POSB is offering HDB flat buyers housing loan interest rate that is pegged to CPF Ordinary Account Rate. It is currently the only bank offering home loan package with interest rate cap for as long as 10 years.
How does it work?
Under the POSB package, borrowers will pay housing loan interest rate at 1.38% above the 3 month SIBOR for the first 10 years and thereafter at 1.48% above 3 month SIBOR. For the first 10 years, POSB has set a cap on the interest rate at CPF Ordinary Account Rate of 2.5%, which means borrowers will not be paying more than 2.5% in interest even if SIBOR goes up.