It might even fall below that!

If that sounds too good to be true, let’s just say that clients who came to us back in 2019 managed to secure just that as they paid mortgage rate of only 0.50-0.60% all-in from 2020 to 2021!  Had it not been for the sudden spike in inflation and the subsequent rate hikes by Fed, they might still be paying that and laugh all the way until this day.

Now, there’s a chance for history to repeat itself. Would you want to be that lucky few?

Cycles are called cycles for a reason.  As we start off September with the widely-expected rate cut penciled in sometime in the middle of the month, we see a similar pattern taking shape right now – not many are aware that SORA* has crashed below 1% (speak to us to find out more)!  Those who dare wins.

At the same time, inflation is starting to show signs of uptick in the U.S. in recent months with core PCE (the Fed’s favourite measure for inflation) rising steadily from 2.7% in May, to 2.8% in Jun and 2.9% in July (see chart below).  The next few months’ data might prove to be consequential.

(Source: Trending Economics)

Most economists are now watching to see if price increases due to tariffs are one-off and thus will pass through, or is it more likely a case of gradually-rising prices through the year as companies continue to pass the higher costs to consumers over time?

At the same time, you have an unpredictable U.S. President breathing down their neck, what will the Fed do in a catch-22 situation with rising prices alongside weakening labour market, all that whilst fending off political pressure coming at them from all directions?

Fed has to put on a great balancing act.  The same can be said of home owners in Singapore.

After being scalded by high mortgage interests of the last four years, something not seen in more than a decade, is it wise to be tempted with a free-falling SORA and commit yourself to a floating rate mortgage and get locked in for next two years minimally?  Throw all caution to the wind?

Or is it wiser to stick to that defensive instinct which most started with when reviewing their mortgages – stay for a fixed rate to stay watch, at least for the time being?  After all, fixed rates have fallen so much from its peak of 4.25% to the current 1.65-1.88% depending on your loan balance.  Surely, there can’t be much downside to go from here.  You’ll be safe whilst you observe how inflation and tariffs finally play out over the next two years.

If you have a mortgage loan to review within the next few months, how can you achieve that finest of balancing act to position yourself such that you can profit from the interest cycle?

This is what we do best at MortgageWise, having operated for the past 11 years and helping clients navigate successfully through more than a few peaks and troughs in the interest cycle – choosing the right mortgage loan is not just about picking the lowest headline number, That’s like choosing within a dot on the interest cycle!

Rather, it’s about how to best position your mortgage to profit from the direction of move on this dot, yet hedge any upside risks with “safety features”.  Speak to our consultants for what’s the best strategy to achieve that.

Finally, why do I say this is your last chance to secure possibly 0.85% (or even lower) mortgage rate by 2026?  Let me come to the most important point in this article.

By 2026, you’re not going to find 0.85% anywhere in the market.  Banks are not going to offer that which compresses their NIM (net interest margin) further.  The time to lock that rate down is always before SORA hits rock-bottom, which is anytime now before Fed officially resume its cuts. Take action fast.

At MortgageWise, we help clients navigate through the myriad of mortgage rates quick and fuss-free and get you the best home loan Singapore! Be it for residential or commercial property loan, work with us today and you’ll also be helping to support our social cause!

So, be it for residential or commercial property loan. Work with us today and you’ll also be helping to support our social cause!

Stay tuned for rate alerts on our Telegram channel SG Mortgage Rates.

*daily spot SORA which is the underlying peg that 1-month and 3-month SORA averages.

Disclaimer: MortgageWise Pte Ltd is not in the business of providing financial advice nor are we licensed or regulated by MAS under the Financial Advisory Act (FAA) in Singapore. All information presented are opinions and any representations given, whether by way of example, illustration or otherwise, are purely portfolio allocation advice and not recommendations or inducements to buy, sell or hold any particular investment product or class of investment product.  All opinions are generic in nature and are not tailored to the particular circumstances of any reader.  Seek advice from a qualified financial advisor before making any investment decision.

Though every effort has been made to ensure the accuracy of the information and figures presented, we make no representations or warranties with respect to the accuracy or completeness of the contents in this blog and specifically disclaim any implied warranties or fitness for a particular purpose.  We shall not be held responsible for any financial loss or any other damages suffered whatsoever, directly or indirectly, if you choose to follow any of the advice or recommendations given in this blog.