Singapore is more than 25 years behind UK. Traded Endowment market arises due to UK banks launching Home Loans tied to Endowment Plans more than 25 years ago. 


As consumers sell properties before loan maturity date in UK, after paying off their Housing Loans from sale proceeds of house, consumers end up holding Endowment policies that they no longer need and decided to sell in the secondary market. This led to the huge market in UK for “Traded Endowment”, estimated at about more than 1 billion pounds per year.

In Singapore, OCBC only launched a home loan-cum-endowment package in year 2006, more than 25 years behind UK.

OCBC Bank has launched a home loan-cum-endowment product - described as Singapore's first - aimed at helping customers pay off their home loans quicker.

The bank is confident that QuickOwn Home Loan will prove popular and that 15-20 per cent of new home customers will opt for this integrated loan plan with an endowment policy within the first three to six months of its launch, said Gregory Chan, OCBC's head of consumer secured lending.

'We want to provide customers with a seamless means of paying off their home loan earlier and enjoying a higher rate of return on their savings coupled with the peace of mind from insurance protection,' said Mr Chan.

Mr Chan said QuickOwn is targeted at 'mass market loan customers who need help in financial planning'.

QuickOwn will also be made available to OCBC's existing home loan customers.Under QuickOwn, customers taking a fixed-rate loan will pay interest at a fixed rate of 3.9 per cent per annum for the first three years and a floating rate of 3.6 per cent per annum thereafter.

Mr Chan says this compares with interest rates at a fixed rate of 4 per cent for the first three years and a floating rate of 3.75 per cent per annum thereafter under other loan packages in the market.

Under QuickOwn, customers need to take a minimum loan of $100,000 and the minimum contribution under the endowment plan is $3,000 per annum for 12 years.

As an example of the loan package's benefits, a customer taking a $500,000 loan for 30 years with interest fixed for the first three years, and contributing $4,304 per annum for 12 years to an endowment plan earning 2.88 per cent annual return, can shorten the loan repayment period by 5.2 years and save $79,700 in interest payments.

QuickOwn includes a regular premium insurance policy underwritten by The Overseas Assurance Corporation, a wholly owned subsidiary of Great Eastern Holdings, which in turn is a subsidiary of OCBC.

Nicholas Tan, OCBC's head of group wealth management, said 'being able to pay off your mortgage completely and truly becoming the owner of your own home is a significant milestone in the journey towards financial freedom for many Singaporeans'. He believes OCBC's new package helps customers achieve this goal.