Apr 04, 2013
Singapore, April 1st 2013 - DBS Bank today announced the launch of the POSB HDB loan, a first-of-its-kind HDB home loan in Singapore. POSB HDB Loan is the first floating rate programme in Singapore to provide HDB homebuyers with the security of having interest capped below HDB concessionary rates for 10 years while benefiting from the current low interest rates.
This innovative mortgage offering underscores the bank’s commitment to bringing value to its customers. The POSB HDB Loan will form an integral part of DBS’ suite of mortgage offerings and is set to transform the HDB home financing landscape in Singapore.
When HDB was established in 1960, only 9% of Singaporeans lived in public housing. Today, more than 83% of residents in Singapore live in a HDB flat. To help more Singaporeans achieve home ownership, DBS was the first bank in Singapore to offer HDB home loan financing in 1974 through Credit POSB Pte Ltd.
Over the years, bank financing for HDB flats has remained relatively unchanged with varying options of fixed and floating programmes that are undifferentiated from private homes loans. Last year, two-thirds of the 59,000 HDB homebuyers took a direct loan from HDB at the concessionary rate of 2.60% instead of taking advantage of the current low interest environment.
“Mortgage is a long term financial commitment and there is a certain level of inertia once a homebuyer settles on the loan. Thus it is important for HDB homebuyers to consider loan options outside of the HDB concessionary loan during their purchase process. We also encourage customers to review their mortgage commitment periodically as part of their financial planning to optimise their household budget,” said Lui Su Kian, Head of Deposits and Secured Lending, DBS Bank.
Added Lui, “Over the years, DBS has introduced many innovative mortgage offerings to the market that have been well-received by our customers. With more than 4.5 million customers banking with us, we have been able to leverage on our customer insights to bring new offerings that continue to support home ownership in Singapore.” POSB HDB Loan customers also enjoy other features including waiver of fees and charges for early repayment, or sale of property.
Over the years, the bank has introduced many firsts to help promote homeownership. It was the first bank to offer 20-year housing loans and in 2007, DBS was the first in the market to adopt full transparency in all its loan packages. In the present low interest environment, DBS is also the only bank to offer a fixed rate programme that allows homebuyers to switch to floating rates or exercise the option to enjoy the same fixed rates for another two years and a floating rate programme with an interest rate cap.
Re-disseminated by The Asian Banker