Singapore Property | Since January, the rates for fixed mortgages climbed up from 1.7 percent per annum to 2.2 percent per annum during the month of May. By the time June ended, the rate was fixed at 2 percent. These are the figures from iCompareLoan.com. The rates are applicable to loans with that are locked-in from 2 to 3 years.
As of this writing, the floating rates are currently at 1.9 percent since the 3-month Sibor rate skyrocketed to 1.13 percent last September 14. Computing for floating rates will include a 0.8% on top of the existing Sibor 3M. So the question is, should borrowers still prefer fixed rates to floating rates even if fixed rates are actually more expensive?
No doubt that many are leaning on fixed rates since their premium ranges only from 0.1% up to 0.2% compared to floating rates. This means that the borrowers will have the perks of paying for the said rates during their lock-in period of 2 to 3 years. Moreover, fixed rates are better than floating rates since the latter is also affected by the Sibor 3M along with the interest rates in USA.
But can you really save a lot when switching to fixed rates from floating rates? According to MortgageWise.sg, it would greatly depend on how fast or how slow the Sibor 3M would move, as this would directly affect the floating rates. If borrowers would like to spare themselves from higher interest, they have to settle first with fixed rates with the lock-in period of 3 years.
So when you think about getting a loan for your unit at Thomson Impressions at District 20, The Principal Garden at District 3 or the Sturdee Residence at District 8, check first the two options and compare. You should also take note that even if you can save a lot from fixed rate mortgages, there might still be other fees to pay including fire insurance, exit costs, and legal fees to name a few.