To be more precise, that’s for the Year 1 headline rate.  By now some might have heard about the latest DBS home loan’s National Day promotional package this week which is a 3-year fixed rate package that comes with a free conversion after the first year:

Well, we seemed to have a knack of predicting interest rate trends.  Just last month we said that we will not be surprised to see fixed rates falling back to sub-2% level should US Fed decides to cut rates after FOMC (July 30-31) this month.  What is surprising is that it happened even earlier than the Fed meeting.  We are seeing fixed rate going below 2% for the first time this year, albeit that’s only for the headline Year 1 rate (the average over 3 years is actually 2.08%). And already one other bank has already matched this package and perhaps more banks will follow suit by dropping below 2% next month?  You never know.

What I find most intriguing is that you have many mortgage brokers out there aggressively marketing this package but without telling clients that if you apply for the same package online and direct to DBS, you actually get additional $200-500 in cash rebate (for refinancing cases, up to $3M loan).  This is over and above what you get for the normal cash rebate ($1,800/$2,000) when you apply through a broker.

Wait, you must be wondering why are we telling you this?  Aren’t we also a broker and wants you to apply for this same package through MortgageWise?  Before you run off to DBS website to apply directly, come speak to us first.  We have put together an even better offer for you when you apply through us, which I believe you will agree with us.

This goes to underscore our commitment to all clients since 2014 – we are here to work long term with you and we will always tell you whole-of-market home loan packages, even those where the bank may not be paying us.  We hope and trust that when we abide by this philosophy of always taking care of clients’ interests first, they would reciprocate by supporting the team at MortgageWise even when the going gets tough and some lenders may choose not to pay us occasionally.  We still want to do the right thing.

And remember, only by keeping comparison sites and mortgage brokers in business will there be price competition and lower rates for all homeowners eventually, thanks to the free market.

Finally, a word on falling rates.  It is indeed an anomaly to see headline fixed rates going below prevailing floating rates of average 2.00% to 2.08%.  However, this is not the first time it happened.  The next question we get asked is – how low can it go from here?  With falling fixed rates since the start of the year at 2.58% now dropping to 2.08% for a 3-year fixed rate, it could be a signal that banks who are privy to trends in the interbank market are expecting SIBOR to go even lower in the coming months.  This means two things homeowners could do in a still uncertain market due to trade war.

Either:

• Lock down fixed rates now which may not be too far away from the floor after already falling 50 basis points this year, OR
• Lock down unprecedented low spreads on SIBOR home loans which ensures you will benefit from any continued downward pressure on interest rates due to Fed’s rate cuts in the short term, and for that matter, in long term too when we finally get to a recession at some point.

So, speak to us today to find out how you will always get the best home loan Singapore deals, be it for refinance home loan or new purchase loan when you work with MortgageWise. Besides giving you the lowdown on all packages in the market, benefit from our unique rewards and referral scheme, which includes a special legal fee privilege of paying only $1,800 all-in (inclusive stamp duty & gst) when you buy condo in Singapore and you take your loan through us subject to a minimum of $500,000.  Other terms apply.

Since 2014, MortgageWise.sg has provided thought leadership in the mortgage planning space in Singapore, taking deep dives into the latest developments in the industry, providing useful mortgage tips, and making sense of rate movements.  We seek to build trust with clients over the longer term instead of doing product-peddling for quick one-time deals.  That’s why we always present “whole-of-market” perspective including home loan packages that some banks do not pay us.