THE surge in home sales is prompting two lenders to try new marketing approaches to snare a share of the fiercely competitive mortgage market.
Tried-and-tested strategies like launching more innovative mortgage products and offering better interest rates are now standard procedures.
But some lenders are also trying more radical ways to lure borrowers - like product giveaways, snazzy marketing and that extra bit of service.
'Banks can cut rates only up to a certain level. They have to come up with more innovative ways to attract customers,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
Standard Chartered and Hong Leong Finance (HLF) are both looking for an edge with new products and approaches.
StanChart has just launched its Approval-in-Principle service initiative aimed at people in property showrooms. Potential buyers will be able to obtain in-principle approval, including advice on loan size and tenor, in just 15 minutes. All they have to do is to provide the bank official with some basic information, including their monthly income and financial commitments.
As these numbers are 'self-declared', the loan is approved only after the necessary documentation is presented and checks are done.
The StanChart service will be on offer this weekend at Far East Organization's Mi Casa showflat, a condominium development in Choa Chu Kang town centre.
'Banking is about service,' StanChart's general manager for wealth management Dennis Khoo told The Straits Times. He said the service will give customers peace of mind knowing how much they can borrow.
'If I know with a good level of certainty that my loan would be approved, I can go ahead to issue the cheque deposit for my option to purchase,' he added.
IT professional Calvin Chin, who is considering buying a property, called StanChart's new service a convenience, but observed that 'for a bank to be at the showroom, it looks like the start of a home-loan marketing war'.
StanChart has also launched Mortgage Protector, a bundle comprising a two- year fixed-rate package at a 2.4 per cent interest rate, with an insurance plan that provides total coverage for the entire loan amount from the onset.
Customers who sign up will get a Visa Platinum Card with a three-year waiver of annual fees and $50 cash back.
HLF has taken another route by becoming the first finance company here to collaborate with Singapore Airlines. If a person takes a $200,000 loan with HLF, for instance, he can get either 3,000 KrisFlyer miles or $200 worth of food and beverage vouchers. A higher loan value means more air miles or more vouchers.
'We want to extend an extra-special treat to our customers to help celebrate the excitement of a property purchase,' said HLF president Ian Macdonald.
Bank officers at rival lenders advise people not to be swayed by marketing ploys but to look at factors such as how the rates are determined, the type of flexibility available to make repayments and the commitment period.
OCBC Bank's head of consumer secured lending, Mr Gregory Chan, said: 'While best pricing and marketing gimmicks support a promotional drive, consumers in our matured market are discerning and most will select a bank based on a combination of appropriate package and engagement experience.'
Mr Leong Sze Hian, president of the Society of Financial Service Professionals, recalled that decades ago, banks frequently dangled treats when consumers signed up for home loans.
But the practice died out after the banks took much flak from industry participants as these giveaways influenced consumers to base their decisions 'on freebies rather than choosing a home loan based on the merits of the loan'.
Source: Straits Times, 16 Oct 2009
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