Fixed Deposit Pegged Home Loan Explained: How to Improve Approval Chances

A Fixed Deposit Pegged Home Loan (also called FHR loan or fixed deposit rate loan) ties your mortgage interest to a bank's fixed deposit rates plus a fixed spread, offering relative stability compared to volatile benchmarks like SORA. To improve approval chances on Homejourney, prepare strong financial documents, use our eligibility calculator, and submit via multi-bank application for DBS, OCBC, UOB, and more.

This cluster article dives into FHR loans as part of our pillar guide on Types of Home Loans in Singapore: Complete Comparison Guide by Homejourney. Homejourney prioritizes your safety with verified bank partners and Singpass integration for secure, transparent applications.

What is a Fixed Deposit Pegged Home Loan?

FHR stands for Fixed Deposit Home Rate, pioneered by DBS in 2014 as an alternative to SIBOR-pegged loans[1][2]. Your interest rate = bank's average fixed deposit rate (e.g., FHR6 for 6-month average) + bank spread (e.g., 1.25%). For instance, if DBS FHR6 is 1.90% and spread is 1.25%, total rate is 3.15%[2].

Higher numbers like FHR18 mean longer-term fixed deposits, which typically yield higher rates but more stability[1][3]. Banks like DBS, UOB offer these as stable rate loans, popular for 90% of DBS home loans in 2017 due to low initial rates[2]. Unlike board rates, FHR ties banks' hands—raising loan rates means higher deposit payouts[1].

Homejourney's platform lets you compare live FHR rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others at https://www.homejourney.sg/bank-rates.

FHR vs SORA: Key Differences for Singapore Buyers

FHR is a fixed deposit rate loan (bank-controlled but deposit-linked), while SORA (Singapore Overnight Rate Average) is a market-driven benchmark published by ABS[4]. FHR offers steadier rates as banks avoid frequent hikes to not deter depositors[2]. SORA fluctuates daily; 3-month compounded SORA rose from 0.19% in 2022 to 3.64% by 2024[4].

The chart below shows recent interest rate trends in Singapore:

As seen, FHR tends to lag SORA peaks, providing predictability for HDB upgraders or private property investors[2]. For full comparison, see our pillar on Types of Home Loans in Singapore.

How FHR Loans Work: Step-by-Step Process

1. Banks publish fixed deposit rates daily; FHR uses an average (e.g., 6 months for FHR6)[1].
2. Add fixed spread (unchanging during tenure)[2].
3. Rate reviews periodic, but less volatile than SORA[4].
4. Initial promo: Often 1.30% fixed for 2 years on new purchases, then FHR + spread[1].

Example: $500,000 loan at FHR6 1.90% + 1.60% spread = 3.50% p.a. Monthly payment ~$2,500 over 25 years (use Homejourney calculator for precision).

Check Eligibility: Use Homejourney's tool at https://www.homejourney.sg/bank-rates#calculator factoring TDSR (60% debt cap) and MSR (30% for HDB).
Apply Multi-Bank: One Singpass submission reaches DBS to Maybank.
Await Offers: Track status on Homejourney dashboard.
Lock In: Choose best FHR package.

Documentation Checklist for FHR Approval

NRIC (front/back)
Latest payslips (3 months)
Employment pass/confirmation letter
Latest IRAS NOA (Notice of Assessment)
CPF statements (last 6 months)
Bank statements (3-6 months)
Sale/purchase agreement
Proof of deposits (boosts FHR appeal)

Pro Tip: Place fixed deposits with the applying bank (e.g., $50,000 in DBS FD) to negotiate lower spreads—insider move for better FHR terms[1]. Obtain docs via Singpass for HDB/CPF; Homejourney auto-fills 80%.

7 Actionable Tips to Improve FHR Approval Chances

Boost odds on Homejourney with these steps:

Build Buffer: Keep DSR under 50%; pay down debts first.
Deposit Leverage: Park funds in bank's FD—shows loyalty, may waive fees[2].
Timing: Apply post-bonus; rates stable per chart above.
Clean Credit: Check CTC via Singpass; fix errors.
Multi-Bank via Homejourney: One app to 10+ banks increases offers.
Refi Smart: If existing SORA > FHR, refinance (no penalty after lock-in).
Expert Chat: WhatsApp Homejourney for personalized review.

Avoid pitfalls: Don't apply to one bank—Homejourney's multi-submission gets 2-3x responses. For HDB, confirm LTV/ABSD compliance via HDB portal.

What to Expect: Timelines and Bank Criteria

Banks assess income stability, age (under 65 ideal), property type (HDB/private). Approval: 3-14 days; full docs needed post-AIP. DBS/UOB favor FHR for under-construction properties[3].

Homejourney tracks your app securely, notifying of FHR offers side-by-side. Post-approval, link CPF OA for payments (2.5% interest trade-off)[4].

FAQ: Fixed Deposit Pegged Home Loans

What is an FHR loan?
FHR (Fixed Deposit Home Rate) pegs your mortgage to bank FD rates + spread for stability[1][2].

FHR vs SORA—which is better?
FHR steadier for risk-averse; SORA potentially lower long-term. Compare on Homejourney[4].

Current FHR rates in 2025?
Around 3.0-3.5% (FHR6 +1.25%); check live at https://www.homejourney.sg/bank-rates.

Can I get FHR for HDB resale?
Yes, from DBS/OCBC; use Homejourney for eligibility first.

How does Homejourney improve my chances?
Multi-bank apps, Singpass auto-fill, real-time rates—safe and fast.

Disclaimer: Rates fluctuate; not financial advice. Consult professionals. Homejourney verifies partners for trust.

Ready to secure your FD pegged mortgage? Start with Homejourney's calculator and apply securely today. Explore properties at https://www.homejourney.sg/search. For more, read our pillar on types of home loans.