Tag Archives: Mortgages

New benchmark for DBS mortgages

Posted on 18 Jun 2014 | Comments Off on New benchmark for DBS mortgages

In order to provide borrowers with a more simple and easy-to-understand mortgage package, DBS Bank has established a new yardstick for calculating the interest rates of their housing loans according to media reports.

Dubbed as the fixed deposit home rate (FHR), it is derived from the simple average of DBS Bank’s 12-month and 24-month fixed deposit (FD) rates. At present, the FHR is at 0.40 percent, given the 12-month FD rate of 0.25 percent, while its 24-month rate stands at 0.55 percent.

“The response has been encouraging”, said DBS Bank’s Managing Director Lui Su Kian.

Since the FHR package was introduced around three months ago, over 50 percent of its clients opted for it. Others still favour SIBOR-based mortgages, while the rest prefer fixed-rate loans, noted Lui, who is also the Head of Deposits & Secured Lending at DBS Bank.

Nevertheless, the company still offers housing loans based on the Singapore Interbank Offered Rate (SIBOR), which remains as the most in-demand mortgage at other financial institutions.

“Most consumers lean towards SIBOR rates – they want something simple and easy to understand,” Lui said. These wholesale rates are also accessible, but their formulas are quite technical.

Furthermore, SIBOR rates are more volatile compared to fixed deposit rates. In fact, the most popular mortgage tenure — the three-month SIBOR – ranged from 0.37083 percent to 0.40626 percent in the past two years.

“Hence, FHR will appeal to home buyers who wish to take advantage of the low interest environment and yet have some protection from market movement,” added Lui.

Comments Off on New benchmark for DBS mortgages

Posted in Loan / Mortgage / Finance

Tagged , , , ,

StanChart sees further S’pore home price drop

Posted on 3 Jun 2014 | Comments Off on StanChart sees further S’pore home price drop

COOLED DOWN MARKET, StanChart’s Asean CEO said the curbs ‘really prevented the bubble from forming. This downward adjustment in prices is not a very drastic and sharp drop. That would add to the stability of the market.’ –

SINGAPORE’S home prices will probably fall further before the housing curbs introduced in the past five years are scaled back, says Standard Chartered Plc’s Southeast Asia head.

“You would start to take away some of these measures if price growth reaches a certain level of equilibrium,” Lim Cheng Teck, StanChart’s CEO for Asean, said in an interview yesterday.

“I don’t think we are at an equilibrium yet.”

The city’s private home prices dropped by the most in almost five years following a campaign that started in 2009 to curb property market speculation, with government curbs ranging from taxes on property sales, additional levies on foreign buyers and mortgage limits.

Mr Lim declined to predict how much of a downside he expects for home prices before housing measures would be lifted.

Monetary Authority of Singapore (MAS) managing director Ravi Menon said on May 24 that the property measures may not be permanent and will only be used from time to time, The Business Times reported, citing a speech made by him.

Under Singapore’s loan framework, lenders must consider a borrower’s total debt when granting mortgages, the central bank said last year. A borrower’s loan repayments, including mortgages, shouldn’t exceed 60 per cent of income, based on the policy guidelines.

“It’s still too early to remove curbs,” said Donald Han, managing director of Chesterton Singapore Pte, a real estate consulting company. “The government will monitor but its fingers won’t be pressing any buttons at this point in time.” Some developers that have cut prices by 10-15 per cent are drawing buyers, he said.

Mr Lim’s outlook mirrors that of CapitaLand Ltd, Singapore’s biggest developer, which said in February that the government may start easing some of its property measures if home prices drop 5-10 per cent this year. Some curbs that were introduced were for the “short term”, such as stamp duties or taxes for homebuyers, CapitaLand CEO Lim Ming Yan said in an interview at the time.

An index tracking private residential prices fell 1.3 per cent in the first quarter this year, following a 0.9 per cent drop from a record in the previous three months, according to government data. The latest decline is the largest since June 2009.

Declining home sales also eased demand for housing loans. Mortgages increased just 7.9 per cent in March – the slowest pace since June 2007, according to central bank data.

The curbs “really prevented the bubble from forming”, StanChart’s Mr Lim said. “This downward adjustment in prices is not a very drastic and sharp drop. That would add to the stability of the market.”

Elsewhere in the region, he said the “big growth markets” for the bank are Indonesia, the Philippines and Malaysia. Standard Chartered, which employs 30,000 people in South-east Asia, is “keen to participate” in the Myanmar banking sector when it’s opened to foreign lenders, he said. The bank has a representative office in Yangon.

Comments Off on StanChart sees further S’pore home price drop

Posted in Loan / Mortgage / Finance, Property Market / Real Estate

Tagged , , , , , , , , , ,