Standard Chartered launches “MortgageOne”
A revolutionary all-in-one home loan account

22 May 2008

Standard Chartered Bank (Thai) Pcl. announces the launch of Thailand’s first ever ‘MortgageOne” account, a revolutionary home loan solution that cashflow can be managed under one mortgage account, giving customers more efficient management of their money, owning a home in a shorter period of time and saving on interest cost.

Mr.Yuttachai Teyarachakul, Executive Vice President, Consumer Lending, Standard Chartered Bank (Thai) said “Standard Chartered introduces “MortgageOne”, an innovative home loan that gives customers maximum flexibility in repayment as customers can put their spare cash deposited into the account which will directly reduce their loan outstanding balance, and saving on the amount of interest pay out, while the extra cash can be withdrawn anytime. With the all-in-one MortgageOne account, customers can be relieved of worry in the juggle between mortgage repayment and cash saving.

“In our conduct of extensive market research, findings show that customers share similar concerns, they want to pay off the loan as quickly as possible, to relieve their interest burden, at the same time they also like to reserve some cash on hand in case of emergency. Therefore, the bank has developed a home loan product that can answer all these needs and concerns as we recognize that owning a home is an essential goal for many people and is probably the largest investment to be made in a lifetime,” said Mr. Yuttachai.

MortgageOne account sets a new industry standard with outstanding key features including:

• Efficient cash management – customers can put all their money into mortgage account to reduce loan principal and save on interest cost, while maintain absolute flexibility in withdrawing those extra cash. The extra payment will directly reduce the outstanding loan principal, hence enabling customers to pay off the loan quickly.
• Extra payment option to pay off the loan as quickly as customers can, the extra payments will be directly deducted from the loan outstanding balance
• 24-hour access to available funds for redraw – withdrawals can be done through ATM with a maximum of 100,000 baht per day, free of withdrawal charge
• Increase business opportunity and flexibility – by putting business cash flow into home loan account, every baht paid into the account helps reduce loan principal and interest, while extra cash can be withdrawn at anytime by cheque.
• Payment Holiday – customers can apply for a complete break from paying the installment and use the money for other financial commitment that requires urgent attention

Mr.Yuttachai added further comment on the benefit of MortgageOne that the calculation of interest is on a daily basis over the amount of net balances – loan amount outstanding less the extra cash pay in, which means that each day as the loan amount reduces, interest payable will become much lower.

“At the same time, if customers need urgent cash, they can redraw the extra cash anytime. Thus will help customer relieved of worry whether to keep extra cash on hand or to make extra payment of mortgage loan. The withdrawal of cash can be made anytime without penalty and is not considered a new loan. This special feature makes MortgageOne truly outstanding when compared to conventional mortgage.”

“MortgageOne is the highlight of our home loan product this year. The special features set it apart from existing home loan in the market today. We believe that MortgageOne will attract customers’ interest, respond well to their needs, create market excitement and stimulate higher mortgage demand,” said Mr. Yuttachai.

Example on interest savings benefit of MortgageOne Account

Loan size: 3,000,000 Baht Loan Tenor: 20 years

Interest Rate for conventional mortgage loan: Initial 1 - 3 years fixed rate at 4.79% and thereafter floating rate at MHR – 0.75% (6.40%)

Interest Rate for MortgageOne: Initial 1-3 years floating rate at MHR – 2.25% (4.90%) and thereafter floating rate at MHR – 0.50% (6.65%)

A sum of 200,000 baht is paid into MortgageOne account upon loan drawdown date. This very same amount in the conventional savings account will earn an interest of 1.5% p.a. throughout the loan tenor.

• Total interest payment for conventional mortgage = interest on mortgage loan – interest on deposit (2,097,078 = 2,155,135 – 58,057)
• Interest rate is subject to adjustment by the bank’s announcement. The above example is for reference only.