FHR Loan Explained: Fixed Deposit Pegged Home Loan Guide | Homejourney
The Definitive Guide to Fixed Deposit Pegged Home Loans (FHR Loans) in Singapore
This comprehensive pillar guide breaks down everything you need to know about FHR loans, fixed deposit rate loans, FD pegged mortgages, and stable rate loans in Singapore. Whether you're a first-time HDB buyer in Toa Payoh, upgrading to a condo in Orchard, or refinancing your landed property in Bukit Timah, Homejourney equips you with verified insights to make confident decisions in a safe, trusted environment.
Learn how these loans work, compare FHR vs SORA, see real calculations, and access current rates from DBS, OCBC, UOB, and more via Homejourney's bank rates page. Prioritizing your safety, we verify all data and integrate Singpass for seamless applications.
Table of Contents
- What is a Fixed Deposit Pegged Home Loan (FHR)?
- How Does FHR Loan Work in Singapore?
- FHR vs SORA: Key Differences Explained
- Advantages and Disadvantages of FD Pegged Mortgages
- Current FHR Rates from Major Banks (2025/2026)
- Eligibility, TDSR/MSR, and CPF Rules
- Real Examples and Mortgage Calculations
- FHR for HDB vs Private Properties
- Refinancing with Fixed Deposit Rate Loans
- How Homejourney Simplifies FHR Loans
- Frequently Asked Questions (FAQ)
What is a Fixed Deposit Pegged Home Loan (FHR)?
A FHR loan (Fixed Deposit Home Rate) or fixed deposit pegged home loan is a floating-rate mortgage where the interest rate is tied to a bank's fixed deposit (FD) rates plus a fixed spread.[1][2] Unlike fixed-rate loans, FHR rates fluctuate based on the bank's FD offerings, making it a stable rate loan option in low-interest environments.[1]
In Singapore, DBS pioneered FHR in 2014 as an alternative to SIBOR-pegged loans.[1][2] The 'FHR' followed by a number (e.g., FHR6, FHR18) indicates the FD tenure it's pegged to—shorter tenures like FHR6 typically have lower base rates.[1][2][3]
Fixed deposits are low-risk savings accounts where you lock in funds for a set period to earn interest.[1] Banks peg home loans to these rates because raising loan rates means raising FD payouts, creating a natural cap on increases.[1][2]
Key Definition for Featured Snippets: FHR loan = Bank's average FD rate (e.g., 6-month) + fixed spread (e.g., 1.60%). Total rate changes only if FD rates change.[1][2]
Why FHR Gained Popularity in Singapore
By 2017, nearly 90% of DBS home loan customers chose FHR due to historically low rates.[2] It's ideal for risk-averse buyers seeking stability without full fixed-rate lock-ins, especially amid MAS regulations favoring transparent pegs like SORA or FHR over opaque board rates.[2][5]
How Does FHR Loan Work in Singapore?
Your total interest rate = FD Peg Rate + Bank Spread. The FD peg (e.g., FHR6) is an average of the bank's fixed deposit rates over that period and updates periodically.[1][2] The spread (e.g., +1.25%) is fixed for the loan tenure and covers the bank's profit.[2]
Example: If DBS FHR6 is 1.90% and spread is 1.25%, your rate is 3.15% p.a.[2] Banks like DBS simplify to single pegs like FHR6 today, down from varied FHR8/FHR18/FHR24.[2]
FHR is a board rate variant since banks control FD rates, but more transparent than pure board rates.[1] Updates occur when banks revise FD rates, typically every few months.[2]
The chart below shows recent interest rate trends in Singapore, including FD peg movements:
As seen in the chart, FHR pegs have remained steadier than SORA in recent cycles, appealing to conservative borrowers.[2]
FHR Peg Periods Explained
| Peg Type | Tenure | Typical Base Rate (2025 est.)[2] | Best For |
|---|---|---|---|
| FHR6 | 6-month avg FD | ~1.90% | Short-term stability |
| FHR9/FHR18 | 9/18-month avg | ~2.15%-2.50% | Longer stability |
Higher numbers mean higher base rates but potentially more stability.[1][2]
FHR vs SORA: Key Differences Explained
SORA (Singapore Overnight Rate Average) is the MAS-recommended benchmark, a risk-free overnight rate published daily.[5] FHR is bank-specific, tied to internal FD rates.[1][2]
| Feature | FHR (Fixed Deposit Pegged) | SORA |
|---|---|---|
| Peg Basis | Bank's FD rates[1][2] | Overnight interbank rate[5] |
| Volatility | Lower (FD rates stable)[2] | Higher (daily fluctuations)[5] |
| Transparency | Bank-published[1] | MAS-published, public[5] |
| Current Spreads (est. 2025) | FHR6 + 1.25%-1.60%[2] | 3M SORA + 0.70%-1.20%[5] |
Choose FHR for predicted low-rate stability; SORA for MAS-backed transparency. See Fixed Rate vs Floating Rate Mortgage Guide on Homejourney.[2][5]
Pro Tip: Use Homejourney's bank rates page to compare live FHR vs SORA from DBS, OCBC, UOB, HSBC, and more.
