Fixed Rates Rising Soon?

Very likely. The benchmark 3-month SIBOR has risen to the highest level this year on last Friday 14 July at 1.1369% albeit it has retreated slightly this week but still remaining at levels above 1.10% which is around 15 basis point increase from its previous level. 1-month SIBOR has also risen to new highs of 1.0474% at the same time.

What this means is that the borrowing costs for banks in the interbank market has gone up somewhat. For this reason, we believe that once the banks finish the tranche of funds set aside for currnt fixed rate promotions, they will start to adjust the rate upwards from August. Unless SIBOR backs down from the current highs following a retreat in the US dollar, a result of the failed healthcare bill tabled in the US Senate which dealt a blow to the new President’s agenda especially tax reforms.

No one knows exactly which way SIBOR will go next. What we do know is that there are currently a handful of lenders with very attractive fixed rate promotions starting from as low as 1.45% in the first year! And there could only be a small window left now to take advantage of them. So, speak to our consultants quickly as you would be getting the same deal from the banks, but coming through us, you will enjoy many other benefits from exclusive legal fee discounts from our partner(s) to a token gift of up to $100 shopping voucher on us!

Here are the packages in the market with the lowest fixed rates at the moment:

Rates are not everything as there are many differences between the packages from the legal subsidy or cash rebate given for refinancing cases, to how likely the underlying FDR (fixed deposit rate home loan) peg will move once the fixed term ends. Different banks have differing cost structures in terms of funding and some have much larger loan books attached to certain FDR tranches than others. Speak to our consultants to find out how that might affect you and what else you should look out for. One lender even waives the typical lock-in penalty of 1.50% of the loan amount should one redeems the loan during the lock-in period due to a sale of property. This could be a very compelling feature for investors and those looking to sell especially when the property market recovers in the next few years!

As so many clients who have worked with us can testify (see our testimonials page), the expert knowledge that comes from working with a full-time mortgage consultant can sometimes work wonder in bringing you options previously unaware of. This can range from the benefit of an mortgage interest off-set account, to the structuring of the loan in such a way as to be able to pay off using idle CPF funds should interest rises without incurring any lock-in penalty. Not to mention the service comes free from a mortgage consultant who is paid a distributor fee by the lenders as part of the distribution costs involved. It does not affect the interest rate whether you take it from us or directly from the lender. Feel free to check. In fact we may be able to get you better overall terms from time to time.

So before fixed rates go any higher, take action now and lock down your borrowing costs for the next few year at near historical lows in Singapore!

At MortgageWise, we seek to provide thought leadership in the area of mortgage planning in Singapore, taking deep dive into developments and news on mortgages & helping clients track interest rate movements.  We do not just go for one-time business with clients but rather choose to build long trusting relationships by giving truly independent advice to the extent of losing the deal.  We strive to become the first-choice mortgage partner for homeowners and the creditable distributor of home loan products for banks and financial institutions in Singapore.