There are different ways of achieving lower monthly repayments. You can switch to another loan type, such as from a fixed-rate loan to a floating-rate one. Alternatively, you can consider extending the tenor of your loan. However, bear in mind that while your monthly repayment would go down if you were to extend your loan tenor, you will end up paying more in interest expenses over the duration of the loan.
When you reduce the interest rates on your existing loan, you also reduce the interest component and increase the principal component of your monthly instalments. Thus, you will pay down your loan principal over a shorter tenor.
On the same note, if you would like to shorten your repayment schedule by reducing your loan tenor and can afford the increase in monthly instalments you could save a significant amount of money by reducing the interest that you will pay over the full duration of the loan. Although this may mean higher monthly repayments, you will own your home faster and be free of mortgage debt sooner.
With property appreciation, your residential or commercial property is likely to be worth more now than when you first took up your original loan. Tap into the appreciated value of your property to do great things – expand your business, have a home makeover or go on a luxury vacation.
SORA (Singapore Overnight Rate Average) has been selected as the new interest rate benchmark in Singapore.
Illustration of 3-Month Compounded SORA
The 3-Month Compounded SORA is updated every 3 months.
D% and E% are 3-Month Compounded* SORA published by MAS on 4 Mar 2021 and 4 Jun 2021 respectively.
*Further reading material on use of SORA in financial contracts:
Welcome to the new UOB 3-Month compounded SORA Home Loan package that gives you better control of your finances.
|UOB 3-Month Compounded SORA Home Loan|
|Year 1||3M Compounded SORA + 1.25% p.a.|
|Year 2||3M Compounded SORA + 1.25% p.a.|
|Thereafter||3M Compounded SORA + 1.40% p.a.|
|Lock in Period||1 year|
|Partial Prepayment during lock-in||Flexibility to prepay. T&Cs apply.|
|Rate Refresh||Every 3 months|
|Free Conversion||1 free conversion after lock in|
|Legal subsidy||For refinancing only, 0.4% of loan amount capped at $1,800, subject to 3 year clawback.|
Submit your loan application online now and our banker will be in touch with you to share more about the 3-Month compounded SORA Home Loan package.
Depending on the terms of your existing mortgage, you may face prepayment penalties or subsidy clawbacks when you refinance. It usually makes financial sense to refinance if you can get interest rates that is lower than the rate you are currently paying.
You may wish to consider the following issues to determine if it is the right time to refinance your home loan:
NEW! Switch and save easily with our instant Home Loan approval1.
For Singaporeans and PRs:
Click on "APPLY NOW" to apply for a new UOB Home Loan with forms pre-filled by retrieving your personal information with MyInfo. Applications submitted between 8.30am to 9pm daily will be processed instantly. Applications received outside these times will be processed the next working day.
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1Instant approval refers to a conditional approval for a UOB Property Loan, and is granted based on the information provided by the applicant. It is processed and approved by UOB, and is subject to the applicable terms and conditions, including the necessary documentation verification and completion.
This publication is strictly for information purposes only and shall not be transmitted, disclosed, copied or relied upon by any person for whatever purpose. This publication is not an offer, recommendation, solicitation or advice to buy or sell any investment product. Nothing in this document constitutes accounting, legal, regulatory, tax, financial or other advice. You should consult your own professional advisors about issues discussed herein. While the information provided in this publication is believed to be accurate as at the date of publishing, UOB makes no representation or warranty, and accepts no responsibility or liability for its completeness or accuracy.