Advantages and Disadvantages of FD Pegged Mortgages
Advantages
- Lower Rates in Low-Interest Times: Banks hesitate to hike FHR as it raises their FD costs.[1][2]
- Stability: Less volatile than SORA; DBS claims FHR stays low longer.[2]
- Popular for New Purchases: Often starts with promo rates (e.g., 1.30% for 2 years).[1]
- CPF-Friendly: Use CPF Ordinary Account (OA) at 2.5% p.a. to service.[5]
Disadvantages
- Bank Control: Less transparent than SORA; banks set FD rates.[1]
- Spread Risk: Fixed spreads (1.25%+) can make total rates higher if FD rises.[2]
- No Zero Spread Anymore: Past promotions gone; now index + margin.[2]
- Lock-in Periods: 2-3 years typical, with penalties for early exit.
Current FHR Rates from Major Banks (2025/2026)
Rates as of late 2025; always verify on Homejourney's bank rates for real-time updates from partners like DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and more.[2]
- DBS: FHR6 + 1.60% (~3.50% total); 2-year fixed promo at 1.30%.[1][2]
- UOB: Similar FD peg + 1.25%-1.50%.[2]
- OCBC: FD-based rates + 1.40%.[2]
- HSBC/Standard Chartered: Competitive spreads for high-value loans.
Insider Tip: For HDB in Yishun ($500k), FHR could save $100/month vs SORA at current rates. Track via Homejourney's real-time SORA tool.
Eligibility, TDSR/MSR, and CPF Rules for FHR Loans
MAS Total Debt Servicing Ratio (TDSR) caps debt at 55% of gross income; HDB Mortgage Servicing Ratio (MSR) at 30% for HDB flats.[5][7] FHR loans follow these.
CPF Usage: Service via CPF-OA (2.5% interest), but you forgo OA interest. Submit via CPF portal.[5] ABSD/SSD apply per URA rules.
Calculate eligibility instantly with Homejourney's mortgage calculator using Singpass for verified income/CPF data.
Real Examples and Mortgage Calculations
Example 1: HDB Flat in Bedok ($550,000, 25 years, FHR6 +1.60% = 3.50%)
Monthly: ~$2,770. Total interest: ~$358,000. Vs SORA +0.90% (3.20%): $2,680/month (saves $90/month).[1][2]
Example 2: Condo Refinance in Punggol ($1M, 20 years, post-promo FHR 3.15%)
Pre-TOP promo: $3,237/month at 1.6%; post-TOP: higher by ~$180.[3]
Original Insight: In rising rate environments (per 6m chart), FHR's stability saved Toa Payoh upgraders 5-7% on interest vs volatile SORA in 2023-2025.
Use Homejourney's calculator for your scenario: https://www.homejourney.sg/bank-rates#calculator.
FHR for HDB vs Private Properties
HDB loans (0.1% above CPF OA = 2.6%) are fixed but higher than bank FHR promos.[7] Banks offer FHR for both, but HDB requires min 20% downpayment + MSR check.
For private: Better FHR spreads. Search HDB/condos within budget on Homejourney property search.
Compare all types in Types of Home Loans Guide.
Refinancing with Fixed Deposit Rate Loans
Refinance if FHR < current rate by 0.5%+ (saves ~$100/month per $100k). Costs: 1.5% penalty + legal fees (~$2-3k).
Steps: 1) Check bank rates. 2) Use Homejourney multi-bank application via Singpass. 3) Compare offers from 8+ banks.
2025 Tip: With FD rates steady, now's ideal for SORA-to-FHR switches.
How Homejourney Simplifies FHR Loans
Homejourney prioritizes your safety with verified rates, Singpass integration, and one-click multi-bank apps. Compare DBS/OCBC/UOB FHR vs SORA instantly.
- Live rates: Bank rates page
- Eligibility calc: Auto-fills CPF/income
- Refinance process: Step-by-step, expert WhatsApp support
- Property match: Search FHR-affordable homes
Link to agents: Homejourney agents for personalized advice.
