DBS Home Loan Review: Calculator, Interest Rates, Repricing, Refinance

DBS Home Loan Review: Calculator, Interest Rates, Repricing, Refinance

Note: DBS and UOB removed their fixed home loan rates from their website as at 23 September 2022, Friday. OCBC’s fixed home loan rates are no long available on their website as at 24 September 2022, Saturday.

DBS home loan (or POSB home loan) packages are some of the most popular mortgage options in Singapore today — probably second only to the ever-popular “standard” HDB loan.

DBS home loans are some of the cheapest on the market as well. However, with inflation peaking and the US Federal Reserve hiking interest rates, it was only a matter of time the banks followed suit and increased their home loan interest rates. As of yesterday, DBS has raised the rates of its home loan packages.  

If you’re buying a new property and looking for a DBS home loan, here’s what the new changes to the home loan interest rates entail whether your property is HDB or private, uncompleted or completed.

Contents

      1. Overview of DBS Home Loan
      2. DBS Home Loan Calculator
      3. DBS Home Loan Rates: Fixed Rate Packages 
      4. DBS Home Loans: Floating Rate Packages (SORA or FHR6) 
      5. DBS Home Loans: BUC (ceased)
      6. DBS Repricing Home Loan
      7. DBS Refinance Home Loan
      8. DBS Home Loan Early Repayment Penalty
      9. DBS Home Loan Promotions
      10. Home Loan Rates: DBS vs OCBC vs UOB
      11. Conclusion: Should I Get DBS Home Loan?

1. DBS Home Loan: Summary

If you are new to home loans, the most important thing to know is that different home loan packages apply to different property types.

Property type DBS home loan packages
HDB BTO (under construction) Floating with no lock-in (ceased)
Private property (under construction) Floating with no lock-in (ceased) 
HDB flat (resale/built BTO) 5-year fixed rate, 2-year fixed rate, floating with no lock-in period, floating with 1-year lock-in
Private property (built) 2-year fixed rate, floating with no lock-in, floating with 1-year lock-in

Read on: Beginner’s guide to all things home loans in Singapore

Also, if you’ve been following the news in June 2022, there was much talk about DBS removing its 5-year fixed rate home loans for good, alongside DBS home loan interest rates increasing to 2.75%. What’s going on, and what are the new DBS home loan interest rates? Before we dive in, let’s understand how DBS home loans work.

The full range of DBS home loans can be split into 2 broad types:

  • Fixed interest rate home loans (interest rates don’t change)
  • Floating interest rate home loans (interest rates tend to change yearly)

2. DBS Home Loan Calculator

For those of you who are new homeowners navigating the world of home loans, you’ll definitely need two types of home loan calculators – the official CPF First Home Loan calculator and the DBS home loan calculator if you’re considering a bank home loan. By simply plonking in how much loan you’ll need and the number of loan years, DBS’ home loan calculator gives you a very detailed table of your repayment schedule including compounded interests paid over the entire loan tenure.

For instance, if you’re exiling yourself to the trenches of Yishun… for a hefty $400,000 resale BTO 4-room flat, after the required upfront 25% bank home loan downpayment of $120,000, you’ll be taking the remaining $280,000 from a home loan of choice.

Downpayment: $20,000 (5%) in cash + $100,000 (20%) in CPF
Home Loan Amount: $280,000

Assuming you’re giving yourself 25 years to pay off your loan, with DBS’s fixed rate home loan package, you will pay 2.75% p.a. which translates to $1,292 in home loan repayments monthly.

Your DBS home loan calculator repayment will look something like that:

Year Interest Rate Beginning Loan Amount Monthly Instalment
2022 2.75% $280,000 $1,292
2023 2.75% $276,078 $1,292
2024 2.75% $268,069 $1,292
2025 2.75% $259,838 $1,292
2026 2.75% $251,377 $1,292
2.75% $1,292
2047 2.75% $7,684 $1,288

In a nutshell, the DBS home loan calculator will basically show you a few things:

  • Which year your home loan will end (year 2047 in the above example)
  • Interest rate throughout all 25 years (fixed rate = won’t change)
  • Beginning loan amount (also called principal)
  • Monthly instalment (the amount you need to pay DBS every month)
  • Interest paid (you’ll be surprised how much interest you’re paying!)
  • Loan amount paid so far
  • Ending loan amount (ends with $0 in year 2047, for example)

It’s a lot of information to take in for new homeowners, but detailed home loan repayment tables help you to chart your cashflow for the next 25 years or so – especially if you have a newborn coming soon and you’ll need to plan for his or her NUS, NTU, or SMU university tuition fees.

Alternatively, you can also use the popular MoneySmart Mortgage calculator to give you a comparison of home loan packages across different banks.

