Free Advice/Discussion on Bank Mortgage loan

chuweisiao

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Hi Joanie_Dan,

Thanks for your reply, sorry for the mistake, you are right that 5th year for Bank C is 1.25% + 1/3 mth sibor and the switch of sibor is 1/3/6/12.

We are just very curious for BUC, are we allowed to switch to fixed at TOP, because our banker said that is not possible, as fixed for officially completed properties.

On top of that, I'm still puzzled. Do you mean no matter what, Bank C rates is still better than Bank D even if one decides to change to fixed rate at TOP which is around year 3. I'm puzzled because during year 1 & 2, Bank C is charging +0.15% more than Bank D and in 3rd year, 0.05% more than bank D. Even though one can choose 1 month sibor for bank C, the difference between 3mth sibor and 1mth sibor is relatively very little, like 0.363 for 3mth vs 0.311 for 1mth currently. So, may I just ask for anyone or your guidance how is bank C still better in this sense? Thanks! really appreciate any advice.

No matter whether you are changing to fixed rate upon top or CSC, bank C sibor rates are lower than bank D.

Also bank C rates are +1.25% after yr5, not 0.95, n e sibor switching is 1/3/6/12.

Bank O u can forget about it.
 

Fifa2006

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Hi chuweisiao ,
I am not too sure if your package exist, if it exist it will be th market best packsge.

to my understanding for that package you mention 4th year is 3mth sibor + 1.25%

if this package doesnt exist i would suggest you to take up
1st 3 years : 3mth sibor + 0.85%
4th yr : 3mth sibor + 1 %
TA : 3mth sibor +1.25%

do correct me if i am wrong. I believe the other package you mention is from Bank c
Bank c rates is attractive mainly on 3rd and 4th years.
1st 2 years :3mth sibor + 0.95%
3rd & 4th yr : 3mth sibor + 0.85
TA: 3mth sibor + 1.25%
 
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Fifa2006

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tanalley my suggestion is to take up a package from Bank M
1st yr : 1.25%
2nd yr :1.45%
3rd yr 1.55%

if you were to take on bank p 10 yrs package , rate will be around 1.8% .
it will be on average at least 0.4% higher each year for 3 years.

do take tat it does not state that it will capped at 2.5% , it is stated as capped at cpfoa rate . although cpf oa rate stay the same for the past years but if it were to increase , your cappes of 2.5 will also shift up :)

do take note that it doesnot say it will capped at 2.5% but capped at cpfoa rate. in any case cpf oa rate increase your cap will also follows.
 

chuweisiao

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I see! thats nice to hear! alright, once its approved, i'll update u guys if its indeed that rate. i'm in doubts too because fellow project buyers also said their bankers from the same bank doesnt offer that kind of rate.

Hi chiweisiao ,
I am not too sure if your package exist, if it exist it will be th market best packsge.

to my understanding for that package you mention 4th year is 3mth sibor + 1.25%

if this package doesnt exist i would suggest you to take up
1st 3 years : 3mth sibor + 0.85%
4th yr : 3mth sibor + 1 %
TA : 3mth sibor +1.25%
 

Fifa2006

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Hi All,

Just to prewarn you all, recently I got some feedback from client. I quoted client some special rates by the bank and the branch banker mention he can get it even lower , in the end also get the rates I quoted. sometime becoz of a qouta to hit, banker have to do such thing :)
 

joanie_dan

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Hi Joanie_Dan,

Thanks for your reply, sorry for the mistake, you are right that 5th year for Bank C is 1.25% + 1/3 mth sibor and the switch of sibor is 1/3/6/12.

We are just very curious for BUC, are we allowed to switch to fixed at TOP, because our banker said that is not possible, as fixed for officially completed properties.

On top of that, I'm still puzzled. Do you mean no matter what, Bank C rates is still better than Bank D even if one decides to change to fixed rate at TOP which is around year 3. I'm puzzled because during year 1 & 2, Bank C is charging +0.15% more than Bank D and in 3rd year, 0.05% more than bank D. Even though one can choose 1 month sibor for bank C, the difference between 3mth sibor and 1mth sibor is relatively very little, like 0.363 for 3mth vs 0.311 for 1mth currently. So, may I just ask for anyone or your guidance how is bank C still better in this sense? Thanks! really appreciate any advice.

Bank C or D also can change to fix rate upon TOP. Which bank will offer better rates will be an issue 3yrs later, no one can foresee.

For your DBS rate of 0.80% for first 3 yrs, it should be a deviated rate. If finalized that you are given this package, I will think it is a very decently good package for now.
However if you are getting 0.85% instead, upon e 3rd yr rate, bank C's 1mS+0.85% will have covered the better rates you get from bank D as the initial 2 yrs disbursements are little.
Come yr 4, bank c is much better than bank D at +1.00%.

