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How does the interest rate affect your home mortgage? 

Each month, on top of the principal amount you have to pay off, you are charged a interest rate. There are 2 types; fixed rates and floating rates. 

Fixed rates offer stability, as you pay the same amount regardless of how interest rates fluctuate. It is better for individuals who like to keep their financial commitment consistent. It is also great when interest rates are near all-time lows, that way you can lock in low rates without worrying how interest rates will go in the future. 

Floating rates are pegged to certain specified benchmarks. Going forward, SORA (Singapore Overnight Rate Average) would be the only benchwork for the foreseeable future. You pay the floating rates on top of a fixed Spread, which differs for banks. When interest rates are low, you indeed pay lower, and you will have to pay more when interest rates are high. Individuals who have a positive outlook on interest rates would go for the Floating Rate. 

Not sure how to decide? 

We do offer consultancy services to help our clients choose their best interest rate offer. How do we help you calculate what’s best for you? 

We take these into consideration:

• All current offers from all banks
• Your risk appetite (fixed rate equals fixed commitment) 
• How long you plan to stay in that house
• How long is the lock-in period
• Market conditions and more

If you are not sure how to go about it, schedule an appointment with us. Our discussion is complimentary. We will be happy to help you choose a plan that best suits you.