Home Loan Review: OCBC Vs Other Banking Giants

Home Loan Review: OCBC Vs Other Banking Giants

Key Features

Pros

  • Borrowers looking for competitive interest rates
  • Borrowers looking to learn more information on OCBC Home Loans
  • Individuals who are looking to refinance their mortgage loan of at least S$300,000

Cons

  • Individuals who are looking to refinance their mortgage loan of less than S$300,000

Editor’s Rating: 3.8 / 5.0

For many, having your own home is the end all, be all of success and comfort. It is not only a statement, but having your own residence is a practical investment for your future. But as is known by many who have and are currently house-shopping, there are understandable strains when it comes to mortgage loans. You may find yourself torn between decisions that are difficult and often permanent; first of which being choosing between a HDB housing loan or a bank mortgage. 

Choosing to go the bank mortgage route has its positives, chief of which is the usually smaller interest rates and the comparatively fewer requirements: which is usually just having a good credit score. Now when it comes to home lending, OCBC is more than worth your attention.

OCBC, or Oversea-Chinese Banking Corporation, is the oldest bank in Singapore remaining today. It was established from the merger of three local banks in 1932, one of which was founded in 1912, and is one of the largest financial services groups in the whole of Southeast Asia. More than that, it is widely known for its financial strength and stability, and is consistently in the ranking among the Top 50 Safest Banks in the World by Global Finance.

Included in this already impressive portfolio is its strong track record and competitive interest rates, and offers ideal fixed rates for home loans in the country. As of 2017, the number of housing loans lent by OCBC is at S$133 billion in Singapore, and S$86 billion around the world.

 

The Features and Benefits

OCBC provides some of the most ideal options for housing loans in Singapore. The loans they provide have qualities tailored to any aspiring homeowner, allowing an aspiring homeowner to get their dream home sooner with more personalized, and holistic solutions.

  • Your ideal residence might be costly, as dream homes can be. Luckily OCBC can offer a loan principal of up to 75% of your desired property’s value, allowing you to procure enough money for a sooner purchase. 
  • OCBC also has a wide range of loan packages, allowing you take advantage of different fixed and variable pricing packages appropriate to your financing needs.
  • OCBC offers the expert assistance of dedicated mortgage specialists and support that help you complete the mortgage application process.
  • Once you’ve chosen your desired package, your application can easily be approved within 60 minutes of submission.
  • You can get a loan with a fixed installment for the first 2 to 3 years, protecting from any rate fluctuations.
  • OCBC Home Loans provide legal fee subsidies of up to $1,800 for HBD housing loans of at least S$300,000, and S$2,000 for private housing loans of at least S$500,000.

 

Interest Rates and Fees

OCBC provides a complete selection of loan packages, allowing prospective homeowners to select loans tailored to their financial situation. From the tail end of 2017 to 2018, the bank has boasted some of the lowest introductory fixed interest for HDB flats, with floating rates that are only relatively less competitive.

While OCBC provides an attractive range of packages, one notable is its Fixed  Rate Home Loan. As of October 16, 2020,  you can get a fixed rate of 1.45% interest for the first 2 to 3 years for the OCBC 2Y or 3Y Fixed Rate Home Loan. This allows borrowers to be safe from any unexpected rate fluctuations that may affect their interest rates. 

For the next two years thereafter, the interest rate increases to 1.60, which includes the mortgage board rate plus 0.80%. 

Other offers include the Mortgage Board Rate, which provides interest at a bank-managed rate. Each of their price packages has specific rates, and the current mortgage board rates are availed at 0.80% interest. 

Mortgage board rates are open to revision at any point in time, in the case of which you will be given a 30-day notice. While this may sound like a bad thing, OCBC allows you to switch to another price packaging for free

OCBC charges for some standard fees which include full redemption penalty, partial repayment, and cancellation fee, listed below for its fixed rate and mortgage board rate loans.

Loan Package Full Redemption Fee Partial Repayment Fee Cancellation Fee
OCBC 2Y or 3Y Fixed Rate 1.5% 1.5% 1.5%
OCBC Mortgage Board Rates 1.5% If the remaining balance is over50% of the loan principal, no fees will be charged. Otherwise,1.5% will be charged as a fee.  1.5%

* Fixed rate refers to a consistent amount of interest at point in time.
* Floating rate refers to the amount of interest that is subject to fluctuation due to various economic factors.
* Mortgage board rate refers to a fluctuating rate decided internally at a bank.

 

How Does OCBC Personal Loan Compare to Other Local Banks?

