As the Singapore dollar continues to weaken against the greenback following Chinas move to devaluate the yuan, a key benchmark rate thats used to price most of the housing loans here hit a four-month high on Thursday.
The three-month Singapore Interbank Offered Rate (SIBOR) climbed to 0.9388 percent two days ago, and rose further to 0.9345 percent yesterday.
It was reported the banks have yet to adjust mortgage rates pegged to the SIBOR.
Currently, the rates are hovering around 1.5 to 1.7 percent, and may reach two percent by the end of the year.
SIBOR is the rate at which banks loan from one another, and is also the rate at which most home loans are pegged at. An increase in the SIBOR reflects tighter domestic money market conditions and weakness in the Singapore dollar. Weakness of the local currency versus its foreign counterparts can put upward pressure on local interest rates as investors seek more incentive to hold on to the local currency.
I think DBS now got something called the Fix home rate or FHR, which is more stable than sibor. can go check it out
In Channelnewsasia, it was reported that 3-months Sibor will increase from 1.13 per cent to 1.22 per cent by the end of this year, and it is going to continue increasing to 1.75% in one year's time. Analysts have advised that for those people who are concerend about increasing interest rates, they should consider fixed-rate packages. That was exactly what I did. My mortgage loan swells over 2% because of the increasing Sibor and I recently refianced it to 2-years fixed rate package at 1.68% for the first year. I went through mortgage broker who is not tied to any banks, and help consolidates my loan with my neighbours so that there's bigger bargaining power to negotaite for lower interest rates. If you guys are interested, you can drop me a private message. Cheers!