Revision of home loan interest rate
Dear OCBC Customers
Please refer to the guide below for queries you may have on the interest rate increase on your property loan with effect from 7 October 2022, Friday.
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Why is OCBC increasing my loan interest rate?
Mortgage Board Rate (MBR) is a Bank managed rate. This means that the benchmark or reference rate is determined by the bank and is subject to change.
The value of the benchmark on your account is dependent on prevailing market conditions and the cost of funding the loan.
Market interest rates have been increasing and consequently, our cost to fund home loans have increased. As a reference to increases in market interest rates, there was a 1.69% increase in 1M Compounded SORA and 1.42% increase in 3M Compounded SORA from January this year. -
Would interest rate increase any further?
We are unable to comment on the future value of market interest rates. We will continue to monitor the market environment and give due consideration to all factors before making any interest rate revisions. We will inform you of any mortgage rate change 30 days in advance.
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Why did OCBC change the name of my reference rate?
The new name indicates the change in the account interest rate. The name change is to refine the naming convention within our portfolio of accounts and to allow us to serve you more efficiently should you need assistance. -
What is my new interest rate and monthly instalment amount?
You will receive an interest rate change advice dated 7 October 2022 when the interest rate on your loan account is adjusted. The exact amount of your new monthly instalment is not known yet as instalment from now and any prepayments before 7 October 2022 have not occurred.
Assuming your loan has an all-in interest rate of 2.0% currently, for every $100,000 loan on a 20 to 30 years tenure loan, the estimated impact on your monthly instalment amount is as follows:- 0.20% increase in all-in interest rates increases instalment by around $10
- 0.40% increase in all-in interest rates increases instalment by around $20
- 0.60% increase in all-in interest rates increases instalment by around $30
- 0.80% increase in all-in interest rates increases instalment by around $40
- 1.00% increase in all-in interest rates increases instalment by around $50
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When would my monthly instalment increase?
You will start paying the higher monthly instalment from 1 December 2022 for Private Property loans and 15 November 2022 for HDB Property loans.
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How can I change the amount of CPF contribution to my monthly instalment?
Your CPF contribution amount is automatically adjusted if you own a HDB property. If you own a private property, please follow these steps:
- Visit https://www.cpf.gov.sg/members and login using your SingPass
- Click on "Home Ownership Dashboard" at the bottom of the page
- Choose the applicable property
- Click on "Change amount" and key in the new CPF contribution amount
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Can I change my pricing package? What are the fees and charges involved if I do so?
You can change the pricing package without any fee in view of this rate increase exercise. The prepayment fee of 1.50% of your loan amount will be waived if your loan is within the lock-in period, and no administrative fee will be charged.
If you wish to change the pricing package, please submit a repricing application.
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Can I make a repayment to my loan to reduce the loan amount?
You are free to make a full or partial repayment to your loan if it is outside of the lock-in period. The minimum partial repayment amount is S$5,000. However, if you make the repayment during the lock-in period, a prepayment fee of 1.50% of the amount repaid may apply. Please refer to your current Letter of Offer/Supplemental Letter of Offer to find out more.
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What must I do to make a partial or full repayment? Is there a form to complete?
You will need to provide 1-month advance notice for partial prepayment and 2-month advance notice for full repayment.
Please submit your repayment form to us as per the stipulated timeline.