Search Articles

in

Recommended For You

Refinancing: Comparing Home Loans
Refinancing: Comparing Home Loans

02 Apr 2014

2013 marked a year with an astonishing array of property rules and ...


Refinancing that home loan on many a to-do list
Refinancing that home loan on many a to-do list

The Straits Times -
02 Mar 2014

Borrowers should do their sums and assess all options before pickin...


A smart way to property investment
A smart way to property investment

The Business Times -
17 Feb 2014

Reits, with their high liquidity and lower capital requirement, are...



Latest Related Ads

NV Residences
NV Residences (D18) Condominium, For Sale

Rarely Available! 1
bedroom, 495 sq ft unit
for


Ecopolitan
Ecopolitan (D19) Executive Condo, For Sale

The Ecopolitan
EC ++Register your
interest now for


DUO Residences
DUO Residences (D07) Apartment, For Sale

DUO Residences for
Sale! 4
Bedrooms 1927sqft High



Featured Videos

Newsletter

Subscribe to receive the hottest news & property trends, updates on popular properties and promotions from STProperty & our partners

Financial Guide

Home loan repayment can now stretch to 50 years

UOB introduces home loan that spans half a century - likely the longest-term loan available here

The Straits Times - July 20, 2012
By: Yasmine Yahya

| More
Home loan repayment can now stretch to 50 years

UNITED Overseas Bank (UOB) has introduced a home loan that spans half a century - likely the longest-term loan available here.

UOB introduced this longer loan duration as more customers have been requesting for such loans.

However, these loans come with conditions. 'This type of loan is applicable to private residential and HDB loans only,' said Ms Chia Siew Cheng, UOB's head of secured loans and personal financial services. As well, borrowers above a certain age are not eligible, but UOB declined to say what the cut-off age is.

And if the property is leasehold, it needs to have at least 35 years left on the lease at the end of the 50-year loan.

Ms Chia noted that the loan has its pros and cons. Having a longer term 'will result in a smaller monthly loan instalment and will be easier on monthly cashflows. However a longer repayment period also means that more interest will be payable'.

Financial adviser Damian Pang warned that by taking on such a long-term loan, the homeowner will be servicing the loan long into his retirement years.

A quick check with other banks here found that the longest loan term was 40 years.

At OCBC, for example, the maximum loan period for private and HDB homes is 40 years, or up to the age of 75 years, whichever is earlier.

At HSBC, customers with at least $200,000 with the bank can get loans of up to 40 years. Others can receive loans of up to 35 years, at the most.

Even then, most customers opt for loans of just 30 years, said Mr Harmander Mahal, HSBC Singapore's head of customer value management. Only about 1 per cent of customers take up the 40-year loans.

Longer term loans require the borrower to pay a smaller sum each month. This gives consumers the confidence to purchase new homes, and could help to keep prices buoyant, said Mr Ku Swee Yong, the chief executive of International Property Advisor. 'It improves affordability, which means it is good for the housing market in general, not just developers.'

Homeowner Edward Ti, 28, said he would certainly take up a 50-year loan for an investment property. 'I would take a 50-year loan if interest rates are low. I would think that it is more efficient to use the money saved from the monthly mortgages to do something else.'

If a borrower takes out a 50-year loan for $1 million at an interest rate of 1.7 per cent, he would have to pay about $2,475 monthly for his mortgage, compared with $3,548 if the loan ran for 30 years.

This is assuming a period of low interest rates. However, if interest rates rose, say to 3 per cent, the $1 million 50-year loan would mean monthly repayments of $3,220.

| More

Resale prices of public housing in Singapore fall in Q2: HDB

Resale prices of public housing in Singapore fall in Q2: HDB

The Business Times - 25 Jul 2014

RESALE prices of public housing in Singapore fell 1.4 per cent in the second quarter compared to the preceding quarter, final resale price index released by the HDB showed on Friday.


Private home prices in Singapore continue to fall in Q2: URA

Private home prices in Singapore continue to fall in Q2: URA

The Business Times - 25 Jul 2014

URBAN Redevelopment Authority's official private home price index fell one per cent in the second quarter of this year compared with the first quarter.


Sharp rise in private home purchases in Q2

Sharp rise in private home purchases in Q2

The Business Times - 24 Jul 2014

Number of resale units up 41%; new sales by developers jumped 36.8%

View articles from these categories

X

Property v stocks - it's a matter of timeframe

The Straits Times - July 9, 2012

By: MELISSA TAN