Let’s move on to the actual DBS home loan and mortgage packages available.

3. DBS Home Loan Rates: Fixed Rate (Unavailable)

Note: DBS has temporarily removed its fixed home loan offerings as of 23 September 2022, Friday, in response to the Fed interest rate hike.

Fixed rate home loans promise to charge you a standard rate for a specified number of years – regardless of what happens to DBS’s fixed deposit rates, or the economy, or whatever. So, they are less likely to fluctuate, impact your household cashflow, and give you a heart attack.

However, you pay a little more for the stability and security that you enjoy from a fixed rate home loan.

As of 30 June 2022, DBS scraped its super attractive 5-year 2.05% p.a. fixed rate package for HDB home loans. DBS also increased its 2-year and 3-year fixed rate home loan interest rates to 2.75% p.a.

DBS home loans fixed interest rates:

DBS Home Loan: 2-year fixed rate
Year 1 – Year 2 2.75% p.a.
Year 3 and thereafter 3M SORA + 1.50% p.a.

 

DBS Home Loan: 3-year fixed rate
Year 1 – Year 3 2.75% p.a.
Year 4 – thereafter 3M SORA + 1.50% p.a.

If you’re considering a DBS home loan just because you want to maximise your DBS Multiplier savings account‘s bonus interest rates…. don’t. At 2.75%, DBS 2-year or 3-year fixed rate home loans’ are more expensive than HDB loan‘s 2.6% fixed interest rate. 0.15% might not seem like a lot at face value but if you’re borrowing $400,000, you’ll actually be paying $60,000 extra.

Then, take note you’ll likely need to reprice your home loan with DBS or refinance it with another bank. That’s because from the 3rd year onwards, you’ll be paying 3M SORA + 1.50%. Given that the 3M SORA has been on an incline from January 2022, you’ll want to be wary lest it increases any further.

As at 28 June 2022, the 3M SORA is 0.728% p.a. As at 24 September 2022, 3M SORA is 1.5967% p.a.

4. DBS Home Loans: Floating Interest Rate (SORA, FHR6) 

On the other hand, you can expect floating home loans’ interest rates to change yearly. The onus is on you to keep up with the economy, home loan news, and communicate with your bank to find out if your floating home loan rates might increase or decrease.

Typically, floating interest rates tends to be lower than fixed interest rates since they fluctuate, and do not offer stability or security in your cashflow planning. DBS’ floating rate home loans are pegged to either 3M SORA or their in-house FHR6.

DBS home loans with 3M SORA floating interest rates:

DBS Home Loan: 2-year lock-in 3M SORA + 1% p.a.
Year 1 – Year 2 3M SORA + 1% p.a.
Year 3 – thereafter 3M SORA + 1% p.a.
Commitment period 2 years

The 2-year lock-in home loan rate is based on 3M SORA + 1%, which is currently 2.5967% p.a.. As long as the 3M SORA remains lower than 1.5%, you would be saving money on your interest rate payments relative to getting a HDB loan.

However, from the 3rd year onwards, you’ll be at the mercy of 3M SORA rates. Looking at the uphill trajectory it’s heading, I wouldn’t bet on it staying lower than the HDB loan interest rate of 2.6% much longer.

What about the DBS FHR6?

FHR6 is short for Fixed Deposits Home Rate 6 months, and it is basically a type of home loan interest rate that is determined by the 6-month average of DBS Fixed Deposit accounts‘ interest rate, and DBS bank’s own internal board interest rates. Likewise, you’ll find other FHR variants in the likes of FHR8 which stands for Fixed Deposits Home Rate 8 months, FHR24 for Fixed Deposit Home Rate 24 months etc.

What is the DBS FHR6 now? Let’s find out:

DBS FHR6, FHR8, FHR24:

DBS FHR Current Rates
FHR 1.65%
FHR6 1.4%
FHR8 1.45%
FHR24 1.7%

From 8 July 2022, all DBS FHR home loan interest rates dramatically increased. That means, all customers who are currently on a DBS home loan with floating interest rates pegged to the FHR6, FHR8, and FHR24 will be affected adversely. If you took advantage of the low floating interest rates over the Covid-19 years, you’ll be affected by the spike now.

DBS home loans with FHR6 floating interest rates:

DBS Home Loan: 2-year lock-in FHR6 + 1.3% p.a.
Year 1 – Year 2 FHR6 + 1.3% p.a. 
Year 3 – thereafter FHR6 + 1.3% p.a. 
Commitment period 2 years

On the other hand, if you opt for the 2-year lock-in FHR6, you’ll be committed to changing FHR6 rates. As of writing, DBS 2-year FHR6 home loan lock-in will incur an interest rate of 1.4% + 1.3% = 2.7%.

