What is the most critical parameter to a mortgage? The interest rate.
Interest is the price paid for the borrowed capital and it varies from one institution to another. Due to the considerable influence of the free market on the mortgage industry in Singapore, prices and interest rate vary according to the demand and supply of the free market.
If you are looking to procure a home loan, you have landed on the right article. Read on to find out you can find the best mortgage loan rate.
Borrowers eligible for HBD home loans benefit from reasonably stable interest rates pegged to the CPF rate. Although there are strict qualification criteria and fewer repayment options, HDB loans are best for people with less disposable income with the added bonus of stability.
Bank Home Loans
If you don’t qualify for a HBD loan, or if you don’t prefer the option, banks offer mortgages as substitute options for aspiring homeowners. Banks provide both fixed and floating mortgage rates. Also, banks offer flexible repayment terms, and each bank is free to determine the interest rates for their product. In most cases, the prices are pegged on indexes such as SIBOR and SOR.
Below are tips to get Singapore’s best mortgage rates.
You may have a good idea of the home loan package you like, but it is advisable to spend some time gathering as much information on other options available, to compare housing loan rates in Singapore.
You can ask family or friends for information or better still, visit trusted experts. A housing loan calculator will help you shop around for favourable rates and improve your chances of finding a perfect fit.
Decide on Your terms
Many people only focus on the interest rate and turn a blind eye to other critical conditions of a mortgage. Terms including loan tenure, penalties applied on redemption, rate style, whether fixed or variable rates and its lock-in period should influence your decision.
Analyse Other Fees You Have to Pay
Jot down all other costs or subsidies that come along with the mortgage facility and contrast with the interest rate offered. Check out whether the costs you will incur significantly affect your loan flexibility and make a decision on which is the preferable option. For instance, a bank can offer lower rates but have a longer lock-in period and higher penalties when you want to transfer your facility to another lender, thus restricting you from taking advantage of lower interest rates or competition.
In conclusion, the best mortgage rate is not necessarily the one with the lowest interest rates. It is the one that works best for your situation. These pointers will help you find the best mortgage loan rate.