Housing Loan Interest Rate Outlook

[Dennis Ng]

You might be wondering what is the outlook for Singapore Housing Loan interest rate.

In my opinion, rates are still on an uptrend. Interest rates on housing loan moved up by about 1% in the last month alone, from about 2.2% to now about 3.2%....why?

The main reason is interbank rates (the interest rates that banks borrow/lend to one another) has gone up from about 2.2% to 3.2% as well.

U.S. interest rates currently is at 4%. U.S. is likely to raise interest rates to at least 4.5%....which might mean that Singapore's rates might still go up as well since U.S is Singapore's largest trading partner.

Cheers!

Dennis Ng, dennis@leverageholdings.com
http://www.leverageholdings.com

[jandiono]

Dear Mr. Dennis,

As youngster, we depends much on Bank Loan on current flat, what if the rate keep shoots up, my q is :

1. Is there any Intervention by Government "AT ALL" about this housing loan? What if those banks suddenly want to increase their shareholders/directors wealth and they increase the rate? Where is Gov role here?

2. If the rate keep skyrocketing, is there any kind of protection for the people like us? What i mean is is there any association, Gov bodies, insurance or whatsoever that will help us to voice out the concern? Or just let the wind blow?

Thanks a lot.

[Dennis Ng]

Dear Jandiono,

will Government interfere on interest rates?

I understand the govt's stand on this is that interest rates are determined by market forces. They will not do anything to restrict on interest rates charged.

Actually, current interest rate on housing loan of about 3% to 4% is not high. I remember in 1990s interest rates on housign loans was about 6% yo 7%. And I'm not sure if any of you know that interest rates on Fixed Deposits in 1980 was as high as 10%.

When inflation is high, interest rates also tend to be high.

Thus, there is no need to get unduly worried about interest rates as I personally do not see interest rates being higher than 4% to 5% in the next few years based on the BIG picture info we have currently.

Cheers!

Dennis Ng

[jandiono]

Thanks a lot Mr. Dennis, appreciate that. Fresh air it is that the outlook is bright ahead. Thanks.

[Dennis Ng]

outlook for high end private residential properties is bright. The same cannot be said of HDB flats and resale flats since there's still 9,000+ unsold new HDB flats.

Bird flu can be very devastating if it really spreads, so if this happens, year 2006 would be negative.

Cheers!

Dennis Ng

[Tristan]

I understand that current interest rate is about 3.2%.

If I borrow money from bank at 3.2% Dec 2005 and interest rate change from 3.2% to 3.8% at Dec 2007,

Will bank charge me at interest rate 3.8% instead of 3.2% on Dec 2007 although the interest rate that we agreed is 3.2% on Dec 2005?

Wait for your reply.

Cheers
Mr. Tristan

[Dennis Ng]

that depends on whether you took up Floating Rate package or Fixed Rate package.

1. if rate is fixed, you not affected.

2. if floating rate, you're only affected if the bank changes the "board rate". Because in your Letter of Offer from bank, it's written as Board rate less "discount rate" to arrive at 3.2%.

Can email to me at dennis@leverageholdings for any further clarification or discussion.

[Tristan]

Thank you, Mr. Dennis.
Appreciate for your quick reply and info.
Have a nice day.

Cheers,
Mr. Tristan

[John]

Dennis,

Where can I find the housing load "board rate"? I have a floating rate package form Citibank and they keep increasing my rates. Thanks,

John

[Dennis Ng]

Dear John,

you asked how do you find Housing Loan Board rate?

My comments:
there's no "standard" Housing Loan board rates. eg. Bank A can have a rate say 4%, while Bank B's board rate can be 5.25%. But that does not in anyway indicat Bank A's package is lower by Bank B by 1.25%. It all depends on how your "letter of offer" (contract from the bank) is worded.

Yes, CITIBANK has adjusted their rates a few times recently. We can actually help you provide an unbiased Housing Loan Analysis which include info on:

1. actual calculation giving you details such as interest cost you pay and we help you filter down to TOP 3 packages in Singapore

2. other terms and conditions, such as penalty period, penalty fee, any restriction on lump sum repayment, free fire insurance etc, would also be provided to you.

basically we don't hide anything from you and provide you a fast and convenient way to assess whether it makes sense for you to refinance your loan.

WE do not charge any fees for our service. We're paid by banks separately. So you got nothing to lose and everything to gain.

You just need to email to us at info@HousingLoanSG.com or call us at 6737 8801 for your FREE Housing Loan Analysis now. You might also like to know that we?re frequently asked by the media for our expert comments on Housing Loan and our website http://www.HousingLoanSG.com is ranked No. 1 by Yahoo search engine for Housing Loans in Singapore.