DBS launches novel fixed and floating rate mortgage plan

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New loan plan helps hedge interest rate changes

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Customers get best of both worlds

SINGAPORE, November 7, 2003 - DBS Bank today announced the launch of a combination fixed and floating rate housing loan plan, the first of its kind in Singapore.

The novel Fixed + Floating Plan from the Bank's popular Mortgage 1-2-3 Plan will allow customers to have both fixed and floating rates in the same loan, thereby offering greater protection from unexpected interest rate changes during the tenure of the loan.

Under the Fixed + Floating Plan available at DBS branches from tomorrow (Saturday), a customer can choose to put some of his loan on a floating plan and the rest on fixed rates.

The maximum amount under the floating plan is 50% of the total loan value, and there is no penalty charge or lock-in period to deter customers from pre-paying the loan.

To illustrate, if a customer signs up for a $500,000 loan, he can choose to have 50% of the amount charged at fixed rates and 50% at floating rates, or he can choose to have 80% on fixed and 20% on floating if he expects interest rates to rise. He cannot, however, take out an 80:20 floating to fixed rate combination as the fixed portion has to be at least 50% of the total loan amount.

Whatever combination he chooses, his monthly repayments will be calculated by applying the fixed and floating rates to the desired loan split. In the case of a 25-year, $500,000 housing loan under the Fixed + Floating Plan, a customer who opted to have 50% of the loan on fixed rates and the remaining $250,000 on floating, will pay interest of $20,024 for the first two years.

This is $1,722 less than a loan on the current fixed plan and $1,723 more than on the current floating rate plan. Prevailing interest rates are at historical low levels.

The Fixed + Floating Plan is available only for the financing of private properties.

Edwin Khoo, head of secured loans at DBS Consumer Banking Group Singapore said: "The latest Fixed + Floating Plan is an extension of DBS' policy of giving our customers flexibility and security in the way they finance their homes.

"The success of our Mortgage 1-2-3 Plan shows that customers want that flexibility. On top of being able to choose the pace at which they pay their principle and interest, they can now opt for the combination of interest rates that will help them hedge unexpected movements in interest rates."

The Fixed + Floating Plan is offered under DBS Mortgage 1-2-3, a needs-based mortgage solution that was launched in May this year to help ease cashflow pressures faced by home owners during the economic downturn.

About DBS

Headquartered in Singapore, DBS is one of the largest financial services groups in Asia. The largest bank in Singapore and one of the top five in Hong Kong as measured by assets, DBS has dominant positions in consumer banking, treasury and markets, securities brokerage, equity and debt fund raising. Beyond the anchor markets of Singapore and Hong Kong, DBS serves corporate, institutional and retail customers through its operations in Thailand, The Philippines, and Indonesia. In China, the bank has branches and representative offices in Shanghai, Beijing, Shenzhen, Fuzhou and Tianjin. The Bank's credit ratings are among the highest in the Asia-Pacific region. More information about DBS Group Holdings and DBS Bank can be obtained from our website www.dbs.com.