Yahoo Finance 
Banks Cut Mortgage Rates As Fed Stalls Rate Hike: Good Time To Refinance Your Homes?
This article was originally on GET.com at: Banks Cut Mortgage Rates As Fed Stalls Rate Hike: Good Time To Refinance Your Homes?
As a result of the US Federal Reserve's decision two weeks ago to maintain its federal funds rate at 0.25% to 0.5%, local benchmark interest rates for Singapore Interbank Offered Rate (SIBOR) and Swap Offer Rate (SOR) have fallen to 1% from 1.25% in January this year, and 0.94% from 1.36% in March respectively, making mortgages cheaper for borrowers.
Major banks and financial institutions like UOB, OCBC and Hong Leong Finance have reportedly lowered their rates by 0.10% to 0.20% for both fixed and floating rate home loans.
For example, the lowest two-year fixed rate home loan has dropped to about 1.65% now and the lowest three-year fixed rate home loan is currently priced at about 1.8%, from about 1.9% and 2% earlier this year.
Market watchers are expecting that the rates will likely remain at its current level or may go even lower following the financial markets uncertainty as a result of Brexit. The next time the Federal funds rate hike is expected to occur will only be in early 2018.
What this means for current homeowners paying off their mortgage or future homeowners who have yet to apply for a home loan, is that SIBOR and SOR home loan packages could be attractive if the benchmark rates continue to fall as a result of the holding off or even cut in the Federal funds rate.
As banks' fixed deposit rates typically follow SIBOR, home loan packages pegged to the banks' fixed deposit rates may potentially come down too.
While such floating rate home loans could look enticing in the near to medium term, in this highly uncertain market environment, risk-averse individuals might be better off sticking to fixed rate home loans which are less volatile, or consider home loans without a lock-in period which gives greater flexibility in switching of the loan package.
At the end of the day, it all boils down to the individual's risk appetite and financial circumstances in choosing a suitable home loan package that will minimise one's interest payment and financial obligations especially in this volatile market.
Keen To Find A Home Loan?
With both the fixed and variable home loans facing a price cut, now would be a good time to look into refinancing your home loan or apply for a home loan. Before you do any of that though, here are 4 things you should consider when choosing a home loan.
You can use a home loan comparison site like GET.com to see the latest home loan packages from all banks in Singapore.
Here you can compare DBS home loans, UOB home loans or OCBC home loans, amongst a total of 14 financial institutions in Singapore in just seconds.
What do you think? Share your comments with us below!
GET.com Singapore is Singapore's lifestyle and personal finance website. We help you GET more for your money - food, travel, home loans, credit cards, shopping - everything!
Like GET.com on Facebook and sign up to get the HOTTEST stories delivered to your inbox!
For serious stuff, you can compare home loans, personal loans and credit cards at GET.com.
Our free GETdeals™ App helps you get the best credit card discounts near you for dining, shopping, lifestyle and more. Download it today!
Other Articles You May Like From GET.com
Compare DBS Home Loans
Compare UOB Home Loans
