rising interest rate

SIBOR Moving Again – Last Chance For 1.38%?

SIBOR has started moving again with 3-month hitting 1.183 (as at 29 Nov) from 1.120 level where it has stabilized in last few months.  Similarly, the 1-month SIBOR has risen from about 1.000 to 1.067.  Will the rise continue as we approach end of the year and US Fed FOMC in December?

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The hike seems imminent judging from the narrative from the incoming Fed chief Mr. Jerome Powell during his Senate Committee’s confirmation hearing of his appointment this week.  He said, “we expect interest rates to rise somewhat further and the size our balance sheet to gradually shrink.”  Powell, a dove, is widely expected to continue on Fed’s current path of gradually increasing rates, albeit coming from a Wall Street background (made his fortunes at private equity firm Carlyle Group) he is more likely to go even slower I believe.  It will be interesting to see how Fed manuoevres under his chairmanship should inflation unexpectedly pick up strongly in 2018-2019 following a successful tax reform bill.

 

Closer to home, our own MortgageWise revised forecast (back in June 2017) for 3-month SIBOR is for it to hit 1.25 to 1.30 range by end of 2017.  With one month to go, we may just hit home run with our forecast given the current 6 basis point run-up and should it continue.  Let’s see.  Incidentally, we have also forecast three rounds of rate hikes by US Fed this year and are looking good on this bet with two hikes already in the bag.

 

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More importantly, as what I have been urging all to do in recent weeks’ blog posts, the banks have been slowly and quietly moving up their rates for both fixed and floating rate packages since start of November, hence do take action quickly to lock down good rates for refinancing, or even purchase.  Local banks are net lenders in the interbank market and they could see and foretell the trends in the money market before everyone else.  As thought leader in the mortgage space, we also monitored the trends closely and started urging our clients to refinance early (even those with renewals early in 2018), and drawing all readers’ attention to what is about to happen.

 

This is why in the longer term, it pays to have a working relationship with a professional mortgage consultant who makes sure you always get the best deal for renewal.  We all need that nudge from someone who will force us to do constant mortgage reviews and that dreadful process of digging out documents for submission.  Much like how we know reviewing insurance coverage and hospital plan premiums are important but we cannot quite get to it.  And we just keep paying the bills that go higher each year.

 

We are here to help.  The good news is for home loans – there is still one lender who could offer a 1.38% FDR home loan (with conditions attached) for the first two years of the loan, but probably not for very much longer.  It is a “deviated” rate or so we are unable to share it with you openly on our website. Do contact us quickly before it ends.

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Know that the prevailing mortgage rate has risen by approximately 20 basis points since start of November to 1.60 for FDR home loans and to 1.40 for SIBOR home loans now.  Fixed rates are also highly recommended for that peace of mind in the midst of a rising interest rate environment in the next few years, especially when you can still find fixed rates (at 1.48%) languishing below floating rates which is an anomaly.  Speak to our dedicated team of mortgage consultants today!

 

Since 2014, MortgageWise.sg has provided thought leadership in the mortgage planning space in Singapore, taking deep dives into the latest trends in the industry, providing useful mortgage tips, and making sense of rate movements.  We aim to build trust with clients for longer term partnership and not just do product-pushing for a one-time deal unlike bankers.  That’s why we always present “whole-of-market” perspective including packages that banks do not pay us.  That’s why many have chosen to work with us in the end notwithstanding the sheer number of brokers and agents out there.  See their testimonials.

 

 

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About Darren Goh

Darren Goh is the Executive Director of MortgageWise.sg, a thought leader in the Singapore mortgage industry, with frequent interviews and quotes by the press - Business Times, Straits Times, Zaobao and EdgeProperty for his views on the latest mortgage trends. He is an avid property investor with careers in banking & real estate before becoming an entrepreneur.
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