In Singapore, it is common for homeowners to refinance their home loans every few years in order to secure the lowest available interest rates. However, in the past few months SIBOR rates have reached their 10-year high, which might worry those homeowners that may be considering refinancing their loans. In this article, we present key factors for these individuals to explore when considering whether they should refinance in current interest rate environment.
Why Refinance in the First Place?
Individuals that have passed the lock-in period of their home loan may want to refinance their mortgage in order to obtain a lower rate and thus reduce their total cost of borrowing. Because banks tend to offer competitive home loan refinancing rates in order to attract new customers, individuals may be able to save money by refinancing. Even switching to a slightly lower interest rate can result in significant savings. For example,