Best Renovation Loans 2017

If your apartment or house is more than 10 years old, it might be time for you to start considering renovating your home. Especially with the extremely high real estate prices in Singapore these days, renovation offers an affordable and simple way of refreshing or upgrading your living space. If you are a landlord, renovating your flats could also help you increase the value of your real estate and raise rent. If you are looking for ways to help finance your home renovation, you may want to consider the best renovation loans in Singapore below.

Our Pick For the Best Renovation Loans in 2017

When shopping for a renovation loan, the primary factor you should consider is the overall cost of a loan. This includes both the processing fee and the interest expense. Below, we have compiled all the renovation loan offerings from major lenders in Singapore by cost. To calculate the total cost, we assume a loan of S$15,000 over 3 years for a borrower that makes at least S$30,000 of annual income. Given that home renovations cost S$55,000 on average, this loan would cover about 25% of the total cost of your home remodeling.

Renovation LoanFeeInterestMonthly PaymentTotal Cost
CIMB Renovation Loan1.0%4.18% Rest RateS$444S$1,136
Maybank Renovation Loan0.5%5.38% Rest RateS$452S$1,352
OCBC Renovation Loan1% + S$200 or S$3005.38% Rest RateS$452S$1,637
DBS Renovation Loan2.0%4.88% Rest RateS$449S$1,455
RHB Renovation Loan1.0%2.98% Flat RateS$454S$1,491

Best Renovation Loan with Lowest Interest Rates: CIMB Renovation Loan

When shopping for the best renovation loan, pretty much the only thing you should consider is how much a loan will cost you. The option with the lowest cost is the best option, assuming that you qualify for the loan. From this point of view, CIMB’s Renovation Loan is the best option in Singapore in our opinion because it charges the lowest interest and processing fee. Let’s look at its offering in detail.

According to our calculation, CIMB provides the best renovation loan with the lowest cost. It charges only 1% of processing fee, and its interest rates are the lowest we’ve seen in Singapore. Not only that, CIMB also requires an annual income of only S$24,000 to qualify for the loan, while most other banks require an annual income of at least S$30,000. The only downside is that CIMB will only lend out at least S$10,000 as a renovation loan. If you are looking for a renovation loan of a smaller size, you might want to consider other options.

Pros of CIMB Renovation Loan

  • Lowest Cost in Processing Fee and Interest
  • Low Annual Income Requirement of S$24,000
  • Max Principal Limit of S$30,000

Cons of CIMB Renovation Loan

  • High Minimum Principal Limit of S$10,000

Cost of CIMB Renovation Loan by Loan Duration

Depending on how much you borrow and how much you make, you may need to adjust the maturity of your loan. For instance, taking a longer maturity could help reduce your monthly payment so that you can borrow as much as possible given your budget. On the other hand, taking a shorter maturity could help minimize the overall cost of a loan by reducing your interest expense. Below, we list CIMB Renovation Loan’s interest rate, monthly payment and total cost by different maturities.

MaturityProcessing FeeInterest Rate (Rest Rate)Monthly instalmentTotal cost
11.0%2.98%S$1,270S$393
23.87%S$651S$762
34.18%S$444S$1,136
44.34%S$341S$1,517
54.44%S$279S$1,904

Best for Small Loan Sizes: OCBC Renovation Loan

Renovating your house sounds all great, but you may not have the budget or time to carry out a grand project all at the same time. Perhaps, you are planning to implement small-scale renovations one by one. In such a case, you might be sufficient with a small renovation loan of S$5,000 to S$10,000. Sadly, most banks require a minimum principal amount of S$10,000 to qualify for a renovation loan. However, OCBC can lend as little as S$5,000 at great rates.

While most banks require at least S$10,000 or S$15,000 of loan principal to qualify for a renovation loan, OCBC approves applications for as little as S$5,000. While its interest rate compares relatively favorably at around 5.38% vs average of the industry, it does charge more in fees, with a minimum of S$100 in administrative fee (or 1%, whichever is higher) and another S$200 in processing fee. Therefore, we really only recommend this loan to borrowers who need to borrow only a few thousand dollars at a time. We should note, however, that this cost can be reduced dramatically if you already have a home loan from OCBC. For existing home loan customers, OCBC will waive the S$200 of processing fee, and reduce the interest rate from 5.38% to 4.98%.

Pros of OCBC Renovation Loan

  • Flexible Principal Amount Limit from S$5,000 to S$30,000
  • Low Annual Income Requirement of S$24,000
  • Preferential Treatment for Existing Home Loan Customers

Cons of OCBC Renovation Loan

  • Relatively High Cost

Cost of OCBC Renovation Loan by Loan Maturity

Depending on how much you borrow and how much you make, you may need to adjust the maturity of your loan. For instance, taking a longer maturity could help reduce your monthly payment so that you can borrow as much as possible given your budget. On the other hand, taking a shorter maturity could help minimize the overall cost of a loan by reducing your interest expense. Below, we list CIMB Renovation Loan’s interest rate, monthly payment and total cost by different maturities.

MaturityProcessing FeeInterest Rate (Rest Rate)Monthly instalmentTotal cost
11% + S$200 or S$3005.38%S$1,286S$779
25.38%661S$S$1,208
35.38%S$452S$1,637
45.38%S$348S$2,066
55.38%S$286S$2,495

Renovation Loan From Your Home Loan Lender

If you already have taken out a home loan from a bank, it might be worthwhile to consider getting your renovation loan from the same bank. This is because banks provide a preferential interest rate for loyal customers who get both a home loan and a renovation loan from the same bank. Doing so can also benefit you by reducing the complexity of managing multiple bills from different parties every month. Usually, you can save about 0.5-1% in interest rate through this preferential rate. For instance, DBS and POSB’s interest rates decline from 4.88% to 4.38% for home loan customers. For a loan of S$15,000 over 3 years, this could translate into savings of S$116. Please see below table for detailed analysis of cost savings.

Total Cost by Maturity for DBS loan of S$15,000New CustomersLoyal CustomersDifference In Cost
1S$699S$647S$53
2S$1,074S$993S$81
3S$1,455S$1,340S$116
4S$1,842S$1,686S$156
5S$2,235S$2,033S$202

Cost Comparisons of Renovation Loans by Bank

For people who make at least S$30,000, there are a lot of renovation loan options in Singapore. Below, we illustrate how each loan will cost in dollars over the course of its maturity. We assume that a borrower takes out a renovation loan of S$15,000 over 3 years, and that they do not qualify for preferential rates for returning customers (i.e. they do not already have home loans from a certain bank).

Comparing total cost of home renovation loans from major banks in Singapore, assuming a loan of S$15,000 over 3 years
Cost of Home Renovation Loan in Singapore

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