If you've already picked out a suitable home loan, PropertyGuru's Mortgage Experts can help you apply for it. If you haven't yet got a clue which home loan to choose, there are two main types of mortgage packages: fixed rate and floating rate.
Types of bank loans: fixed vs floating rate packages
For fixed rate home loans, your instalments will remain the same until the end of the fixed rate period, which could range between one to five years, depending on the home loan package you choose. Once the fixed interest rate time frame is complete, it will change to a (usually more expensive) floating interest rate. At this point, you should explore refinancing options which may help you enjoy more savings.
Floating rate packages are those with rates (and hence, monthly instalments) that fluctuate during the loan tenure. Usually, it is pegged to another index: it could be benchmarked against a published rate like the Singapore Interbank Offered Rate (SIBOR), or another one of the banks' other products, like fixed deposit or board rates.
Theoretically, it's beneficial to choose fixed rates when interest rates are rising and choose floating rates when the interest rate environment is flat or declining, but these things are hard to predict. The most suitable home loan for you depends largely on factors like your personal preference, risk appetite and financial situation. For customised recommendations and more guidance, speak to our Mortgage Experts.
