I generally do not post anything “personal finance” related on this site as frankly I do not have the expertise offered by some of the other sites out there. But I am taking a big loan in the near future and thought I should do some data-driven research, and maybe share my findings and get feedback from other “lao cheows” out there. I will ignore BUC and other weird loans as I am just taking a home equity/term loan against a fully owned, completed property.
Observations
- The housing loan market in Singapore is all floating rate. (The Singaporean idea of a “fixed rate” loan is apparently simply fixing the rate for only two years, beyond which the loan floats. Over a typical 30 year lifespan, this means that a “fixed rate” loan actually spends an equal-weighted 93% of its life floating. Of course, the first few years have disproportionate impact in that ...
Though the ‘in-thing’ is floating, I would not personally recommend floating rates.
I don’t have a crystal ball but given the fact QE2 is ending and there is indication that the US Fed may be raising rates soon (Q4 2011 or Q1 2012), fixed rates would be an option!
You may consider fixed rate loans of 2,3 or 5 years. This will assist you to budget for the tenure chosen, thus a peace of mind. Afterwhich, you may wish to look around for rates again!
Please feel free to contact me if you have any other problems or questions.
As QE2 will end soon in the US and there are indications that they’ll probably raise rates (my speculation Q4 2011 or Q1 2012), Singapore might follow!
Fixed rates housing loan is an option. There exists 2, 3 or 5 years fixed rates.
Please feel free to contact me if you need further assistance.