RATE HOME LOANS GAIN STEAM IN SINGAPORE
With higher interest rates looming, borrowers are looking to fixed rate loans for security. The three-month Sibor, or interbank rate, closed at 0.38 percent on 7 October, approximately 12 percent more than its 0.34 percent closing on 9 September.
DBS Bank said 20 percent of new borrowers now opt for a fixed interest rate package, with the first package having been launched in August. The rate since 1 September has been 1.49 percent.
According to a DBS spokeswoman, interest rates will remain low, as the current global economy presents evident risks and uncertainties.
“To give customers peace of mind when it comes to their mortgage repayment, which is a long-term commitment, DBS introduced three-month Sibor floating rate packages with interest rate cap in August,” she said.
“Under this unique scheme, customers benefit from the current low interest rate and at the same time, enjoy certainty if interest rate starts to rise.”
Analysts expect interest rates to rise as the economy slows, which could cause the Monetary Authority of Singapore (
MAS) to delay the appreciation rate of the Singaporean dollar (SGD).
“We expect a slower rate of appreciation of the SGD which means that interest rates will rise relative to the
interest rates,” said Wei Zheng Kit, an economist at Citi, adding that the Sibor could climb 0.5 to 0.7 percent, depending on the US MAS.
Info courtesy - PropertyGuru.com.sg