New POSB home loan package offers rate similar to that of HDB loan, Latest Singapore News - The New Paper
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New POSB home loan package offers rate similar to that of HDB loan

DBS Bank launched two new home loan packages on Thursday, one targeted at Housing Board flat owners.

One of the deals allows new and existing owners of HDB flats who earn less than $2,500 a month to take out a mortgage from POSB, which is part of DBS Group, at an interest rate of 2.6 per cent a year.

The package is also available to home owners who have already taken up two or more mortgages from HDB, which makes them ineligible for another HDB concessionary loan.

Borrowers who take up the POSB HDB home loan package and have DBS Multiplier and POSB Save As You Earn accounts can earn higher interest on their savings.

Mr Alfred Chia, chief executive of financial services provider SingCapital, said the POSB loan rate is similar to the HDB loan rate, which will continue to be pegged at 0.1 percentage point above the prevailing Central Provident Fund Ordinary Account (OA) interest rate of 2.5 per cent from Oct 1 to Dec 31.

Mr Chia noted that the down payment for an HDB loan can be paid using OA savings, unlike a bank mortgage where at least 5 per cent of the down payment must be paid in cash.

The upside of taking a POSB loan is the home buyer earns additional interest on his savings accounts and gets a cash bonus of $500.

DBS also announced the DBS HomeSaver scheme on Thursday.

This allows home buyers with DBS Multiplier and POSB Save As You Earn accounts to earn higher interest and a cash bonus when they take up a home loan and a mortgage insurance plan with the bank.

Mr Jeremy Soo, DBS' managing director and head of the consumer banking group for Singapore, said the sustained rise in interest rates and volatility in the markets are eroding the value of customers' savings, and making it difficult for them to plan for their financial needs.

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