Potential owners can take up the loan from either
HDB directly, or from FIs who offer housing loan facilities. Each
option has its own policies. For purchasers who are taking a
loan directly from HDB, the salient points are as
follows:
1) The purchase price can be fully paid by CPF
funds, less the initial option deposit.
2) HDB’s current concessionary interest
rate (also known as subsidized rate) is at 2.6%. However,
it is subject to HDB varying the rate from time to time. It is good
to know that HDB does not vary their interest rates as rapidly as
the FIs.
3) The downside however, is that each illegible
person can only utilize this benefit 2 times in his or her
lifetime, be it for a direct purchase from HDB or from the
secondary market.
For purchasers who do not qualify for
the HDB concessionary rate, or who opt for a loan from the
FIs, they are subjected to the
following:
1) Only up to 90% can be financed, so the difference
between the purchase price of the property and the loan will have
to come from private funds. This portion however, can be a
combination of cash and CPF savings, e.g. first 5% has to be in
cash, while the balance from CPF. It is a statutory requirement for
all purchasers to furnish the initial 5% in cash.
2) FIs who grant loans have both Fixed Interest Rate
and Variable Interest Rate packages. These loans are based on
commercial interest rates depending on their cost of funds at that
particular time. These rates may or may not be as competitive as
compared to HDB’s concessionary rates. Commercial rates may
fluctuate frequently, therefore it is prudent for borrowers to keep
abreast of the market movement and interest rates at all
times.
**FIs have their
own credit assessment guidelines which may not conform to that of
HDB.