If you have check a history of 1m vs 3m sibor, you will not take a current picture of e difference and use it for e next 20-30yrs. 1m sibor has been approx 0-0.25% cheaper over e past 10yrs. So e gain u can get from 1ms is not only 0.05%

There is no guarantee that u will be able to change to a good fixed rate upon TOP. Regulations are changing, if your financial situation at that pt in time is worse off than current, I.e. wife become tai tai stop working, left with a single income source, you might fail bank's calculation methodology and fail to reprice to any other package. In that case, isn't bank C's rate more suitable as it is cheaper from yr 4 onwards?
 

chuweisiao

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Joanie_dan, thanks for your very detailed explanation, I get it now! I really appreciate your help. And to fifa too, you guys are right, after the Bank D banker got back to me, he said he was not able to get the rate of 0.8%. -_- But I don't blame him as he has promised that it is subject to approval. So, it is 0.85% for first 3 years and subsequently 1% for 4th and 1.25% for 5th. So we have decided to go with Bank C instead now. Even though the first 3 years interest rate is going to be just a bit higher. In the long run, it is still a wiser choice.

Bank C or D also can change to fix rate upon TOP. Which bank will offer better rates will be an issue 3yrs later, no one can foresee.

For your DBS rate of 0.80% for first 3 yrs, it should be a deviated rate. If finalized that you are given this package, I will think it is a very decently good package for now.
However if you are getting 0.85% instead, upon e 3rd yr rate, bank C's 1mS+0.85% will have covered the better rates you get from bank D as the initial 2 yrs disbursements are little.
Come yr 4, bank c is much better than bank D at +1.00%.

If you have check a history of 1m vs 3m sibor, you will not take a current picture of e difference and use it for e next 20-30yrs. 1m sibor has been approx 0-0.25% cheaper over e past 10yrs. So e gain u can get from 1ms is not only 0.05%

There is no guarantee that u will be able to change to a good fixed rate upon TOP. Regulations are changing, if your financial situation at that pt in time is worse off than current, I.e. wife become tai tai stop working, left with a single income source, you might fail bank's calculation methodology and fail to reprice to any other package. In that case, isn't bank C's rate more suitable as it is cheaper from yr 4 onwards?
 

chuweisiao

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You are totally right. I'm a living example. And I changed my mind of taking this bank.

Hi All,

Just to prewarn you all, recently I got some feedback from client. I quoted client some special rates by the bank and the branch banker mention he can get it even lower , in the end also get the rates I quoted. sometime becoz of a qouta to hit, banker have to do such thing :)
 

Fifa2006

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thats normally the case for "hit and run" bankers. So as a mortgage broker we dun use "new" banker unless existing banker swop a bank :). Most Bankers are with me for more than 5 years. Most of them are experienced enough to "see" if the rates are do-able. Most importantly they wont promise what they cant get :)

Do note that doing an application does not means that you are bound to the contract alrdy . You are only bind by the contract after signing the letter of offer.

Would ask my client not to go with "hit and run" banker coz next time when ubare in trouble they will not be there for you :)
 
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ArtURtlE

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Hi All,

Project details : BUC (Private) /Progressive payment
TOP: 2017

was offered the following rates


Bank M
3m sibor + 0.7% - year 1
3m sibor + 0.8 % - year 2
3m sibor + 1.25% - thereafter

no lock in

Bank D
3m sibor + 0.85% - year 1-3
3m sibor + 1 % - year 4
3m sibor + 1.25% - theafter
no lock in

Bank O
3m sibor + 0.85% - year 1-3
3m sibor + 1.25% theafter
2 years lock in

may i know which package is the most attractive? Based on my analysis, should still go for Bank D since bulk of loan disbursement will come from year 3/4 onwards.Most probably will convert to fixed upon TOP. Can anyone advise how does Bank M fixed rates compare to Bank D too? Thanks
 

Fifa2006

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in fact bank D , O & U is providing the same rates.

I will be able to assist you on your loan :)



Hi All,

Project details : BUC (Private) /Progressive payment
TOP: 2017

was offered the following rates


Bank M
3m sibor + 0.7% - year 1
3m sibor + 0.8 % - year 2
3m sibor + 1.25% - thereafter

no lock in

Bank D
3m sibor + 0.85% - year 1-3
3m sibor + 1 % - year 4
3m sibor + 1.25% - theafter
no lock in

Bank O
3m sibor + 0.85% - year 1-3
3m sibor + 1.25% theafter
2 years lock in

may i know which package is the most attractive? Based on my analysis, should still go for Bank D since bulk of loan disbursement will come from year 3/4 onwards.Most probably will convert to fixed upon TOP. Can anyone advise how does Bank M fixed rates compare to Bank D too? Thanks
 
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magnus0304

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Hi, I would appreciate some advice please.

