DBS joins UOB and OCBC with green home loan offering

SINGAPORE – DBS Bank has followed on the heels of UOB and OCBC Bank in offering green home loans for private property projects.

But unlike the offerings from UOB and OCBC, which launched “eco-mortgages” in 2021, the DBS loan option is available only to borrowers with private properties under construction.

These projects must have a Green Mark rating from the Building and Construction Authority (BCA) or be earmarked for one, DBS said on July 10.

The promotional green home loan rate for a minimum mortgage of $1 million for the first year is pegged to the three-month compounded Singapore Overnight Rate Average, or Sora, plus a spread of 0.25 per cent. The spread is the profit the bank earns.

This would mean that the first-year promotional rate for a $1 million mortgage is 2.2278 per cent, given prevailing rates.

DBS said its rate is the most competitive green home loan in the market and is lower than the standard mortgage rates for new private residential launches.

Mr Calvin Ong, head of the consumer banking group at DBS Singapore, said the competitive rate will hopefully incentivise customers to make environmentally conscious decisions when they buy a home.

Mr Ang Kian Seng, group director of environmental sustainability at BCA, said the DBS initiative aligns with the Singapore Green Building Masterplan, which aims to green 80 per cent of buildings – by gross floor area – by 2030.

Green Mark-certified buildings provide healthier indoor living environments while reducing energy costs, Mr Ang added.

DBS is late to the green loan party, given that UOB and OCBC have been offering such mortgages since 2021.

Mr Ong said the bank launched its loan offering once it had built up a robust pipeline of “green” housing developments.

It is financing 10 residential property projects in 2025 that are set to receive a Green Mark certification.

These 10 properties make up 40 per cent of all the residential property launches in 2025, Mr Ong added.

Home owners are eligible for a UOB green loan if their property is Green Mark certified.

Unlike the DBS green home loan, which is only for private properties under construction, the UOB mortgage is available for completed private residential properties, with a minimum loan size of $250,000. 

The bank is offering a promotional rate of three-month compounded Sora, plus a spread of 0.7 per cent per annum – 0.45 percentage point higher than what DBS is offering.

OCBC is the trailblazer in the space. Ms Maryanne Phua, its head of home loans, said the bank was the first to launch green home loans in 2021. 

Its product differs slightly from those of the other two banks. While DBS and UOB extend green loans for Green Mark-certified buildings, OCBC uses different criteria and requires prospective home owners to pass a BCA assessment.

Home owners will be assessed on whether they are taking steps to furnish their home with environmentally friendly features. This can be through home design, the use of energy-efficient appliances, or smart home features that regulate energy consumption.

Ms Phua said OCBC has promotional packages for both buildings under construction and completed properties.

“We have seen growing interest, and compared with 2021, the take-up of Eco-Care Home Loans increased sevenfold in 2024,” she added.