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 Refinancing Housing Loan, Seeking advice

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TSAssclown
post Nov 29 2022, 03:22 PM, updated 2y ago

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Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
SheepGeeks
post Nov 29 2022, 03:24 PM

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Ask few banks for rates before committing.
MUM
post Nov 29 2022, 03:30 PM

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QUOTE(Assclown @ Nov 29 2022, 03:22 PM)
Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
*
has this repayment rate of 930 been constant since the beginning of your loan?
last few years, the interest rate for your loan "should" have reduced too as OPR had reduced.
if your repayment of 930 had been constant, then your actual loan balance "should" have reduced as you had been payment more since that interest charged had been lesser.

check with your OCBC of the current actual interest rate for housing loan?
redapple90
post Nov 29 2022, 03:33 PM

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If you need to cash out, its better to refinance, as the current interest rate is about 4%+- depending on your portfolio. As your outstanding balance is not alot, best advise is to stay put.
teslaman
post Nov 29 2022, 03:37 PM

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QUOTE(Assclown @ Nov 29 2022, 03:22 PM)
Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
*
the costs will eat up your interest savings

better you pay more upfront on principal amount.
Autocountstick
post Nov 29 2022, 03:39 PM

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i also OCBC one of the property, abit high. you need to survey other bank, absolute you can get low rate but need to pay stamp/legal fees, you need to calculate how much saving.
TSAssclown
post Nov 29 2022, 04:50 PM

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QUOTE(MUM @ Nov 29 2022, 03:30 PM)
has this repayment rate of 930 been constant since the beginning of your loan?
last few years, the interest rate for your loan "should" have reduced too as OPR had reduced.
if your repayment of 930 had been constant, then your actual loan balance "should" have reduced as you had been payment more since that interest charged had been lesser.

check with your OCBC of the current actual interest rate for housing loan?
*
Yes, the payment has been constant and the current actual interest rate is 4.95%
daniellehu
post Nov 29 2022, 08:33 PM

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QUOTE(Assclown @ Nov 29 2022, 03:22 PM)
Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
*
Check out HSBC latest offering with free legal fee.
TSAssclown
post Nov 29 2022, 08:38 PM

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QUOTE(daniellehu @ Nov 29 2022, 08:33 PM)
Check out HSBC latest offering with free legal fee.
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Will check it out, thanks
mini orchard
post Nov 30 2022, 07:07 AM

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QUOTE(Assclown @ Nov 29 2022, 03:22 PM)
Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
*
Amount too small to benefit from refinancing unless borrower need the extra cash from higher loan and or the property have also appreciated above 50% in value.
aaa_batteries
post Nov 30 2022, 08:23 AM

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You need to calculate the savings from switching loan. Sometimes, it is easier to approach the current bank and ask to revise to lower interest rate if it's offering lower rates now.

I have my own spreadsheet for loan calculation. Let me know if you are interested but use it at your own risk 😀.
eric.tangps
post Nov 30 2022, 09:19 AM

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QUOTE(Assclown @ Nov 29 2022, 03:22 PM)
Hi guys,

I have a housing loan with OCBC which has a 4.95% mortgage lending rate. Somehow the rate stayed the same from its last updated date which was in July 2014. The balance is about 129k, monthly 930, with 17 years to go.

I was thinking if I should refinance and get a better rate of say 3.8%. But the risk would be that the new loan will end up having same or higher interest rate in the future. Of course, would have to take into account the legal fees, stamp duty, etc.
*
I don’t think 129K can get 3.80% and secondly for a mere 1% savings, you need to come out the costs of Refinancing ie Legal Fees and Valuation.

Unless you need extra cash, refinancing for interest savings is not worth it.

 

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