OHR, which stands for OCBC Home Rate, is a new mortgage peg introduced by OCBC in October 2017. It replaces the bank’s Fixed Deposit-Linked Home Loan Rate (OCBC FDMR) and provides borrowers with option to choose from fixed and floating rate packages
OCBC OHR Home Loan Packages
You can choose from a fixed rate or a floating rate package, depending on your requirements.
- OHR Fixed Rate Package: This package provides you protection from interest rate fluctuations for 2 years by locking in a fixed rate of interest on your loan. As of 15 May 2018, the OHR (2-year fixed) is 2.18% p.a. (OHR of 1% p.a. plus a spread of 1.18%).
- OHR Floating Rate Package:Floating rate loans are generally cheaper than fixed rate loans and are subject to change from time to time. As of 15 May 2018, the first year OHR floating rate is 1.65% p.a. and second year OHR floating rate is 1.70% p.a.
How is it Different From Fixed Deposit-Linked Rates?
In case of fixed deposit-linked rates, the home loan rate is linked to the interest rates offered by the banks on their fixed deposit accounts. As the fixed deposit account rates increase, the home loan rates also increase. So, in a way, this type of home loan rate is controlled by the banks. OHR, on the other hand, is more of a market-determined loan benchmark and, therefore, more transparent.
Other Features of OCBC Home Rate
Free switch: In a situation when the OHR increases and you find yourself unable to afford the increased charges, you can get in touch with the bank for a new package without any charges or fees. This, in a way, gives you some assurance that OCBC will not make major changes to the OHR to avoid the situation of too many customers using the free-switch facility.
Loan prepayment flexibility: You have the flexibility to prepay up to 50% of the amount of your loan within the lock-in period, without paying any prepayment charges.
Rate revision notice: OCBC will give a 30-day notice before revising the OHR.