factors that could influence the interest rate on your home loan

There are a number of factors that have an influence on the interest rate you are paying for your home loan. Some are external factors (such as the state of the economy) which are beyond your control, while others (e.g. your credit score) you may have some influence over.

Let’s try to understand some of these factors:

Singapore Interbank Offer Rate (SIBOR)

Singapore fixed rate mortgage loans only have a fixed rate for the initial 1 to 5 years. Thereafter, your mortgage loan will most likely be pegged to the Singapore Interbank Offer Rate (SIBOR) or Swap Offer Rate (SOR) plus a spread. For floating rate loans, the interest rate is pegged to SIBOR or SOR since beginning.

This means that at times of low SIBOR, borrowers will benefit from floating rate mortgage loans. However, when interest rates ...