Because of what I do, and thanks to social media algorithms, I’ve been on the receiving end of sponsored ads promoting mortgage advice from property agents on Facebook. It is a pretty common tactic to rake in leads. Lately though, with very attractive packages offered by banks in light of the coronavirus pandemic, there has been a surge of agents jumping on the lead generation bandwagon.

This puts me at great concern. No, I am not concerned by agents “disturbing my rice bowl”. I am not someone who minds sharing the $204 billion (source: market. The pie is too big for me to eat alone anyway.

My concern is more for, you, the customer.

These marketing hooks are based on certain assumptions that may be detrimental if not understood correctly. It is even worse if the said agent is not familiar with bank loans and macroeconomics factors at play when it comes to interest rates management.

What Does An Agent Actually Know?

It is well and good if you are getting mortgage advice from property agents who are ex-bankers or ex-finance professionals. They should be well-versed in the process and can highlight the key differences among the packages and simplify the financial terms. But a good deal of them is not, nor do they have qualified knowledge on the subject matter. At best, they have passed the Real Estate Salesperson Examination (and no doubt, after having gone through it myself, I can say that passing it is no mean feat).

A real estate agent requires only an ‘O’ Level certification to sit for the exam. Based on the RES Exam Syllabus, only 1 module relates to Property Finance and financial calculations. My personal view is that it is insufficient to help prepare a person in anticipating the forces of the economy and market that will affect interest rates.

The Enticement of “Cheapest Rates”

It is is understandable: with rates being slashed to near zero by The Feds, and with Covid-19’s grip not relaxing anytime soon, it is only a matter of time before the banks start slashing their rates. So it is only natural to wave the rates around as a way to entice leads. I personally think it is the most overused tactic when it comes to mortgage advisory marketing, but that’s ultimately what many consumers are looking for, right? 

But there’s always a catch to “cheap rates”. Caveat emptor, they say. So that leaves the responsibility of knowing what you are getting into with you. When you see “cheaper rates”, you have to ask yourself these questions:

  1. Are the rates fixed or floating? Which rate are they referencing to – e.g. SIBOR or Board Rate?
  2. What is the lock-in period? What if you need to sell your property at an earlier time? How is the penalty?
  3. What is the minimum loan size to qualify for that “cheaper rate”?

In fact, there are many other terms and conditions that a property agent might not understand, much less you.

From HDB to Bank Loans

In another common tactic, some property agents entice clients to place their bet on the “lower bank rates” over HDB Concessionary Loan Rates. For those on HDB loans, the banks offer an enticingly lower rate than the 2.6% per annum interest rate. Some ads may mislead these homeowners into believing that the lower bank rates will remain throughout the tenure. But this is not the case as the rates may change around year 3 or year 4.

Based on this 20-year SIBOR trend chart, you will notice that Sibor rates had been above HDB rates. No one can say for certain that it will never go back to those levels again. So despite the currently low rates, you need to have a clear mortgage strategy in place before considering switching to a bank loan to save you some money.

By the way, there is NO switching back to an HDB loan if interest rates rise if the economy picks up years later.

The Role of a Property Agent aka Salesperson

We have a governing body that regulates the Salesperson/Agent activities. Mortgage or refinancing advisory is not one of the duties of a salesperson/agent. As mentioned above, for most, it is not their key strength, so mortgage advice from property agents should be taken with a pinch of salt.

I personally feel that it is far more prudent for agents perhaps to focus their efforts on what is within their duties. For example, they can continue marketing new launches since these are yet to be built properties and virtual viewing resources are readily available. The developers are paying generous commissions from property sales as compared to the bank referral fees that the agent can potentially get from a successful loan referral.


I do believe that there are agents out there who have their client’s interests at heart and want to do it right.

If you are an agent, it is best to get your clients to speak to a qualified and experienced mortgage advisor. You can also consider taking up a workshop offering the basics on mortgage advisory to understand how it all works. Drop us a message to if you would like to see how we can help your clients.

If you are looking to refinance or a bank loan for your upcoming property purchase, you can also fill up the enquiry form and we will contact you to explain it all in the simplest way possible.


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About The Author

About The Author

Shamir Wahid

Shamir has more than 8 years of banking experience across various areas in Retail, Corporate and Private banking (including Islamic finance) for one of the largest banks in Southeast Asia. In Corporate Banking, he was involved in structuring loan transactions for real estate developers and REITs. He also worked with private bankers to provide credit solutions to their high net worth clients.