Free Advice/Discussion on Bank Mortgage loan

[Property_Broker]

Can we immediately partial prepay after repricing?

Hi @crazythen

It will be depending on the package.

If the new repricing package allow partial prepayment during the lock in period, you can do partial prepayment during the lock in period.

If not most of the people will do partial prepayment + repricing concurrently.

 

[Property_Broker]

Curious,

when doing repricing or refinancing, will the banks conduct stress test again?

I can't comment for repricing.
Some of my clients have to reassess their income during repricing. Some of the clients don't need to.

As for refinancing, the bank will need to see the TDSR again. Hence stress test will involve again.

 

[Property_Broker]

If there's no free conversion after 1 year, might be abit of a personal risk appetite since sora 1 year down depends on many macro factors. However historically fixed should be above floating.. so there's indeed possibility that 2nd year floating could be better than fixed.

Based on my experience, I see this trend.

When the interest rate is going down, fixed rate will be lower than floating rate.

When the interest rate is going up, fixed rate will be higher than floating rate.

 

[cyberklan]

If there's no free conversion after 1 year, might be abit of a personal risk appetite since sora 1 year down depends on many macro factors. However historically fixed should be above floating.. so there's indeed possibility that 2nd year floating could be better than fixed.

I second this opinion

 

[Daveqn]

Hi @Daveqn

If you are comparing against [0.8% + MBR = 4%) vs [3m SORA + 0.5% = 4.2%], I will say that I prefer to stick with 0.8% + MBR = 4%.

FYI: 3m Sora is around 3.7% for now.

Until I see that 3m SORA is on a downtrend and it is going below 3.5%, I will not be going to reprice into 3m SORA + 0.5%.

Reason:
Since I am paying 4%, why do I want to pay 4.2%?

Since you mentioned that you will be selling your property soon, it might not make sense for you to go with refinancing.

Reason:
1) Incur clawback cash rebate from OCBC
2) Incur clawback cash rebate/legal subsidy from the OUTgoing bank

Did you try to request for OCBC repricing fixed rate that come with "Waiver of penalty due to sale"?

Meanwhile you are planning to sell with 2 years or 2 months?

Hi @Property_Broker

Has recently applied from OCBC for repricing again and obtained these offers:

1) 1 year fixed rate, there is no penalty for sale of property if it is sold after 1 year.
2) a 2 year fixed rate at 2.85% allows sale of property anytime without penalty, even within lock in period in 1st and 2nd year.
3) floating rate at 3month SORA + 0.5%, OCBC is not keen to grant waiver for sale of property penalty when I enquired.

Seems that banks are more keen to lock in fixed rate now and my best option is go along since will likely sell my HDB within next one year. Any advice pls ?

 

[celeries888]

Hi, I have a question regarding bank loan for hdb...

I received the letter of offer from bank for hdb mortgage but have not signed acceptance on any documents, is there any cancellation fees involved if I cancel the loan from the bank now?

 

[Property_Broker]

Hi @Property_Broker

Has recently applied from OCBC for repricing again and obtained these offers:

1) 1 year fixed rate, there is no penalty for sale of property if it is sold after 1 year.
2) a 2 year fixed rate at 2.85% allows sale of property anytime without penalty, even within lock in period in 1st and 2nd year.
3) floating rate at 3month SORA + 0.5%, OCBC is not keen to grant waiver for sale of property penalty when I enquired.

Seems that banks are more keen to lock in fixed rate now and my best option is go along since will likely sell my HDB within next one year. Any advice pls ?

Hi @Daveqn

Based on the OCBC repricing option that you share, I will say that you should go with 2.85% fixed for 2 years with Waiver of penalty due to sale during lock in period.

Reasons:
1) Since you are likely to sell your property within next 1 years, this package will suit your needs as it comes with waiver of penalty due to sale.
2) Fixed rate looks like a better option as compared to floating rate. The floating rate is around 4.06%( 3.56% + 0.5%) vs Fixed rate is 2.85%. (You can read the last few page of this thread. There is a lot of discussion on fixed vs floating rate.)

 

[Property_Broker]

Hi, I have a question regarding bank loan for hdb...

I received the letter of offer from bank for hdb mortgage but have not signed acceptance on any documents, is there any cancellation fees involved if I cancel the loan from the bank now?

Hi @celeries888

As long as you have not accepted digitally or wet inked, it means that you have not agreed to proceed with the bank. Hence there is no cancellation fee involve since you have not accepted it yet.


Best is to check with the bank on the matter. Just in case u accidentally accepted it digitally.

 

[ctan84]

Will like to seek some understanding on how a free repricing after 1 year works.

Currently I'm on a 2yr fixed rate plan with DBS. The effective date of my loan is mid-Jan 2024. The plan comes with a "Free Revision of Interest Rate" (I assume this means free repricing) a year after the effective date.

1) Does this mean I must utilize this free repricing immediately after the 1st year or I can continue to wait a few more months before I request for repricing if I feel the interest rate will drop further?

2) How many months in advance do I need to contact the bank to request for the revised interest rate for this repricing?

