does not currently offer BUC loans. Looking for a BUC loan? Compare the best BUC loans on PropertyGuru.

DBS Home Loan Review: Should You Consider It?

There are many home loan packages out there, but what makes DBS home loan packages worth your consideration? Here are a few reasons why you could consider taking a DBS home loan package.

More Competitive than HDB Interest Rates

First, when compared to HDB concessionary rates of 2.6%, DBS’ rates are still more competitive. So, if you’re an HDB flat buyer or owner, it’s definitely worth considering. This translates to sizeable savings in the monthly instalments over the home loan period of two to five years.

Flexible Terms and Conditions

Second, all the fixed rate packages mentioned earlier come with a free conversion after their respective commitment periods. This gives the borrower the flexibility to switch to another lower interest loan package.

Third, on the 5-year fixed rate package, there is a “Waiver Due to Sales”. This means you do not incur additional fees when you sell your property (and hence, prematurely cut short your loan).

Extra Savings with DBS Multiplier Account

The final reason to take up a DBS home loan is to take advantage of the Multiplier Account – a savings account that many Singaporeans have. Taking up a home loan package from DBS fulfils one of the categories for the Multiplier Account, which allows a DBS depositor to earn a higher interest rate on their savings.

From time to time, there may also be promotional rates offered by DBS and other banks. This can make a seemingly less superior package become more suitable and cheaper for you. To help you find the best home loan packages, you can use the PropertyGuru Finance home loan calculator or speak to one of our Mortgage Experts.

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PropertyGuru Finance home loan bottom banner

Disclaimer: Information provided on this website is general in nature and does not constitute financial advice.

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