Property
The Severe Threat of Rising Interest Rates for Leveraged Property Owners
By Lizardo Realm (Investment)  •  January 13, 2015
Interest rates have been unusually low in recent years. From a savings account point of view, this has meant pathetic interests for savings. But on the flip side, from a loaner's point of view, it has been a wonderful thing.


Housing loans in particular have been spectacularly low, enabling many to realise the dream of owning a property. With interest rates dropping, many switched over from a fixed rate to a floating rate loan. One form of this pegs the loan to the SIBOR, especially the 3-month SIBOR or 12-month SIBOR as this provided greater transparency. For instance, 1.75% + 12-month SIBOR rate.

However, interest rates have started climbing and have started to cause a bit of concerns, particularly for those with very high leverage. They may have problem with their personal cashflow if interest rates climb. 

Compounding this is the fact that property values have also started ...
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By Lizardo Realm (Investment)
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