3) I'm allowed to do a penalty-free partial repayment of the loan 2 years after the effective date (or mid Jan 2026). But if I were to reprice next year, does it mean my plan gets "restarted" and hence I can only do the penalty-free partial repayment of the loan in 2027 instead?

Current outstanding loan amount is about $194k or so.

 

[Property_Broker]

Will like to seek some understanding on how a free repricing after 1 year works.

Currently I'm on a 2yr fixed rate plan with DBS. The effective date of my loan is mid-Jan 2024. The plan comes with a "Free Revision of Interest Rate" (I assume this means free repricing) a year after the effective date.

1) Does this mean I must utilize this free repricing immediately after the 1st year or I can continue to wait a few more months before I request for repricing if I feel the interest rate will drop further?

2) How many months in advance do I need to contact the bank to request for the revised interest rate for this repricing?

3) I'm allowed to do a penalty-free partial repayment of the loan 2 years after the effective date (or mid Jan 2026). But if I were to reprice next year, does it mean my plan gets "restarted" and hence I can only do the penalty-free partial repayment of the loan in 2027 instead?

Current outstanding loan amount is about $194k or so.

Hi @ctan84


If your package come with "Free conversion after 1 years" , it means that you can change package with the same bank after 1 years.

Qn1 and 2)

Assuming if your loan commence on 15/1/2024.

You can reprice with them after 15/1/2024.

The repricing process is typically around 4 weeks of processing. So you can reach out to them as early as 15/12/2024(1 month beforehand)

You can choose not to proceed with the repricing if the repricing offer is not competitive. You can choose to wait out a few months before repricing with them as well.

3)

If you repriced to a new package, everything will be based on the new package term and condition already.

 

[ctan84]

Hi @ctan84


If your package come with "Free conversion after 1 years" , it means that you can change package with the same bank after 1 years.

Qn1 and 2)

Assuming if your loan commence on 15/1/2024.

You can reprice with them after 15/1/2024.

The repricing process is typically around 4 weeks of processing. So you can reach out to them as early as 15/12/2024(1 month beforehand)

You can choose not to proceed with the repricing if the repricing offer is not competitive. You can choose to wait out a few months before repricing with them as well.

3)

If you repriced to a new package, everything will be based on the new package term and condition already.

Hello, thank you for the explanation. 1 more thing, from your experience usually at what loan quantum will the bank stop offering fixed price plan / offer to reprice?

 

[Property_Broker]

Hello, thank you for the explanation. 1 more thing, from your experience usually at what loan quantum will the bank stop offering fixed price plan / offer to reprice?

Hi @ctan84

Usually it is around 80k~100k. Hence try to do partial/full redemption once your loan amount is left with 100k+.

 

[ctan84]

Hi @ctan84

Usually it is around 80k~100k. Hence try to do partial/full redemption once your loan amount is left with 100k+.

Sorry another noob questions, in the event the principle sum is <$100k and the bank don't reprice, means I have to pay the existing floating rate or what's indicated in my plan (i.e. 3rd year onwards is 3M SORA + 1%)?

 

[Property_Broker]

Sorry another noob questions, in the event the principle sum is <$100k and the bank don't reprice, means I have to pay the existing floating rate or what's indicated in my plan (i.e. 3rd year onwards is 3M SORA + 1%)?

No worries. There is no noob qn... We are here to learn as well.

Yup. You will have to stick with your existing package. Which means if your third-year rate is 3m Sora + 1%.. You will have to be servicing the loan with 3m sora + 1% till the loan ended.

 

[ctan84]

No worries. There is no noob qn... We are here to learn as well.

Yup. You will have to stick with your existing package. Which means if your third-year rate is 3m Sora + 1%.. You will have to be servicing the loan with 3m sora + 1% till the loan ended.

Hello, I just realized its stated on the bank website for repricing that besides loan amount need to be at least $100k, the tenure needs to be more than 5 years. By the time I have to reprice, it will still be above $100k, but the tenure will be slightly under 5 years (4 years 11.5 months or so), will this affect my ability to reprice?

 

[Property_Broker]

Hello, I just realized its stated on the bank website for repricing that besides loan amount need to be at least $100k, the tenure needs to be more than 5 years. By the time I have to reprice, it will still be above $100k, but the tenure will be slightly under 5 years (4 years 11.5 months or so), will this affect my ability to reprice?

I have one client same situation as you.

The bank still let him reprice. But I believe it is case by case basis.

 

[ctan84]

I have one client same situation as you.

The bank still let him reprice. But I believe it is case by case basis.

Ah ic. Thank you so much for patiently replying all my questions. Really apprecitate it !!!

 

[Property_Broker]

Ah ic. Thank you so much for patiently replying all my questions. Really apprecitate it !!!

no worries! Happy to advise always. Cheers.

 

[belgarathc]

Property_Broker, do you know if BUC can be repriced from sora+0.8 to sora+0.4 since as I understand, fixed rates are not available ?

 

[inf|uencer]

no worries! Happy to advise always. Cheers.

can share ur cea license number? hehe