If the FHR6 sees a hike, you should be financially capable to foot a higher interest rate.

DBS Home Loan: No lock-in FHR6 + 1.75% p.a.
Year 1 – Year 5 FHR6 + 1.75% p.a. 
Year 6 – thereafter FHR6 + 1.75% p.a. 

Super FOMO and afraid that something better will come along? You might want to go for the no lock-in DBS home loan FHR6 package. However, the trade-off is a higher interest rate of FHR6 + 1.75%, i.e. currently 3.15%.

Although you pay more, you have a bit more freedom to jump ship as soon as possible, although again, note that fees may still apply even if you have no lock-in.

5. DBS Home Loan: BUC (ceased)

In the past, DBS home loan packages were also distinguished by the property’s development stage.

DBS used to explicitly offer BUC loans to buildings that are under construction (BUC) and completed properties. However, there are currently no BUC specific loans available on the DBS home loans website.

6. DBS Repricing Home Loan

Repricing your home loan refers to switching to a new home loan package within the same bank. DBS’s repricing packages are structured in a similar way to the home loan packages mentioned above. This means that if you’re looking to reprice your DBS home loan, you have the following options that can be broken down into fixed rate and floating rate packages:

DBS Home Loan Repricing Fixed Rates:

DBS Repricing Home Loan: 2-year fixed rate
Year 1 – Year 2 2.75% p.a.
Year 3 – thereafter 3M SORA + 1.50% p.a.
Commitment period 2 years

 

DBS Repricing Home Loan: 3-year fixed rate
Year 1 – Year 3 2.75% p.a.
Year 4 – thereafter 3M SORA + 1.50% p.a.
Commitment period 3 years

DBS’s repricing home loan packages are as attractive as their new loan packages which is one strong reason for existing customers to continue business with DBS if you already have a home loan package with them.

In fact, the 2-year and 3-year fixed rate repricing home loan package shares the same interest rate as DBS’s fixed rate home loan packages.

DBS Home Loan Repricing Floating Rates:

DBS Repricing Home Loan: 2-year lock-in 3M SORA + 1% p.a.
Year 1 – Year 2 3M SORA + 1% p.a.
Year 3 – thereafter 3M SORA + 1% p.a.
Commitment period 2 years

 

DBS Repricing Home Loan: 2-year lock-in FHR6 + 1.3% p.a.
Year 1 – Year 2 FHR6 + 1.3% p.a. 
Year 3 – thereafter FHR6 + 1.3% p.a. 
Commitment period 2 years

If you’re thinking of repricing to a new DBS home loan package, you certainly won’t be shortchanged with DBS’s repricing home loans. You won’t have to pay any more than if you were to take a home loan package with DBS for the first time. However, do note you will have to pay the following fees:

DBS Repricing Home Loan Fees
With lock-in 1.50% of outstanding loan amount

0.75% of undisbursed loan amount

Processing fee: $800

Without lock-in 0.75% of undisbursed loan amount

Processing fee: $800

Repricing your home loan is also far less tedious than refinancing your home loan as you won’t have to foot any lawyer bills. Also, here’s a pro-tip, you ideally should refinance your home loan at least 3 months before the lock-in period of your loan ends.

Now, let’s take a deep dive into DBS Refinance Home Loans packages.

7. DBS Refinance Home Loan

If you’re looking to refinance your home loan, this means that you’re looking to hop from one bank to another to leverage on lower interest rates. In order to do so you’ll have to first engage a lawyer. You probably already know this but lawyers don’t come cheap. Hiring a lawyer to refinance your home loan can cost you anywhere from $1,800 to $3,000 upwards.

To save on refinancing home loan fees, request for a lawyer from the bank you’re hopping over to. It’s one way to cut back on all the moolah you’ll have to cough up in legal fees. You’re welcome, you can thank me later!

Not forgetting, when refinancing your home loan you will also incur the following fees:

DBS Refinance Home Loan Fees
With lock-in 1.50% of outstanding loan amount

0.75% of undisbursed loan amount

Without lock-in 0.75% of undisbursed loan amount

DBS used to offer refinance home loans for HDBs, Executive Condominiums (ECs), and private properties. Note that all fixed home loan plans have been temporarily paused as at 23 September 2022.

DBS Refinance Home Loan Cash Rewards
HDB 2.75% fixed,
3M SORA + 1%,
FHR6 + 1.3%
$2,000 cash (loan above  $250,000), DBS Multiplier account bonus interest
Executive Condominium (EC) 2.75% fixed,
3M SORA + 1%,
FHR6 + 1.3%
$2,000 to $2,800 cash (loan above $500,000), DBS Multiplier account bonus interest
Private Properties 2.75% fixed,
3M SORA + 1%,
FHR6 + 1.3%
$2,000 to $2,800 cash (loan above $500,000), DBS Multiplier account bonus interest

8. DBS Home Loan Early Repayment Penalty

There are no free lunches in the world. Banks don’t give out loans out of the kindness of their hearts. They do so because they have interest rates to earn from.

