(SINGAPORE) HSBC has offered a new home loan that pegs interest rate to the three-month Singapore Interbank Offered Rate (Sibor), plus a spread of one percentage point.
The rate will be applied throughout the loan tenor and is valid for both completed and uncompleted properties with a loan size of at least $300,000.
There is no lock-in period, which is how long you would otherwise be tied to the bank and which allows it to penalise you if you decide to redeem your loan early.
HSBC's new loan offering comes as interbank rates are expected to remain tepid in the short term, especially as a speedy economic recovery is not on the horizon.
In comparison with the bank's current Sibor- pegged 'loyalty' home loan package - which charges spreads of 1.3 points for the first year, 1.2 points for the second year and 1.1 points subsequently - this new home loan could save about 7 per cent in interest payments for a loan size of $600,000 over 20 years.
The calculation assumes Sibor to be at 0.686 per cent as at Aug 3.
The new home loan is available to all existing HSBC customers who have an account, credit card or investment with the bank, and is part of the bank's 'relationship-based home loan' programme.
No minimum balance requirement is required for the offer. Current HSBC home loan customers can also apply for the new home loan package if they wish to review their loan.
Customers who have no account with HSBC can apply for this new home loan after they deposit at least $50,000 in deposits, investments or insurance with the bank.
HSBC's new home loan offer is available until the end of next month.
Source: Business Times, 18 Aug 2009
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