Comparison: DBS vs Maybank Renovation Loan

Home renovation loans in Singapore offer a low-interest funding option for homeowners looking to spruce up their abodes. Here’s a comparison between two popular renovation loan packages.

Given our robust home ownership rates, it's not surprising that demand for home renovation loans in Singapore is similarly elevated. 

That’s good news for homeowners looking to renovate their abodes. With an abundant selection of renovation loan packages, there’s bound to be a good deal.  

Before we examine two popular renovation packages, DBS and Maybank, let’s discuss how renovation loans in Singapore work. 

How do renovation loans in Singapore work?

Renovation loans are a bit more specialised; they can only be used for certain types of expenses. Specifically, they can only be applied to renovation costs. This includes some fixtures and types of furniture, but you’ll be hard-pressed to cover the full slate of furnishings required in most homes. 

A renovation loan typically covers the following: 

• Electrical and wiring works
• Built-in cabinets
• Painting and redecorating works (e.g. wallpaper)
• Structural alterations
• External works within compound of the house
• Flooring and tiling
• Basic bathroom fittings

If you want to spend more on furniture and home appliances, then you would need to apply for a personal loan or find other sources of funding. 

Banks commonly carry out inspections to ascertain proper use of your renovation loan. Agreements to these verification checks are a prerequisite in granting your loan.

DBS Renovation Loan vs Maybank Renovation Loan

What these loans have in common

Both DBS and Maybank allow you to get a renovation loan of up to six times your monthly income, capped at a maximum of S$30,000. Moreover, both offer loan tenures of 12 to 60 months. 

DBS and Maybank offer similar fees for loan processing, cancellation, and early repayment – pegged at 1% of the amount borrowed or repaid, whichever is applicable. 

Beyond these points, however, the similarities end.

How these loans differ

#1: Interest rate

Maybank offers more favourable rates, especially if you also have a mortgage with them. Customers with an existing Maybank Home Loan can apply for a renovation loan at the preferential rate of 2.88% per annum.

New applicants can access a promotional interest rate of 4.10% per annum, but only if they apply by 31 October 2022. Thus, it’s important to remember that the conventional rate for Maybank Renovation Loan is 8.5% per annum. 

DBS, on the other hand, offers 4.18% per annum interest on their Renovation Loans, but if you’re opting for greener home features, you can apply for the Green Renovation Loan, which comes with a lower interest rate of 3.88% per annum. 

#2: Minimum annual income

The DBS Renovation Loan has a lower minimum annual income requirement. Applicants with an annual income of at least S$24,000 are welcome to apply. This can be split among two parties in a joint application with a minimum annual income of S$12,000 each. 

On the other hand, the Maybank Renovation Loan requires a higher annual income of at least S$30,000. For joint applications, the minimum annual income is set at S$48,000 across both applicants, with one party required to have at least a S$30,000 annual income. 

#3: Insurance

DBS Renovation Loan is bundled with insurance for your renovation loan. This applies if you are unable to continue repaying due to death or total and permanent disability. The premium for this insurance cover is 1% of your loan quantum, and is deducted from your loan before it is disbursed.

Meanwhile, Maybank doesn’t offer insurance. You need to purchase it separately if you want coverage for yourself and/or your loved ones against this potential debt burden. 

#4: Late payment charge

As with any other loans, failing to pay your monthly instalments on time will incur a late payment charge. DBS’ late fee for its renovation loan is slightly lower – S$35 per occurrence. Meanwhile, you’ll be charged S$60 per late payment if you get your renovation loan from Maybank. 

Of course, these late fees should be avoided by paying your instalments on time. You may borrow less or opt for a longer tenure to lower your monthly payments.

Conclusion: Which renovation loan should you choose?

Due to its lower income requirement, the DBS Renovation Loan is more suitable for those with lower income or young couples who are at the beginning of their careers. Another benefit – one that is likely to be appreciated by risk-averse borrowers – is the insurance cover that comes with it. 

Additionally, the DBS Renovation Loan comes with wallet-friendly interest rates of 4.18% per annum, and an even more attractive 3.88% per annum for those interested in energy-saving fixtures and other green practices. 

That said, don’t disregard Maybank Renovation Loan just yet. This loan offers an unbeatable 2.88% per annum interest if you also have a Maybank Home Loan mortgage, making it an easy first choice for certain borrowers. 

Read these next:

4 Things To Look Out For In A Renovation Loan
OCBC Renovation Loan Review (2022): Go Green for Lower Interest Rates
7 Ways To Lower Renovation Costs If You’re Moving Into Your New Home In 2022
A Complete Guide to Kitchen Renovations