Formed in 1932, OCBC is the second largest bank in Southeast Asia by assets today. While no one in Singapore needs an introduction to the bank, it’s safe to say that OCBC has also made its mark globally. OCBC has consistently ranked amongst the top 50 Safest Banks in the world by Global Financial Magazine and was recently named the Best Managed bank during COVID-19 by the Asian Banker.
On 16 June 2022, the US Fed raised interest rates by 75 basis points, the largest rate hike since 1994. In the upcoming meeting, it is likely another 75-basis point or 50-basis point move will occur. In response to rising interest rates, major banks in Singapore, including OCBC, raised its interest rates.
In this article, we’ll take a look at the home loan packages offered by OCBC for both HDB and private property owners. This includes packages under fixed rates and floating rates.
Disclaimer: The packages mentioned in this article are correct at the time of writing [1 July 2022] and are meant as a guide only. The interest rates are subject to change, and you should compare the latest home loan rates and packages on PropertyGuru Finance before applying for a new home loan.
OCBC Home Loan Summary
| OCBC Home Loan Summary | Type of home loan |
| BUC Home Loans | OCBC No Lock (1M or 3M SORA) Floating Rate BUC Package |
| Floating Rate Home Loans | OCBC 2-Year (1M or 3M SORA) Floating Rate Package |
| Fixed Rate Home Loans | OCBC 2-Year Fixed Rate Package |
For all of OCBC’s home loan packages, there is a minimum loan sum requirement of $200,000 for HDB flats and $300,000 for private properties.
OCBC Fixed Rate Home Loan Packages
On its fixed rate home loan, OCBC allows homeowners to lock in their mortgage repayments for two years. Current fixed rates for OCBC (as of 1 July 2022):
| Year | OCBC 2-Year Fixed Rate Package |
| Year 1 | 2.65% |
| Year 2 | 2.65% |
| Year 3 | 1M SORA + 1.20% |
| Thereafter | 1M SORA + 1.60% |
The 2-year package comes with one free package conversion (for new loans only). Fixed rates protect you from rate fluctuations for a period of time. For the benefit of having this certainty in your monthly mortgage repayments, you typically would have to fork out a slightly higher interest rate compared to floating rate packages.
For the OCBC package, after the fixed rate period, the mortgage rate is pegged to the Singapore Overnight Rate Average (SORA). The SORA is the “volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8am and 6.15pm”.
Fixed mortgage rates across local banks in Singapore have been increasing. According to Paul Wee, Managing Director of FinTech, PropertyGuru Group, it will not be surprising for the bank to withdraw the current 2.65% two-year fixed-rate loan package soon and replace it with fixed-rate packages with higher rates.
“Many banks in Singapore have withdrawn fixed packages given the steadily rising interest rates. We expect banks to continue monitoring these packages closely and replace them with fixed-rate packages with higher rates, as and when there are significant movements in the reference rates. The likelihood of banks withdrawing fixed-rate packages altogether also increases significantly when interest rates become too volatile.”
OCBC Floating Rate Home Loan Packages
At the moment, OCBC offers 2-year floating rate home loan packages, pegged to the SORA. According to the PropertyGuru Mortgage Comparison tool and the OCBC website, current floating rates packages for OCBC (as of 1 July 2022) are:
| Year | OCBC 2-Year 1M SORA Floating Rate Package | OCBC 2-Year 3M SORA Floating Rate Package |
| Year 1 | 1M SORA + 0.98% | 3M SORA + 0.90% |
| Year 2 | 1M SORA + 0.98% | 3M SORA + 0.90% |
| Thereafter | 1M SORA + 1.00% | 3M SORA + 1.00% |
Both loans, offer partial pre-payment options and a free package conversion (new loans only).
As its name suggests, floating rates fluctuate according to their reference rates. This means that when the reference rates increase or decrease, homeowners would see their mortgage repayments moving accordingly. This is unlike those who choose fixed rate packages – who are sheltered from interest rate increases but also do not enjoy any possibility for lower rates (during the lock-in period).
Regarding floating-rate packages, Paul mentions: “Based on expectations of the 3-month-compounded SORA rates hitting 2.50% and assuming a fixed spread of 0.8% (which is determined by the banks), we can potentially be looking at a net rate of 3.3% for floating-rate packages in the next few months.”
OCBC BUC Home Loans (For Residential Properties under Construction)
For under-construction properties, you can choose a BUC home loan pegged to the 1-month or 3-month SORA. Current rates (as of 1 July 2022):
| Year | OCBC 1M SORA BUC Package Interest Rate | OCBC 1M SORA BUC Package Interest Rate |
| Year 1 | 1M SORA + 0.90% | 3M SORA + 0.90% |
| Year 2 | 1M SORA + 0.90% | 3M SORA + 0.90% |
| Thereafter | 1M SORA + 0.90% | 3M SORA + 0.90% |
For both the 1M and 3M SORA BUC packages, the spread is + 0.90% throughout.
Both BUC packages apply to HDB and private properties and have no lock-in period. They also come with perks such as allowing partial prepayment, waiver due to sales, and one free package conversion.
OCBC Home Loan Review: Should You Consider It?
Other than the interest rates of the loan packages, there are other factors that should be taken into consideration before taking up your home loan. Here are some of the attractive considerations when taking up an OCBC home loan.
Free Conversion
Free conversions are always welcome, especially during uncertain times when interest rates are fluctuating. Many OCBC packages currently offer this perk for new loans only.
Prepayment Of Up To 50% Of Loan Amount During the Lock-In Period
For both of its floating rate packages, there is no prepayment penalty for up to 50% of the loan amount in the first two years. The offered flexibility allows homeowners and/or investors looking to take advantage of the competitive interest rates as a cheap funding source or having a need to sell off their properties during the lock-in period.
Reputable Bank in Singapore
As mentioned at the start of this article, OCBC is a world-famous bank with many accolades to its name and a 90-year track record. If the reputation of the bank matters to you and/or if you have a personal preference for a local lender, OCBC is definitely worth considering.
You can review the details of OCBC’s various home loan packages on PropertyGuru Finance, as well as compare rates from major banks in Singapore to enjoy the best home loan rates.
Thinking of getting a bank home loan? Compare the best mortgage rates on PropertyGuru Finance, or contact us for more personalised advice and recommendations:
Disclaimer: Information provided on this website is general in nature and does not constitute financial advice.
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