On average, home renovation loans in Singapore charge about 5.33% in interest and a one-time initial processing fee of. Unlike other regular term loans offered by banks, the interest rate on a home renovation loan is called the “break rate.” This means that you pay interest on the outstanding balance of your loan. Because the borrower is required to pay interest and a portion of the principal each month, both the outstanding loan amount and the interest payment decrease over time. This allows the borrower to pay off the debt faster than they would otherwise.
Whether you've recently purchased a new apartment, are planning to make your home more conducive to hybrid work arrangements, or designing a nursery to welcome a new baby, you may have renovation plans in mind, now that the Covid-19 pandemic is almost over. By comparison, a home renovation loan with a cost of 6-7% (5% interest +1-2% commission) is definitely the best deal. Fortunately, banks offer renovation loans to help Singaporeans finance their renovation costs and reduce the stress of making their home image perfect. However, it's often a hassle to do further renovations in the future once you've settled into your new home, as you'd have to move existing furniture or rent a place to stay while renovations are going on.
If a hybrid work agreement has now become a permanent feature, it might be good to consider renovating your home to create a more work-friendly environment, allowing you to have a designated workspace. Because they are “new” and may already come equipped with floors, bathroom fixtures, and more, renovating new homes such as HDB BTO floors and new condos is often cheaper than resale properties. This is because banks offer lower interest rates to those who get a mortgage loan and a renewal loan from the same bank. Not only are property prices always rising, but if you want to fix your home to make it truly your own, you'll also need to shell out a penny for your home renovation.
This debt obligation includes not only your renewal loan, but also your home loan, car loan, and other secured or unsecured loans. UOB doesn't have a renovation loan, but it does have a “UOB Home Construction Loan” that allows you to use the funds not just for renovations, but to build your home (e.g.