Home owners face higher mortgage payments with rise in SIBOR (Singapore interbank offered rate) – a benchmark interest rate on which most home loans are pegged, has been rising gradually which results in higher monthly mortgage payments for some home owners.
The lending rate which is reviewed every 3 months, hiked up to 0.62 per cent on 6 January from previous Friday’s 0.45 per cent. The key drag of a weakening Singapore dollar come from a declining Euro and the stressful expectation of a possible US interest rate hike in the second half of this year. Given the worries over Euro zone, it will add pressure on the Singapore dollar which is likely to remain weak.
It is important that the absolute interest rate remain low, as this translates to elevated, yet sustainable monthly instalments for existing or new home owners. It may be too insignificant to spark any sort of frenzy, it is however wise to lock in for the fixed interest rates while it’s still within the acceptable range.