1. Background Info

Currently, we own a 5-room flat valued at $525k.
It’s my first flat purchase. It was purchased at $186k, financed by HDB loan with 30-year tenure.
I have paid the monthly instalments for 7 years, left with 23 years.
At moment, I have $87k balance left to pay. Monthly instalment for the flat is $650/mth, all paid using CPF, zero cash payment.

A bit info about my family.
Me and my wife are in our early thirties.
Both husband and wife are working, family gross monthly income is 6k.
We have 3 kids (Oldest 11, youngest 8 months).
We have a car that we pay 400/mth, include fuel expenses 650/mth.
Risk appetite : I do have a family to provide for, but I’m open to calculated risks, and willing to make informed decisions to take a certain amount of risk.

2. My wife and I are currently exploring our options to invest and grow our wealth progressively. Would greatly appreciate it if someone could analyse the situation above and answer the questions below.

i) Recently, we went to view a commercial shop space (under construction), priced at 700k, and considered tapping into the liquidity of our home to fund the purchase for a 2nd property (commercial property). Could someone explain to me how does this works and how can we go about doing it?

ii) Frankly, I’m not very financially savvy. What are our other options (other financial instruments and strategies) besides real estate, above (i), if we are considering tapping into the liquidity of our home?

Sincere thank you.

Regards,
Ah Lee
 
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Fifa2006

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Hi Ah Lee,

For hdb the only way for you to tap into your fund of your hdb is to sell it away. You are unable to cashout on hdb. Hope this helps :)
 

magnus0304

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Hi Fifa2006,

Thanks for the reply.

So means,

if i bgt my flat using HDB loan, not able to refinance.

if i bgt my flat using bank loan, able to refinance.

Okay, i get it.

------

Pardon me. I got 2 questions.

1. If i'm willing to take certain risks, would you advise to sell the flat?

2. Presuming, i sell my flat. I assume all of the funds would return to my cpf account. And if my family shifts to my mother-in-law's place to take care of her (2-3 years).

Can i fund my purchase of the commercial property with my cpf?

(Once the commercial property is completed and ready to be rented out. Once rented, it will generate a steady stream of income, the property will be self-sustaining and the rent collected will be used to paid for the monthly instalments.

After that, i will purchase another HDB flat (this will be the 2nd time i purchase a HDB flat) for residential purposes and my family will be move back in.)


Is s/n 2 workable?
 

Fifa2006

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Hi Ah Lee,

You are able to refinance but not cashout.

Refinance typically means a switching of bank for a better interest rate at the current loan amount.

Cashout means equity out of the property.


You can go to the following Hdb website - Sale Proceeds Calculator . Input the figures to see what is the estimated cash proceed you will be getting after selling your Hdb.

As for commercial property, cpf usage is NOT allowed.

Do take note that not all property will be rented out after the project complete. If you are free, you can dropby a project call Alexis at red hill and you will know what I mean :)
 

bernugget

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BUC rates

Hi All,

Project details : BUC (EC)
TOP: 2016

was offered the following rates on a 600k onwards mortgage

Bank M
3m sibor + 0.8% - year 1
3m sibor + 0.95 % - year 2
3m sibor + 1.00% - year 3
3m sibor + 1.25% - thereafter
no lock in

Bank D
3m sibor + 0.85% - year 1-3
3m sibor + 1 % - year 4
3m sibor + 1.25% - theafter
no lock in

Bank A
3m sibor/sor combo + 0.95% - all years
no lock in

Comments? A is attractive but what are the potential pitfalls?
 

Xenith

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1.25
1.45
1.55
fixed 3 years

Hi,

Currently I'm on HDB loan for 200k for about 20years. My first year into it. Possible to refinance and what would your recommendations be?

I'm quite risk adverse and want stability... would prefer fixed rates for as long as possible... looking at POSB 10yr loan. Is it good?

Any hidden charges in refinancing?

Appreciate your inputs/help. Thanks!
 

Fifa2006

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Bernugget:

few question for you
1) are you getting on Progessive payment or deferred payment
2) Are yoy planning for a switch from floating rate to fixed rates after TOP?
Hi All,

Project details : BUC (EC)
TOP: 2016

was offered the following rates on a 600k onwards mortgage

Bank M
3m sibor + 0.8% - year 1
3m sibor + 0.95 % - year 2
3m sibor + 1.00% - year 3
3m sibor + 1.25% - thereafter
no lock in

Bank D
3m sibor + 0.85% - year 1-3
3m sibor + 1 % - year 4
3m sibor + 1.25% - theafter
no lock in

Bank A
3m sibor/sor combo + 0.95% - all years
no lock in

Comments? A is attractive but what are the potential pitfalls?
 
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