View Full Version : OMG DBS/POSB new HDB loan is TOO GOOD TO BE TRUE
phantom_opera
02-04-13, 15:47
DBS Bank has launched the first-of-its-kind HDB home loan called POSB HDB Loan - a new mortgage option for flat buyers, reported AsiaOne.
It offers a floating interest rate capped below the housing board’s concessionary rates for ten years. The HDB concessionary interest rate is pegged at 0.1 percentage point above the prevailing CPF interest rate.
The POSB HDB Loan is also expected to benefit from current low interest rates and will form part of DBS' key mortgage offering. Moreover, home buyers taking up the loan will enjoy zero fees for early repayment or sale of property.
POSB is also offering a legal fee subsidy of $1,800 for HDB owners to refinance (with a minimum outstanding loan of $100,000).
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would other banks follow?? SPRs without HDB now can chiong to buy??
:beats-me-man:
phantom_opera
02-04-13, 16:04
an analysis here
http://sg.finance.yahoo.com/news/posb-hdb-loan-big-deal-160000260.html
this is indeed a good deal, quite surprised
Allthepies
02-04-13, 16:44
It says something about interest rate, the bank is confident for the next 10years.
Huat ah!
phantom_opera
02-04-13, 16:52
It says something about interest rate, the bank is confident for the next 10years.
Huat ah!
exactly, they are so daring that they take the risk of cap at 2.5% for 10y ... aiyoyo ... they trust Bernanke and Abe to the max
and I am sure when refinance, they will revalue up and allow u to extract more "juice" from HDB :rolleyes:
Wouldn't be surprised if some bank comes out with a variant of this for private home loans
[QUOTE=phantom_opera]exactly, they are so daring that they take the risk of cap at 2.5% for 10y ... aiyoyo ... they trust Bernanke and Abe to the max
and I am sure when refinance, they will revalue up and allow u to extract more "juice" from HDB :rolleyes:[ /QUOTE]
This is still `higher' than the pathetic bond rates they are offering... andthey try to take some market share away from the other banks
So DBS is betting that SIBOR is unlikely to rise much to make total interest rate > 2.5% within next 10 years? :eek:
DBS Bank has launched the first-of-its-kind HDB home loan called POSB HDB Loan - a new mortgage option for flat buyers, reported AsiaOne.
It offers a floating interest rate capped below the housing board’s concessionary rates for ten years. The HDB concessionary interest rate is pegged at 0.1 percentage point above the prevailing CPF interest rate.
The POSB HDB Loan is also expected to benefit from current low interest rates and will form part of DBS' key mortgage offering. Moreover, home buyers taking up the loan will enjoy zero fees for early repayment or sale of property.
POSB is also offering a legal fee subsidy of $1,800 for HDB owners to refinance (with a minimum outstanding loan of $100,000).
=========================
would other banks follow?? SPRs without HDB now can chiong to buy??
:beats-me-man:
phantom_opera
02-04-13, 22:15
So DBS is betting that SIBOR is unlikely to rise much to make total interest rate > 2.5% within next 10 years? :eek:
in that case, it is going to be disaster for savings and CPF OA
wait till you see a new promo.. 1% spread throughout
It is already a disaster for savings anyway.
CPF OA supposed to peg to 10-years bond rate but luckily still didn't implement right? Otherwise CPF OA only 1+% only?!
in that case, it is going to be disaster for savings and CPF OA
Read this on the news page:
"POSB is also offering a legal fee subsidy of $1,800 for HDB owners to refinance (with a minimum outstanding loan of $100,000)."
I thought Bank not allow to subsidy legal?
Spread of 1.38%. About 0.5% more.
It is already a disaster for savings anyway.
CPF OA supposed to peg to 10-years bond rate but luckily still didn't implement right? Otherwise CPF OA only 1+% only?!
Ya lucky didnt implement.
Thats why now I keep as much money in OA as I can ...
Use cash to pay instalments.
Gahmen angpow sometimes have to grab it yourself one, not everytime they dish out into your rice bowl.
DKSG
Ya lucky didnt implement.
Thats why now I keep as much money in OA as I can ...
