If you are looking for a personal, advantageous loan, there are many factors to consider. It is important to make sure that you find a suitable personal loan for you and that you are aware of interest rates, repayment terms, and charges.
We can suggest the best choice to choose from. It comes from Post Office Saving Banks, also known as POSB. This Singaporean bank provides consumer banking services and is the oldest bank in full operation in Singapore.
POSB is known among many people as one of the market leaders when it comes to advantageous interest rates. In fact, it might serve as an interesting option just because it comes with lower rates than the typical HDB loan.
If you are looking to buy a new home, let’s have a look at the benefits of the POSB HDB loan to determine if it is a great option for you.
Benefits of the POSB HDB Loan
The POSB HDB loan comes with numerous advantages. Before getting into this, it is important to point out that there are two HDB loans.
There is the HDB BTO under construction, floating with no lock-in. Also, there is the HDB flat (resale or built BTO) with a 5-year fixed rate or 2-year fixed rate, and floating with no lock-in or floating with 1-year lock-in.
Therefore, the main difference is whether the property is completed or it is a BUC (building under construction). For buildings under construction, the only loan available comes with no lock-in and a floating rate.
The POSB HDB loan comes with up to 75% of the purchase price of your property or the market value, depending on which one is lower. The rest of the 25% needs to be a down payment.
Additionally, you will enjoy six months of free protection of sudden loss of income. Plus, you can earn $175 interest if you have both a POSB home loan and a multiplier account. Thus, a POSB HDB loan comes with great advantages compared to the HDB loan.
The main benefit of the POSB HDB loan over the HDB concessionary loan is that the latter has an interest rate of 2.6% per annum, with a prevailing CPF rate of 2.5% + 0.1% per annum. The POSB HDB loan comes with a significantly lower interest rate.
On the other hand, POSB only finances 75% of your home purchase price, as compared to 90% with the HDB loan. Lastly, the HDB concessionary loan does not require any cash payment and has only a 10% CPF requirement.
If you are looking for the best rate for your home loan, POSB remains a leader in Singapore. This is great news if you are trying to buy a home at a competitive price. POSB also offers some interesting rewards if you go for the POSB cashback bonus or the multiplier account.
These two options come with an increased interest rate on your savings. If you credit your salary into the POSB bank account, you can earn cashback. Thus, POSB comes with extra perks if you decide to take out the HDB loan for your new home.
Fees and Rates
If you want to buy your HDB flat, the POSB HDB loan comes with a 1.80% interest rate per annum. There are no other fees and rates, but keep in mind that you need to make a 25% down payment when you purchase it, with a minimum of 5% cash payment and 20% CPF.
How to Apply
It's important to note that the application will only take you a few minutes to complete. If you are a Singaporean citizen, you need the following documents.
- NRIC
- HDB flat and financial information
- Option to Purchase/Sales and Purchase agreement
- Valuation report
You can click here for a full breakdown of the required documentation and clear steps on how to download the documents.
Contact Information
If you have any more concerns about the HDB loan from POSB, here's where you can get in touch with them.
POSB - Main Office: POSB Toa Payoh Central Branch, 480 Toa Payoh Lorong 6, House & Development Board, Hdb Hub, Singapore, 310480
POSB contact number: 00 65 6339 6666
Note: There are risks involved when applying for and using credit. Consult the bank’s terms and conditions page for more information.
