Wednesday, December 23, 2015

Rude Shock - DBS increased Fixed Deposit Rates

Woke up to a rude shock today....DBS bank has increased the fixed deposit rates! The US federal government increased their interest rates on 16 December 2015 and after 7 calendar days, DBS bank follows suit. Within 2 months of repricing my home loan at a repricing fee of $500, my home loan has increased.

Previous loan if i had carried on = 0.96%(1 month sibor) + 1% spread=1.96%
Current loan = 1.1% spread + 0.675%  average of 12 and 24 months ( in red box)= 1.775%
Total interest savings for first three years = $3700
Net savings after including repricing fee = $3200.

Still quite ok savings given that there is stability and i have no lock in for any of these 3 years, without the need to take a mortgage insurance.

Recently, DBS changed their FHR from the average of 12 and 24 months to one that is based on the 18 months one(FHR 18), with a higher spread, a lock in period and the need to take a mortgage insurance.
It seems they are trying to narrow the difference in total interest between current customers with new ones(FHR 18). Furthermore, who really keeps a fixed deposit for 24 months with DBS, so i guess raising the 24 months rate by a large amount increases their net interest margin between  what they charge for home loans and what they charge for bank fixed deposits. Interesting space to watch.


  1. how u get 1.1% spread from DBS. I recently apply DBS loan with 1.48 + FHR(12&24). I have not start for the 1st month payment, but the FHR already hike so much! now is like 2.155%

  2. I did it in Aug 2015..just in the nick of time

  3. I did mine in Dec 2014 and the spread was 0.8%


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