Lower mortgage rates help 
this manager grow his savings

Refinancing with the POSB HDB Loan has enabled Pattabiraman Ramakrishnan to reduce the monthly mortgage payments on his flat. And this has translated to additional cash each month to help him build up his retirement savings.

Said the 42-year-old: “By refinacing my home loan, I can save an additional S$2,500 in cash per year, which is a considerable amount of savings for me.”

The project manager at Yokogawa Electric International has been married for eight years and has a three-year-old son.

Home — the first for him and his family — is an HDB Executive flat in Sengkang, which he bought for about S$291,000 seven years ago. He has no immediate plans to move to a bigger home.

Like many Singaporeans, Pattabiraman started out with a mortgage with the HDB, which has a current HDB Concessionary Loan rate of 2.6 per cent per annum^.

Lower rates, 
greater savings

When Pattabiraman saw a newspaper ad about the POSB HDB Loan, he began to consider refinancing his HDB home loan.

At that time, the POSB HDB Loan interest rates were about 1.88 per cent per annum, with a cap of 2.5 per cent per annum for the first eight years of the loan.

Among its advantages, the lower interest rates offered savings and gave him greater flexibility in managing his finances.

Pattabiraman’s monthly mortgage payments amounted to S$1,050 under the HDB Concessionary Loan and he used to pay a portion of that in 
cash.

Now that he’s switched to the POSB HDB Loan however, he pays S$950 each month and his CPF funds are sufficient to cover the monthly instalments.

Looking ahead

Pattabiraman decided to refinance his loan and signed up for the POSB HDB Loan at the bank’s branch in September.

“I was quite happy with the service,” he said. “Through one point of contact, I was able to complete the loan-approval process and I got my 
approval on the spot.

“The service was superb. The POSB staff were polite and answered my queries professionally.”

Pattabiraman also took advantage of this opportunity to plan ahead. “Along with the HDB Loan, POSB offered me an insurance plan so I could also build up my savings for retirement.

This is the seventh story in a 10-part collab­oration between TODAY and POSB.

^The HDB Concessionary Loan rate is 2.6 per cent per annum at the time of publication.
^^POSB HDB Loan interest rates are capped at prevailing CPF Ordinary Account (OA) 
rate which is at 2.5 per cent per annum at the time of publication. Details on CPF OA rate are available on the CPF Board website.