Guide to negotiating for a lower home loan rate in Singapore

Feature image of a woman holding onto a miniature house in the palm of her hands, symbolising home loan in Singapore

Guide to negotiating for a lower home loan rate in Singapore

It might seem easy to find the best home loan rates in Singapore – just go to the various banks, ask, gather the details, and compare. Or you might prefer checking comparison websites. 

In either case, you are unlikely to get the best deal. Why? Because most banks do not state their best rates upfront. 

And with the home loan market being so competitive, it can be tough to distinguish between the loans offered – especially since there aren’t many differences between packages other than the interest rate. 

In this article, we look at some ways you can potentially get the best deal in the market.

1. Apply for a mortgage together with your family members

Is any of your family members looking to refinance or apply for a new mortgage? 

If yes, you might be able to secure a very beneficial package when you apply for your mortgage with the same bank. Think of it as a referral/bundle sort of deal.

Family members getting mortgages from the same bank increases the likelihood that more products – i.e. insurance, investments, credit cards, etc – may be taken up by the members of the same family, increasing loyalty to the bank. 

Image of a married couple upgrading themselves to priority banking status with their local bank

2. Upgrade yourself to a priority client

If you have some money lying around, it’s time to put it to good use. Open an account with the bank and obtain that priority client status!

Having priority banking status with a bank may allow you to obtain a lower mortgage rate than what is publicly available.

To qualify for priority banking, there are a few requirements. In general, you’ll need to have:

  • cash deposits ranging from S$200,000 to S$250,000
  • an annual income exceeding S$120,000 
  • investment products exceeding S$150,000

However, criteria may differ from bank to bank.

As a priority client, you may qualify for some discount on your home loan rate. 

For example, a 0.10% discount in annual interest savings on a 1 million-dollar loan is equivalent to roughly S$1,000, with a loan tenure of 30 years, you will have saved close to S$30,000 in your pocket instead of the bank.

3. Prove that you are a reliable borrower

When it comes to home loans, it’s rather risky for banks to disburse millions of dollars. As such, the higher the amount, the stricter the governance and auditing requirements become, in order to secure low-risk customers. 

By proving that you are a reliable borrower, you are likely to get the required loan quantum. 

During the loan application, the bank will review your credit report, which shows the bank your credit card and loan repayments records – if any. In general, show your credibility as a responsible borrower and establish trust with the bank you want to borrow from.

Image of a home loan advisor advising a married couple on their mortgage rates.

4. Consult a home financing advisor for the best mortgage rates in Singapore

If you’re looking for the best home loan rates, you may want to consider getting the help of a mortgage specialist.

Many have the misconception that these advisors’ expertise comes at a price, however, this is hardly the case. 

In fact, home loan advisors, or mortgage brokers, at FinanceGuru do not charge any fees. And in comparison to an average home loan borrower, our home loan specialists can drive a harder bargain with the banks. 

Besides knowing the bankers, we also provide dozens of home loan applications to the banks, so we have more leverage to negotiate the best interest rates for you.

Here are some areas where a mortgage broker might have an edge over, say you getting your own home loan:

  • We have a stronger relationship with banks
    Banks typically have a closer relationship with mortgage brokers than the general public. 

    Some of our mortgage specialists are also former bankers and loans specialists with years of experience in the industry.

    So as providers and consumers – with experience working both sides of the coin – we understand the pain points and concerns when it comes to making financial decisions.
  • We have a high volume of business with banks to strike favourable deals
    In general, mortgage brokers are sometimes able to request preferential rates that are not advertised by banks in Singapore due to the volume of business that they have already generated for the bank.
  • We are in the know
    You probably don’t know this – but banks are often competing to offer the most attractive interest rates on a monthly or quarterly basis to gain market share. 

    An experienced mortgage broker knows when these exclusive rates are offered and by which banks. Partnering with the major banks and financial institutions in Singapore, we can compare home loan rates across the board to ensure you get the right deal.

Read more about how mortgage broker works here 

Apart from free, non-obligatory consultations, our mortgage services are totally free of charge. You don’t have to pay for our services – so leave it to us to get you the best housing loan rates in Singapore!

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Contact us for a chat today.

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