Non Transparent mortgage pricing to existing borrows!
Non Transparent in mortgage pricing to existing borrowers: I will like to caution borrowers of their mortgage. As a Temasek-linked bank with 28% equity stake in DBS, how DBS coerced their mortgage customers in repricing their mortgage loan. In early Sept, I received a letter my 2 years fixed term loan at 2.75% will expire on 16th Oct 24. It will be charged at 5.1% wef 17th Oct based on 3 months SORA + 1.5%. A repricing team called me on 13th Sept to offer me 3.3% fixed for 2 years. As the US Fed was about to announce rate cut on 18th Sept US time, I enquired about when would the bank reprice their offerings. The officer “R” mentioned 23th Sept. The Fed announced rate cut of not 25 basis point, but instead, a bigger quantum at 50 basis point. On 24th Sept, when I called their mortgage repricing, they offered me 2.88% if I also reprice my other HL & Term Loan 2 which I have the rights for 1x repricing after locking in a 2 years fixed in Nov 23. If I were to reprice only the term loan that is due, they would charge me near peak of 3.3% which is the highest fixed rate before Fed cut. I checked mortgage portals like SingSaver, Redbricks, DBS is offering 2.8% fixed rate for 2 years if a customer refinance with them from other banks. As you all know, the world led by the US, underwent a rate hikes cycle in the past 2 years from near zero to 5.5%. Many borrowers suffered high interest rates in the past 2 years. Now that the tide has started to pivot towards a rate cut cycle, they are trying to exploit on poor mortgagers like us who does not own an investment property to lock in high interest rates over the next 2 years when the interest rate will be dropping this year & next. Thereby, denying us the rights to enjoy lower interest rates over the next two years. To all mortgagers out there, if you are considering to gear up a term loan, it may be wiser to synchronize your existing housing loan’s lock-in period with the new term loan, especially if the new loan is only a small amount, otherwise, for whatever the reasons you needed the fund, DBS will exploit you to the maximum unreasonably regardless of the market interest rates environment like the experience I have just encountered. It actually carry themselves in very bad faith with Piyush Gupta departing, & a home grown, first female CEO Ms Tan Su Shan is assuming the helm early next year!