Not everything that goes up is a good thing. Interest rates have suddenly jumped this year, which can be a rude shock for homeowners accustomed to sub-2 per cent rates the past 20 years.
Bank loans have long been cheaper than HDB housing loans, which are set at a rate of 0.1 per cent over the current CPF Ordinary Account interest rate. But the situation has changed quickly.
The new landscape
The higher home loan rates have inflation to blame. Singapore’s core inflation rate in June rose to a 13-year high of 4.4 per cent from a year ago. Like the U.S., Singapore has been pushing for interest rates to rise to combat higher prices.
Home loan rates offered by the three major banks in Singapore are now around 3 per cent, up from around 1 per cent late last year.
How does it affect me?
For most of us, our biggest buy in our lifetime will be a house. So every cost needs...