HSBC has recently launched a home loan package that is linked to an equity index, the Morgan Stanley Capital International Singapore Free Index. The Singapore Free Index tracks 27 heavy weight stocks in Singapore.

Under this new package, customers are charged an interest rate of SIBOR + 1.1% throughout the loan tenure.

With the special equity-linked feature, the customer will get a cash rebate of 0.25% (of the current loan outstanding amount) if the Singapore Free Index manages to appreciate 30% from its original price (known as barrier level). This 30% appreciation check is done once every quarter over a period of two years.

Thus, it is possible for a customer to get a maximum rebate of slightly less than 2% of the original loan amount. Practically, the amount of rebate will not hit the maximum possible as there is no guarantee the Singapore stock market can rally 30% from current levels in the near future.

A minimum loan size of $200,000 is required and the package is currently only available to new and existing HSBC Premier customers.

HSBC’s new home loan offer is available until Nov 30. To qualify for HSBC Premier, customers must maintain a total relationship balance of at least $200,000 with the bank.

While this is indeed an innovative idea by HSBC, I am not so sure whether consumers in Singapore are ready for it at this present moment, especially when people are been hurt in the past year by so many structured products that have gone wrong. I am not so sure whether there is a prospectus for this, but I don’t think anyone is about to start reading through a 100-page prospectus for taking up a home loan?

After a flurry of publicity as a result of a case reported in the newspaper about a woman who was slapped with a $17k liability after the loss of her credit cards, the Association of Banks of Singapore (ABS) recently announced steps to limit cardholders liabilities if their cards were lost or stolen.

This change in stand took a while to take place as the initial responses to the report by the ABS and banks did not hint of any changes to the procedures.

With effect from 1st November 2009, credit card holders will have a maximum liability of $100 if their card was lost or stolen. This is provided the loss is not due to negligence or fraud and is reported promptly.

MAS is also looking at the use of some authentication of online transactions using credit cards.

The positive change in policies meant that we are now finally on par with the practices adopted by other developed countries. Well, better late than later.

Kudos to the Straits Times and our other local press for highlighting the matter.

In Singapore, when your credit card is stolen, you will very likely be held liable for the charges on your card before the loss was reported.

This policy is stated in the fine print on the contract that you would have signed when you applied for the card.

Only American Express (Amex) and Maybank have limited liabilities for lost and stolen cards, capped at $500 for Maybank and $100 for Amex.

There was a Straits Times report two weeks earlier about a woman who was left with a $17k bill after she lost her credit cards.

In the US, consumers can simply inform their banks when their cards are stolen and their liabilities would be wiped off. The US Truth in Lending Act has special provisions which limit cardholders’ liability to $50 for fraudulent charges.

Over in Malaysia, their central bank, Bank Negara, limits consumer liability to RM200 (S$82) after a card is stolen.

Moral of the story: Don’t carry too many cards in your wallet. Only carry those that you usually use. Keep the rest of the cards safe under lock and key. And if you don’t really need some of those cards, can consider terminating them.

Recently, Standard Chartered Bank introduced a home loan promotion offering a fixed rate of 1.5% for the first year and SIBOR + 1.35% for subsequent years.

This promotion is applicable for loans (for completed homes) taken up till 15th June 2009 and for loan amounts of at least $100k. The lock-in period is for two years.

In addition, Standard Chartered Bank is also providing one-hour approval in-pincipal, free valuation, free fire and home content insurance for the first year for private properties and throughout the loan tenure for HDB properties.

A legal subsidy equal to 0.5% on loan amount or $2000 (whichever is lower) will also be given.

Starting from 1st March 2009, there will be some changes to the rules for unsecured lending by financial institutions.

Presently, unsecured credit is only available to people earning an annual income of $30,000 or more. The changes will see the minimum requirement reduced to $20,000. The requirement for credit cards remain unchanged at $30,000.

For individuals with an annual income below $30,000, a maximum credit limit of two times the borrower’s monthly income will apply. Those earning $30,000 will see their maximum limit increased to four times the monthly income. The credit limit will be based on an aggregation of all unsecured credit and credit cards held with all affiliated entities of the financial institution.

More information can be found in this announcement by MAS:

MAS Implements Revised Unsecured Credit Rules for Financial Institutions