Use cash to pay instalments.
Gahmen angpow sometimes have to grab it yourself one, not everytime they dish out into your rice bowl.
DKSG
I have been advocating using cash to pay installments before.
I got shot down by forum members for this view in the past as it seems many/most people are trying to use as much cpf as poss to pay for installments.
:doh:
If you use cash to pay for your installments, at least you don't have to pay back all the accrued interest plus principal when you sell the place. Therefore you will have more CASH to pay towards your next property.
Don't assume that in the future, all your monies returned to CPF can be used for the next property as the Govt may further tighten the rules on how much can be used from CPF.
At least if you get the proceeds in cash, the Govt cannot force you to stash it back into CPF.
makes sense. But to have so much $ in OA is like can see but cannot touch. How to grow the OA leh?
makes sense. But to have so much $ in OA is like can see but cannot touch. How to grow the OA leh?
You can invest in high dividend stocks and REITs. Or managed funds. All of these have risks compared to leaving it in the OA. However as mentioned, no risk no gain.
REITs and managed funds are just big NO NO to me! You will just get skinned! :banghead:
You can invest in high dividend stocks and REITs. Or managed funds. All of these have risks compared to leaving it in the OA. However as mentioned, no risk no gain.
http://static8.businessinsider.com/image/4e5805196bb3f7bf7600000f/bernanke-qe.jpg
Long Long time ago, Banker was train to loan money when there are deposit. Then there was this Ang Mo call Ben tell them they don't have to wait for deposit to loan out money, they just need to key into their computer system.
Huat Ah.....
REITs and managed funds are just big NO NO to me! You will just get skinned! :banghead:
Certain managed funds can even beat the returns on CPF-SA. But your entry and exit timing has to be good. My partner had bought the Franklin Templeton Global Balanced Fund during one of the financial crises when the vendors were ploughing the streets to try and sell the fund. Made a hefty profit and sold the fund a few years later. When everyone is shunning the product, that's when to consider buying. For myself, I have even made good profit from an ILP (insurance linked product) on my CPF-SA which exceeded my sum assured.
Don't be too quick to bash managed funds. They can still be part of your portfolio.
Certain managed funds can even beat the returns on CPF-SA. But your entry and exit timing has to be good. My partner had bought the Franklin TemplGlobal Balanced Fund during one of the financial crises when the vendors were ploughing the streets to try and sell the fund. Made a hefty profit and sold the fund a few years later. When everyone is shunning the product, that's when to consider buying. For myself, I have even made good profit from an ILP (insurance linked product) on my CPF-SA which exceeded my sum assured.
Don't be too quick to bash managed funds. They can still be part of your portfolio.
of course if you enter and exit at the right time. if everyone does that, then will be zero return for all. I can only say that you are lucky. funds are the worst investment tool. e.g. unit trusts, ILps, all are money suckers, the guranteed winner are the fund managers.
all in all, i think POSB is real shrewd and gung-ho in going after HDB's pie. if interest rates are expected to remain depressed in the next 5-6 years, they would have won given that the current rates are largely 1.5% or less
of course if you enter and exit at the right time. if everyone does that, then will be zero return for all. I can only say that you are lucky. funds are the worst investment tool. e.g. unit trusts, ILps, all are money suckers, the guranteed winner are the fund managers.
Well they have to make a living too.
At the time, we were younger and more gung-ho. Looking for allowable investments in the CPF-SA that could beat the 4% interest rate. There are not many choices there.
When we made money, we took the profit and ran.
Funds, ILPs can be part of a diversified portfolio.
I am not in the financial line, so am not promoting these products.
Just that they were not as "terrible" as what people make them out to be. They can still deliver returns. But caveat emptor. You go in with eyes wide open.
At this point in time, the 2.5%/4% interest of CPF looks safer and more attractive, thus I am cutting the payments out of CPF for my property and prefer to leave it in CPF to get the interest.
At least when I sell my property, I can take out the balance in cash and not have to return it to CPF. I may not necessarily wish to buy property again so having the sale proceeds in cash is more flexible. I can do what I want with the cash rather than bound by the CPF regulations.
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