Home Loans

UOB Home Loan Review Singapore 2018 – Which Mortgage to Choose from UOB

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Peter Lin

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UOB home loan packages come in all shapes and sizes. It’s UOB’s way of ensuring that they have something for just about anything a potential customer would want. They may have the YOLO credit card, but when it comes to home loans, UOB is all about the FOMO.

If you’re buying a new property and looking for a UOB home loan, here are the best packages they offer, whether your property is uncompleted or completed.

 

UOB Home Loan for an HDB BTO, Building under Construction, with a purchase price of $350,000, loan tenure of 25 years

Home Loan Package Estimated Monthly Instalment Notes
Year 1: 14FDPR + 1.75%

Thereafter: 14FDPR + 1.75%
$1,187 No Lock-in

No penalty for partial or full prepayment

Cancellation fee applies for undisbursed loan

*updated as of 15 March 2018

For a building under construction, UOB currently offers four home loan packages. However, only one is eligible for HDB BTO flats. The other three are for uncompleted private properties.

UOB’s home loan package for uncompleted HDB BTO flats is a fixed deposit-linked rate, which means that the rate is pegged to the bank’s fixed deposit interest rate and is expected to remain relatively stable.

However, if we’re being honest, the UOB home loan package for HDB BTO flats is really not ideal. This is only because of the extremely high spread of 1.75%. The spread alone is already higher than the lowest home loan rate in the market today. Combined with the current 14-month fixed deposit interest rate of 0.25% and you’re looking at a home loan interest rate of 2% at least.

For uncompleted private properties: UOB is currently offering packages linked to 1-month SIBOR, 3-month SIBOR and 14FDMR. Of these three, we would actually recommend the 14FDMR over SIBOR, as SIBOR is much more volatile and expected to rise in the near future.

 

UOB Home Loan for a completed condominium unit, with a purchase price of $1,000,000, loan tenure of 30 years

Home Loan Package Estimated Monthly Instalment Notes
Year 1: 1.70%
Year 2: 1.85%
Thereafter: 14FDPR + 1.60%
$2,857 2-year lock-in

1.5% penalty for full prepayment during first 2 years

Choice of Fixed Deposit or SIBOR rates for the Thereafter Rates

Year 1:  1-mth SIBOR + 0.50%
Year 2:  1-mth SIBOR + 0.50%
Thereafter: 1-mth SIBOR + 0.65%
$2,858 1-year lock-in

1.5% penalty for full prepayment in first year

One-time partial payment penalty wavier of 30% of the original loan amount each year during lock-in period

Year 1:  14FDPR + 1.40%
Thereafter: 14FDPR + 1.40%
$2,878 2-year lock-in

1.5% penalty for full prepayment in first 2 years

One-time partial payment penalty wavier of 30% of the original loan amount each year during lock-in period

Year 1: 1.95%
Year 2: 1.95%
Year 3: 1.95%
Thereafter: 14FDPR + 1.70%
$2,937 3-year lock-in

1.5% penalty for full prepayment during first 2 years

Choice of Fixed Deposit or SIBOR rates for the Thereafter Rates

Year 1: 14FDPR + 1.75%
Thereafter: 14FDPR + 1.75%
$2,957 No lock-in

No penalty for partial or full prepayment

Year 1:  3-mth SIBOR + 0.70%
Year 2: 3-mth SIBOR + 0.80%
Thereafter: 3-mth SIBOR + 0.90%
$3,006 No lock-in

1.5% penalty for full prepayment in first year

One-time partial payment penalty wavier of 30% of the original loan amount each year during lock-in period

*updated as of 15 March 2018

UOB has 6 different home loan packages to offer. We won’t review all of them, simply because some just look like they’re there to make other options look better. Let’s divide them into 3 main categories – SIBOR-linked, fixed deposit-linked and fixed rate:

The SIBOR-linked packages give you a choice between a 1-month SIBOR-linked package and a 3-month SIBOR-linked package. But when you look closer, it’s not really much of a choice at all! Not only has 1-month SIBOR been lower than the 3-month SIBOR in over a decade, but the 1-month SIBOR package has the lower spread. Essentially this means that it’s highly likely you’ll be paying more if you take the 3-month SIBOR package. The only advantage of the 3-month SIBOR package is that there’s no lock-in period, but in this case, that’s really not worth paying more every month.

The 2 fixed deposit-linked home loan packages uses the 14-month fixed deposit interest rate, currently at 0.25%. This makes the first 14FDPR home loan package very enticing, even with a 2-year lock-in period. As we mentioned earlier, we definitely prefer 14FDPR as a much more stable option over SIBOR, even though you currently pay more per month for the fixed deposit-link home loan package.

The final options are both fixed rate, but you’ll notice that the package with the 2-year lock-in period is much more enticing than the home loan package with the 3-year lock-in period. Honestly, the only reason you would want a longer lock-in period is if you expect both SIBOR AND 14FDPR to rise meteorically within the next three years. Otherwise you’re just paying more for no good reason at all.

In terms of recommendation, we would therefore go with the 14FDPR home loan package (despite being the slightly more expensive option currently), followed by the 2-year fixed rate. Only go with the 1-month SIBOR home loan package if you are willing to gamble on the risk of a quickly rising SIBOR in the next year or so.

For completed HDB flats: All the UOB housing loan packages mentioned are available for resale HDB flat purchases as well. Yes, even the weird ones.

 

Should you go with a UOB home loan package?

Among all the banks, UOB offers the most variations, which means you’re spoilt for choice. That’s not necessarily a good thing though, with only the 14FDPR packages worth a look.

The good news is, the 14FDPR housing loan package is among the top 5 in terms of cost, and you can definitely expect UOB to lower their rates if they feel they’re missing out.

Are you interested in applying for a UOB home loan? Speak to one of our mortgage specialists to find out which bank is offering the best home loan in Singapore for your particular needs.

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

Best Home Loans Singapore (2018) – Most Affordable Housing Loans Reviewed

OCBC Home Loan Reviews Singapore 2018

DBS Home Loan Reviews Singapore 2018

BOC Home Loan Reviews Singapore 2018

Maybank Home Loan Review Singapore 2018

Citibank Home Loan Review Singapore 2018

Standard Chartered Home Loan Review Singapore 2018 *COMING SOON*

Keep updated with all the news!

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.