If you repay your DBS home loan (with a lock-in period) early, you’ll be charged an additional 1.5% early repayment penalty on the amount repaid early.

It might be worth paying the additional 1.5% if it is lower than the interest you’d accumulate if you were to continue repaying your loan till the end of its lock-in period. You’ll have to do the math!

9. DBS Home Loan Promotions

Everyone gets rewarded for doing things online these days. When you take up a DBS Home Loan package online, you can earn up to $2,800 in cash rebate. To qualify, though, you have to take out a loan of at least $250,000.

DBS Home Loan Promotion Cash Rewards DBS Multiplier Savings Account
New HDB home loan Bonus interest
New Executive Condominium (EC) loan Bonus interest
New Private Properties loan Bonus interest
Refinance HDB loan $2,000 cash (loan above  $250,000) Bonus interest
Refinance EC loan $2,000 to $2,800 cash (loan above $500,000) Bonus interest
Refinance Private Properties loan $2,000 to $2,800 cash (loan above $500,000) Bonus interest
DBS Renovation Loan Free Ninja Foodi Multi Cooker (worth $449), ends 30 Sep 2022

10. Home Loan Rates: DBS vs OCBC vs UOB

It isn’t just DBS that has been hiking their home loans. Other popular banks such as OCBC and UOB have also increased their home loan rates.

Let’s take a look across the board and compare fixed and floating home loan rates across the 3 banks.

Note: DBS and UOB removed their fixed home loan rates from their website as at 23 September 2022, Friday. OCBC’s fixed home loan rates are no long available on their website as at 24 September 2022, Saturday.

Fixed Rate Floating Rate (SORA)
DBS Home Loan Unavailable 2-year lock-in 

3M SORA + 1% p.a.

OCBC Home Loan Unavailable Year 1 – Year 2

1M SORA + 0.98% p.a.

UOB Home Loan Unavailable Year 1 – Year 2 

3M SORA + 0.70% p.a.

The fixed interest rate packages are pretty straightforward. DBS’ 2.75% p.a. used to be the lowest amongst the three banks. Another key difference between the 3 banks is the minimum borrowing amount (for HDB home loan):

Minimum home loan amount
DBS Home Loan  $100,000
OCBC Home Loan $200,000
UOB Home Loan $200,000

DBS home loan has the lowest minimum loan quantum at $100,000 amongst the 3 banks for HDB loans. If you don’t hit the $200,000 minimum home loan quantum of OCBC and UOB, you’ll be left with DBS as your only option. Hey, that’s a good problem to have.

Moving on to floating rates, one key difference that might jump at you is the fact that OCBC’s floating rate is benchmarked against 1M SORA.

1M SORA is calculated based on a compounding period of 1 month. Then begs the question, what’s the difference between 1M SORA and the popular 3M SORA?

Give the increasing interest-rate climate, a 3M SORA home loan interest rate would be more stable and prevent interest rates from rising too quickly due to the longer refresh period of 3 months. The monthly refresh period of 1M SORA might be heart-attack inducing as the number jumps very frequently.

UOB home loan‘s floating rate for the first 2 years is the cheapest. From year 3 onwards, you’ll incur 3M SORA + 1% in interest which will be on par with DBS home loan’s floating rate.

11. Conclusion: Should I get DBS Home Loan?

Given that the projected volatile economic climate, banks just hiked their home loan interest rates across the board. You might want to be cautious when getting a home loan package from a bank.

However, if time is not on your side, a DBS home loan makes sense if your loan quantum is low (minimum $100,000 for HDBs). Otherwise, DBS home loan’s fixed and floating SORA interest rates are all higher than UOB and OCBC’s. 

There are also additional promotions and benefits you can make use of with your DBS home loan, such as the DBS Multiplier Account or the POSB Cashback Bonus. With either of these schemes, you can either raise your savings account interest rate, or earn cashback simply by crediting your salary into your DBS or POSB account and taking up a DBS home loan.

Looking for home loans? Here are the other home loan packages we’ve reviewed.

Best Home Loans Singapore – Most Affordable Housing Loans Reviewed

OCBC Home Loan Review Singapore

UOB Home Loan Review Singapore

Bank of China (BOC) Home Loan Review Singapore

Maybank Home Loan Review Singapore

Citibank Home Loan Review Singapore

Standard Chartered Home Loan Review Singapore