Tuesday, June 10, 2008

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Mortgage Rate Going Up: Squeeze on Property Market

Here comes another headline for the Singapore property market:

No more cheap mortgages as banks raise rates - Straits Times - 10 Jun 2008

UOB and OCBC Bank have raised rates for their three-year, fixed-rate mortgages to 3.68 per cent from 2.98 per cent. Standard Chartered Bank has raised its rate for its two-year, fixed-rate package to 3.78 per cent a year from about 2.68 per cent.

Both new home loans and existing home loans will see about 1% rise in mortgage rate. This may very well be another deterrent for people to plunge into the property market now, while property sellers on the other hand will be under more pressure to sell their properties.

A new customer will have to fork out about $3,500 more in interest for the first year on a loan of about $500,000, if the rate is raised by 0.7 %.

The question on the minds of home owners is whether this fixed-rate mortgage hike is an ominous signal of an eventual rate hike for all other packages. This may cool the already lukewarm property market further.


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)