Fixed Deposit Pegged Home Loan Explained: Bank Rate Comparison Guide | Homejourney
A Fixed Deposit Pegged Home Loan, also known as FHR loan or fixed deposit rate loan, ties your mortgage interest to a bank's average fixed deposit (FD) rate over a specific period, like 6 or 12 months, plus a fixed spread.
This creates a stable rate loan option compared to volatile SORA-pegged loans, as banks hesitate to raise FD rates without benefiting depositors. Homejourney helps you compare real-time FHR rates across DBS, OCBC, UOB, and more for safe, transparent decisions.
What is a Fixed Deposit Pegged Home Loan?
Fixed Deposit Pegged Home Loans (FHR) in Singapore peg your interest rate to the bank's published FD rates for terms like 6-months (FHR6) or 18-months (FHR18), plus a bank spread (e.g., FHR6 + 1.60%).
Higher numbers like FHR18 mean slightly higher base rates due to longer FD terms offering more interest, but overall stability.[1][2] Introduced by DBS in 2014 as an SIBOR alternative, FHR loans gained popularity, with nearly 90% of DBS home loans being FHR by 2017.[2]
Unlike board rates, which banks control freely, FHR acts like a floating rate but with built-in stability—banks raising FD rates increases their deposit costs, creating a natural cap.[1] This suits Singapore buyers seeking predictability amid SORA fluctuations (3-month SORA at 3.641% as of early 2024).[4]
Key Benefit for Singapore Buyers: Lower initial rates for under-construction properties, e.g., DBS offered 1.30% p.a. for first 2 years on new purchases, rising to FHR6 + 1.60% post-TOP.[1]
FHR vs SORA: Which is Better for Stability?
FHR loans offer more stability than SORA, as FD rates change less frequently and banks balance borrower and depositor interests.[2] SORA, Singapore's primary benchmark since SIBOR phase-out, fluctuates daily based on unsecured overnight loans.[4]
For a $1M loan over 25 years:
- FHR6 + 1.25% (~3.15% total): ~$4,800/month
- 3M SORA + 0.60% (~4.24%): ~$5,300/month (higher if SORA rises)
Homejourney's real-time tracker lets you compare FHR vs SORA instantly at https://www.homejourney.sg/bank-rates, with our mortgage calculator showing your payments.
The chart below shows recent interest rate trends in Singapore:
As seen, FHR pegs lag SORA spikes, providing a buffer for HDB upgraders or private property investors.
Singapore Bank Comparison: Current FHR Rates (Dec 2025)
Homejourney verifies rates daily from MAS-regulated banks. Here's a 2025 snapshot for new purchases/refinance (effective rates incl. spread; check live data as rates change):
| Bank | FHR Product | Current Rate (p.a.) | Lock-in | Best For |
|---|---|---|---|---|
| DBS | FHR6 + 1.60% | ~3.10% | 2 years | First-time buyers |
| OCBC | FDR9 + 1.40% | ~3.05% | 2-3 years | Refinancers |
| UOB | FHR12 + 1.50% | ~3.20% | 2 years | HDB owners |
| HSBC | FD Rate + 1.30% | ~2.95% | 3 years | Investors |
| Standard Chartered | FDR6 + 1.45% | ~3.00% | 2 years | Expats |
Rates approximate based on Dec 2025 trends; spreads fixed post-lock-in. Compare all 11 partners (Maybank, CIMB, etc.) on Homejourney.[1][2]
Pros of FHR: Lower volatility, competitive intro rates. Cons: Still floating (not fixed), higher long-term spreads vs. HDB loans (2.6% pegged).[7]
Pros and Cons of FD Pegged Mortgages
Advantages:
- Stability: Less prone to sharp rises; banks' deposit costs act as brake.[2]
- Low entry rates for pre-TOP properties (e.g., $400k loan at 0.6% = $1,436/month).[1]
- Transparency via published FD rates, unlike opaque board rates.
Disadvantages:
- Banks control spreads (e.g., +1.60%), potentially higher than SORA +0.50% in low-rate environments.
- No zero-spread deals anymore; all indexed.[2]
- Lock-in penalties (1-3 months interest) if refinancing early.
Best for risk-averse buyers in rising rate cycles. Use Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator to check fit.
How to Choose and Apply for FHR Loans on Homejourney
- Compare Rates: Visit https://www.homejourney.sg/bank-rates for live FHR vs SORA across DBS, OCBC, UOB, HSBC, etc.
- Calculate Affordability: Input income/property price; see monthly payments and TDSR compliance (60% cap).
- Apply Multi-Bank: One form via Singpass auto-fills docs; get competing offers (e.g., HSBC's lower spread wins).
- Documents Needed: NRIC, income slips (last 3 months), property Option to Purchase. Processing: 1-3 weeks.[4]
- Refinance Tip: No valuation needed if LTV <75%; save via Homejourney's streamlined process.
Link to pillar: For full home loan types, see Types of Home Loans in Singapore: Complete Comparison Guide by Homejourney ">Types of Home Loans in Singapore: Complete Comparison Guide by Homejourney .
Disclaimer: Rates change; Homejourney provides tools, not advice. Consult professionals. MAS regulates all loans.
FAQ: Fixed Deposit Pegged Home Loans
What is an FHR loan?
A floating home loan pegged to bank FD rates (e.g., FHR6 = 6-month avg FD + spread). Stable alternative to SORA.[1]
FHR vs SORA: Which is cheaper now?
FHR often lower in stable periods (~3.0-3.2% vs SORA ~3.7% + spread). Track on Homejourney.[4]
Can I use CPF for FHR loans?
Yes, for any property; but OA earns 2.5% p.a.—factor opportunity cost.[4]
Best bank for FHR in 2025?
HSBC for low spreads; compare personalized offers on Homejourney.
Is FHR fixed or floating?
Floating, but steadier than SORA.[2]
Ready to secure your FD pegged mortgage? Start comparing on Homejourney bank rates, calculate eligibility, and apply via Singpass. Find budget-fit properties at https://www.homejourney.sg/search. Homejourney prioritizes your safety with verified rates and multi-bank competition—trust us for confident decisions.
