Home Loan Interest Rate Up

https://www.businesstimes.com.sg/banking-finance/dbs-raises-2-year-fixed-home-loan-rate-to-275-per-annum-highest-among-local-banks

https://www.channelnewsasia.com/singapore/mortgage-rates-singapore-rise-what-should-homeowners-do-cna-explains-fed-hike-2781191

"Maybank economists Chua Hak Bin and Lee Ju Ye said that with the Fed’s latest dot plot guiding for another 175-basis-point rate hike to 3.5 per cent by the end of the year, the three-month SIBOR could reach 3 per cent at end-2022 and the three-month SORA may rise to 2.75 per cent."

"Singapore corporates and households should brace for a big interest rate shock, as Singapore short-term interest rates will move sharply higher given the Fed’s aggressive rate hikes"

"Mortgage rates could climb to about 4 per cent by year-end – levels not seen for almost two decades. Rising financing costs will likely eat into consumer budgets and cool the property market."

If you look at the following link, the current US interest rate is 1.75%, so based on that DBS home loan increased to 2.75% which is +1% (Note that the projection usually change when it's closer to the FOMC meeting date):

https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Assuming DBS follows the US interest rate and simply +1%:

27 Jul: US 2.5%, DBS 3.5%

21 Sep: US 3%, DBS 4%

02 Nov: US 3.5%, DBS 4.5%

14 Dec: US 3.75%, DBS 4.75%

No wonder they say brace for big interest rate shock.

I take HDB housing loan so this doesn't affect me, for those taking bank loan, better be aware and be prepared.


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