Loans

Best Renovation Loans 2018

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.

Table of Contents

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 the 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%5.33% Rest RateS$445S$1,172
DBS Renovation Loan2.0%4.88% Rest RateS$449S$1,455
RHB Renovation Loan1.0%5.8% Flat RateS$454S$1,529
OCBC Renovation Loan1% + S$200 or S$3005.38% Rest RateS$455S$1,736

Cheapest Short-Term Renovation Loan: 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 one of the best options in Singapore because it charges the lowest interest and processing fee for tenures shorter than 3 years.

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

  • Low Processing Fee and Interest Rates
  • 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

Cheapest Long-Term Renovation Loan: Maybank Renovation Loan

Whether you want to implement small-scale renovations one by one or you want to spread out your loan repayment over a long period of time given your budget, Maybank's renovation loan could be the best available option for you. First, Maybank has some of the most flexible conditions for its borrowers. Maybank lends as little as S$5,000, while most banks require at least S$10,000 or S$15,000 of loan principal to qualify for a renovation loan. It also has a comparatively low annual income requirement of S$24,000. This means that Maybank's renovation loan could work especially well for those who might be sufficient with a small renovation loan of S$5,000 to S$10,000.

Not only that, Maybank's interest rate of 4.33% is the lowest in the market for long-term tenures from 4 years to 5 years. This means that Maybank is an ideal option for those whose budgets might be limited and may require them to spread out their loan repayment thinly over a long period of time. We should also note that this rate can be reduced dramatically if you already have a home loan from Maybank. For existing home loan customers, Maybank will reduce the interest rate from 4.33% to 2.88%, which is the lowest in the market.

Pros of Maybank 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 Maybank Renovation Loan

  • * Relatively High Cost for 1-2 Year Maturity

Cost of Maybank 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 Maybank Renovation Loan’s interest rate, monthly payment and total cost by different maturities.

MaturityProcessing FeeInterest Rate (Rest Rate)Monthly instalmentTotal cost
11.0%4.33%S$1,280S$504
24.33%S$654S$836
34.33%S$445S$1,172
44.33%S$341S$1,513
54.33%S$278S$1,859

Renovation Loan From Your Home Loan Lender

{"items":["\u003Cdiv class=\"affiliate-banner\"\u003E\n \u003Cdiv class=\"affiliate-banner-image\"\u003E\n \u003Cimg class=\"ShortcodeImage--image\" style=\"width: 200px;\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/maybank-1\" srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/maybank-1 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_2.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/maybank-1 2x\"\u003E\n \u003C\/div\u003E\n \n\u003C\/div\u003E","\n\u003Cdiv class=\"affiliate-banner\"\u003E\n \u003Cdiv class=\"affiliate-banner-image\"\u003E\n \u003Cimg class=\"ShortcodeImage--image\" style=\"width: 200px;\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/ocbc-1\" srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/ocbc-1 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_2.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/ocbc-1 2x\"\u003E\n \u003C\/div\u003E\n \n\u003C\/div\u003E","\n\u003Cdiv class=\"affiliate-banner\"\u003E\n \u003Cdiv class=\"affiliate-banner-image\"\u003E\n \u003Cimg class=\"ShortcodeImage--image\" style=\"width: 200px;\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/dbs-1\" srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_1.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/dbs-1 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_fit,dpr_2.0,f_auto,h_1600,q_auto,w_200\/v1\/referral_logos\/sg\/banking\/dbs-1 2x\"\u003E\n \u003C\/div\u003E\n \n\u003C\/div\u003E"],"offsetPercentage":20}

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 1.0% to 1.5% in interest rate through this preferential rate. For instance, Maybank's interest rate declines from 4.33% to 2.88% for their home loan customers, while DBS and POSB’s interest rates decline from 4.88% to 4.38% for their home loan customers. For a loan of S$15,000 over 3 years, this could translate into savings of S$110. 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

Comments and Questions