Finding a home is the easy part, it’s paying for it that can be a little more complicated. Fortunately, banks are equipped with unique financing products that allow customers access to funding for these properties. Although some institutions require customers to put down a deposit, there are some that provide customers with finance of up to 104%. These will depend on the credit regulation of that country and also the internal policies. This review takes a closer look at DBS Bank Mortgages to discover where it ranks among its peers. One of those peers happens to be the mortgage division of Bank of Ireland, which we recently reviewed.
About DBS Bank
DBS Bank was founded in time to assist the Singapore government to initiate a plan to modernize Singapore. This comes short on the heels of its independence after years of struggle against Malaysia. During this period, the government and citizens sacrificed much in order to achieve their goals. It took about two decades, however, Singapore is now considered one of the most prosperous nations in the world.
Getting Into the Property Market at the Right Time
The economy plays a big role in determining the right conditions for potential homeowners to get the best deal. It’s not just about the purchase price of the property, it’s also about the conditions at the financial institution customers wish to approach for their loan. The rates, term, and deposit requirements make a big difference.
Be Financially Fit
For homeowners, there are few things as stressful as not being able to make mortgage repayments. Customer who have the financial means to put down a reasonable deposit, often have the leverage to negotiate rates and other pricing matters. Also, a good credit score forms part of financial fitness. The better the score, the better the negotiation power. Rather wait a little while to have more funds to play with than just going for the first offer on the table.
Furthermore, customers have to prepare themselves for all sorts of costs relating to the property. These include attorney costs, general repairs, and maintenance or alterations, decor, and more.
Consider the Location and Pricing
There is a saying that tells us if something is too good to be true, it probably is. A property that carries a good price should be relative to the area. If a property is far cheaper than a similar property is in a nearby area, it might not be a good area. Do a bit of research to find out whether there are issues in the area such as crime, pollution, or even general disruptions. If other properties in the area are reasonably priced and this one is far lower, there could be structural or other issues. Ensure that the agent provides all the information relevant to the property.
Buying a nice house in a bad area is not a good idea, as the possibility of overcapitalization is always a threat. This means that customers will never get the true value of the property purely because it’s based in a bad area. The actual cost of the upgrades and finishes exceeds the value of the property.
DBS Bank Mortgages Product Offerings
Buying a Private Property
DBS customers have access to a wide variety of options when they decide the purchase a property. Furthermore, the loan packages offer a variety of options in terms of interest rates.
- Customers have access to the DBS Multiplier Program, which allows them bonus rates on their savings accounts.
- The accounts provide customers with transparent rates, so they know exactly what they’re getting themselves into.
Floating Rate Package
This loan type is also known as the Fixed Deposit Home Rate 9. It is based on the prevailing interest rate for 9 months of the Singapore Dollar fixed deposit interest rate. This is for amounts within S$ 1,000 and S$ 9,999 or a sum the bank may specify. Finally, this rate is far less volatile than SIBOR rates.
Fixed Rate Package
This rate option provides customers with the peace of mind that their rate won’t fluctuate for a number of years.
Floating Rate Package (FHR) with 2 Years Cap
This option allows customers access to a capped rate for a period of time.
Refinancing a Property
When customers choose to refinance with DBS Bank, they have access to a variety of home loan options. Furthermore, they also have access to incredible interest rates.
- Customers have access to the Floating Rate Package, a Fixed Rate Package, or the Floating Rate Package with a 2-year cap.
- The refinance option also allows customers access to a term loan should customers have equity in their property.
Buying an HDB Flat
This option allows customers access to finance for Built-to-Order flats or a resale flat.
DBS HDB Loan
Customers enjoy a fixed deposit home loan rate for a specified period on this loan. Furthermore, the loan amount is up to 80% of the purchase price or market value, whichever is lower.
- Customers are required to put down a deposit of at least 20%.
- The loan provides a 15% CPF and a minimum 5% cash payment.
- Finally, customers don’t pay additional charges if they prepay their loan.
HDB Concessionary Loan
This loan type offers customers a flexible interest rate. Furthermore, the loan amount is up to 90% of the value of the property or the sale price, whichever is lower.
- Customers are required to put down a deposit of 10% at least.
- They also enjoy a CPF of 10% and no minimum cash payment.
- Finally, customers aren’t penalized for settling their loans early.
Refinancing an HDB Loan
This option is suitable for those who already have HDB loans, and wish to refinance. Furthermore, DBS Bank provides customers with rates lower than HDB rates.
- Customers enjoy a transparent and competitive interest rate.
- There is also the opportunity to save additional funds with the DBS Multiplier Program.
- Finally, customers have to check whether the loan has passed the lock-in period.
This loan type is suitable for those who wish to do something different with their property. Furthermore, those who already have their loan with DBS Bank will enjoy one of the lowest renovation loan rates on the market.
- Customers choose a loan period of 1 to 5 years for the loan repayments.
- Furthermore, the loan amount is up to S$30,000 or 6 times the customer’s monthly salary, whichever is lower.
- There is also the comprehensive insurance coverage option with this plan.
- The loan can be applied for by the homeowner or a family member who has consent from the homeowner.
- There is a minimum income requirement of S$24,000 per annum.
- Finally, this loan can be used for electrical and wiring works, built-in cabinets, painting and re-decorating works, structural alterations, and more.
DBS Bank also happens to offer some attractive loan packages apart from mortgages. We recently reviewed these.
What We Like About DBS Mortgages
These loans meet the needs of the customers by providing them with a few options in order to structure the loan package they need. Apart from the loan amounts and periods, customers have a number of other options available to them as well, such as the types of properties they will finance.
The rates are also of great value here. Customers can decide at inception whether they want to go with a fixed rate for a period of time, enjoy a flexible rate, or have a combination of the two. The rates are also fairly competitive.
The RDB loan options are fantastic, and DBS pride themselves in the fact that their rates are better than the traditional DBS structures.
Furthermore, one of the main attractions of these loans is that customers who wish to pay off their loans before the end of the term aren’t penalized.
Finally, what makes these loans even more attractive is that many of them are linked to the DBS Multiplier Program, which has a positive effect on the interest rates for savings.
What We Don’t Like About DBS Bank Mortgages
The lack of mortgage type options places a bit of a damper on this review. We’re missing the specific loan types for property investments such as Buy to Let, and also options for those who wish to build their home off plan.
Critical Review Rating DBS Bank Mortgages – 9 of 10
One of the toughest things when doing a review is finding a bank that does everything for the customer’s benefit and still misses out on their perfect score. Unfortunately DBS Bank Mortgages ticks all the boxes when it comes to satisfactory products, but they just don’t meet that perfect score. The reason is the lack of loan type choices.
Customers who are in a position to expand their property portfolios will want access to more. They will want to invest in properties and have loan options that tick those boxes. It’s a simple addition to make to their product fleet and will make the world of difference to their score. We score the bank a reluctant 9 and hope to improve it to 10 in the near future.
It's not easy to get a perfect score on mortgages. We also reviewed the mortgages offered by National Bank of Abu Dhabi.