Abstract:
In this paper we will discuss the trend in mortgage rates in Singapore. The mortgage market is growing. The mortgage rates will increase and so is the borrowing costs.
Singapore Mortgage Rates are likely to increase. Therefore, financing a house may cost more. The consumer banks will force the government to increase the rates further for their loan offerings.
The borrowing costs, specially on the ground of home property, will also increase.
The half yearly interbank rate has witnessed an increasing trend. It is a benchmark based on which the banks fix their deposit rates.
Currently the half yearly interbank rate is almost 40 basis points.
- The floating rates of home loan is now 3.25%. The banks may force the government to increase this rate.
- More customers are now going for investment homes.
- Consumer bankers are receiving more cases where the clients request for second or, sometimes, third home loans.
- Since January 2006, the Citibank extended almost 5 to 10% of the home loan portfolio to several owners who have more than one home.
- Moreover, the Citibank started to offer instant house loan approval facilities through internet to get some space in the competitive market. It also was paying the dividends.
- The fixed mortgage interest rate was 1.61% for one year tenure in 2007.