Interest rates for housing loans change frequently in Singapore, so it is very essential to review your options. Let’s take a look at how OCBC compares to other banks in the country as of the 16th of October 2020:

  Loan Source Fixed Rate Floating Rate Loanable Amount Loan Tenure Processing Fee
  OCBC 1.45% (2 – 3 Years) •1.60% (Board + 0.8%, 2 Years after)
1.80% (Board + 0.8%, Years thereafter)
•Minimum S$300,000 for private home / S$200,00 for HDB flat
•up to 75% of amount of desired property
none none
  DBS 1.50% (2 -3 Years) •1.80% (FHR24 + 0.9%) •S$500,000 for private home / S$250,000
and above
none  none
  UOB (no current offerings) (no current offerings) •S$250,000 minimum
and above
none (no current offerings)

NOTE: UOB CURRENTLY HAS NO LISTED RATES FOR ITS LOAN OFFERS AS OF OCTOBER 16, 2020

 

What Makes OCBC Stand Out to Prospective Homeowners

With its competitive interest rates and its status as a long-established bank in the country, OCBC is more than a worthy bank for any borrower’s consideration. More than anything, OCBC provides varied options for different types of home loans, that makes it ideal for those who are looking to purchase their own home, and for those who are looking for home loan refinancing. 

What’s more, the bank offers different benefits for prospective clients that make applications easier, such as a sleek website and assistive chat support by dedicated mortgage specialists, allowing for a smooth transaction well within their claim of an hour.

OCBC keeps home loans simple, with straightforward and diverse offerings that can make the decision to apply for a loan much easier.

 

Eligibility and Requirements

OCBC has a very straightforward set of requirements prior to application. While each OCBC offering is likely to have specific criteria for eligibility, some may apply to all of their offerings.

To be eligible for one of the bank’s home loan packages, the requirements include:

  • Age: You must be at the minimum age of 21 years old.
  • Loan Principal: The loan principal minimum is S$300,000 for HBD housing loans, and at least S$500,000 for private housing loans up to 75% of the amount of your chosen property.
  • Employment: Whether salaried or self-employed, you can apply for a loan as long as you have a regular source of income, but will differ in requirements.
  • Income: You must prepare your latest payslip, and your latest bank deposit statement.
  • Nationality: Singaporeans, foreigners based or working in Singapore, and even borrowers outside of Singapore may apply for a loan. The requirements will be listed below.

While the application for a mortgage loan is commonly a complicated process that often consists of many steps and requires multiple forms, OCBC streamlines the process with its website. Borrowers can upon request be assisted by professional mortgage specialists during this application, but prior, may consult with other home loan experts.

Typically, applicants are required to provide personal information and identification, income, bank statements, and debt documentation. For those who are employed, borrowers are expected to provide the latest copy of their payslip, their latest tax income statement, or their CPF contribution statement for the last 6 months. Those who are commission-based and self-employed are required to submit their CPF contribution statement for the last 12 months.

The website is also connected to Singpass and your MyInfo, a government service that allows Singaporean residents to manage their personal data and documents that helps simplify online applications and processes, lending to a much faster home loan application due to less need for filling of forms.

The full list of documents you will need include:

  • HDB infoweb printout of your financial information
  • NRIC
  • IRAS Notice of Assessment
  • For salaried individuals: 6 months’ CPF Contribution History or Bank statement showing salary credit
  • For self-employed or commission-based individuals: 12 months’ CPF Contribution History

 

How to Apply for an OCBC Home Loan

First and foremost, it is highly recommended that you review the selection of loan packages prior to application, and have prepared the proper required documentation. Your Signpass can help further quicken your application.

The OCBC website offers a simple way to apply with easy to follow steps.

  1.  Determine the amount you may need for your loan. The OCBC website has a built-in calculator that can aid you in this particular step.
  2. Select your chosen financing option, whether you are looking to purchase a new home or refinancing your home loan. 
  3. Choose your desired loan package. An offer will be customized based on your selection.
  4. Determine if you are a lone or joint applicant. For joint applications, the other applicant will be asked to fill up a different form.
  5. Connect your Singpass MyInfo to provide your documents, or provide the required documentation.
  6. Wait for OCBC’s letter of offer, indicating that your loan is approved. This will be sent via Email or SMS, otherwise you will be contacted for more information.
  7. Accept the letter of offer by clicking on the link provided in the Email or SMS. Read through the terms and conditions carefully prior to accepting the loan.

 

Conclusion

OCBC offers a streamlined, approach to applications and offers competitive rates for both fixed and mortgage board rates. It also has an established credibility due to being one of the oldest banks in Singapore, and lauded internationality for its stability and security, making it one of the most ideal choices when it comes to getting a loan for your dream home.

It’s always important to consider your options when it comes to home loans, as such be mindful of all the features that come with it. Additional assistance is encouraged to make sure you find the perfect loan for you, and you can find it on loanadvisor.com

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