The mortgage war in Singapore just started officially a little while ago


Two banks present on the market of Singapore decided that it was time to be a bit more competitive. We are talking about UOB, or United Overseas Bank, and HSBC, who decided to offer mortgage packages with fixed rates over the span of 3 years. Until recently, this was a service provided only by the DBS bank, which is the most significant provider of house loans in the country. Thus, these two banks just started a mortgage war, luring home buyers with very low rates that can be enjoyed for a larger period. Everybody that wishes to buy a home anytime soon is thrilled by the news and it is expected that the market for residential units to grow and flourish in the near future.


The fuss in the home loan market started just recently, when UOB and HSBC officially announced the launch of their mortgage packages, countering this way the offer of DSB with a package of the same caliber. Homebuyers can find a mortgage package for 3 years and with a fixed rate at Bank of China as well, but the difference is that in this case, the interest rates will vary from one year to another. On the other hand, the fixed interest rate in the case of all the other three banks mentioned earlier, is exactly the same, of 1.68% per year, for all three years. The interest rates did drop recently, the appearance of these mortgage packages showing that they are not going to rise anytime soon.

If you were wondering that influenced the rate dropping in Singapore, it is worth knowing that Sibor, the interbank offered rate of Singapore, dropped from 1.13717%, the highest point reached in July, to 1.12283%, where it seems to hover for a while. The second quarter of 2017 brought it the biggest number of house sales since 2013, in the secondary and primary markets as well, with 6,905 units sold. Of course, 2013 has recorded more units sold, 6,945 more precisely, before the ratio framework was introduced toward the end of June, in the same year, for total debt servicing. This year, the number of houses sold indicated an increase, 32.7% being reached during a quarter, in comparison with other quarters, and 51.8% increase per year.


According to HSBC Bank in Singapore, the appearance of the packages with fixed rates appeared due to the high demand for such services coming from home buyers, which wanted to make sure that their interest rates are not going to hike during the first three years. Specialists in this particular field stated that it is a good thing that other banks joined in, allowing home buyers to choose between various offers and advantages and enjoy lower rates. Many people find such packages safer and more reassuring, giving them some peace of mind that their interest rates won’t be affected by the hard-to-predict market fluctuations.


Even so, there are people that consider floating rates a much better option. The experts say that property owners that are considering selling their houses anytime soon or the people that wish to apply for loans that exceed $2 million, plus those that don’t really think the rates will increase too much or none at all, these are the people most likely to opt for floating rate loans. If you ask the specialists, they will say that the current window, created by several banks that provide fixed rates for longer terms, should definitely be used by home buyers, because it allows them to secure their rates, regardless of what will happen on the market, for years to come.






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