Mortgage rates in Singapore on the way up

[Amber Woods]

Mortgage rates in Singapore on the way up

29 March 2013, The Straits Times by Esther Teo
Mortgage rates here are on the rise and could continue climbing as funds grow tighter.

Many banks have them pegged to a key banking industry rate also known as the Singapore interbank offered rate (Sibor), the rate at which banks lend to each other.

Last year, that rate was Sibor plus 0.8 to 0.9 per cent but it rose to Sibor plus 1.15 per cent earlier this month, a Barclays report this month noted.
The Sibor has been hovering around 0.37 per cent to 0.38 per cent in recent weeks.

This hike could be partly due to Singapore’s current very high level of credit as measured by the loan-to-deposit ratio, which at 97 per cent is at its highest level since 1999, Barclays analyst Sharnie Wong noted in the report.

This tightening has led to competition for deposits in recent months and some banks have already hiked mortgage rates by 25 to 35 basis points, she noted.

[bakasa2002]

Float went up to 1.15?

[DC33_2008]

So recent and subsequent propeety buyers are whacked by higher spread, absd, Spsf, smaller area, etc.

[sherlock]

In reality buyers should have taken all these into consideration when they make their purchases. If they did not and cannot stomach the rise, good luck to them

[RCT]

If cannot stomach this type of increase in interest then too bad...

[star]

These increase are peanuts. Still much lower than HDB loan.

[phantom_opera]

These increase are peanuts. Still much lower than HDB loan.

ha ha ha ... exactly

Picasso painting transacted at 1亿5500万美元 (约1亿9530万新元)，改写毕加索作品记录。

[DC33_2008]

Capital aprpreciation will not like our parents with at least a few times of their original purchase price. Nett Rental yield will not be more than 6% for new development with all higher expenses and price. It is good for investors to know all their expectations and constraints.

[phantom_opera]

Capital aprpreciation will not like our parents with at least a few times of their original purchase price. Nett Rental yield will not be more than 6% for new development with all higher expenses and price. It is good for investors to know all their expectations and constraints.

net rental yield 6%?? where to find? I am happy with 4% capital appreciation and 3% yield compound per year it is also the reason why it is hard to promise > 5% pa return for long term insurance or CPF

remember, even if inflation compound at 2%pa, it will look like this after 200y:

[DC33_2008]

Cannot find now as most of them have been found.

net rental yield 6%?? where to find? I am happy with 4% capital appreciation and 3% yield compound per year it is also the reason why it is hard to promise > 5% pa return for long term insurance or CPF

remember, even if inflation compound at 2%pa, it will look like this after 200y:

[phantom_opera]

compounding is the 7th wonder of the world ... the secret is consistency loh, CPF 4% compound a bit low, if 5% will be good enough for 30-40y onsistently



something $2 will cost $7.5 after 25y

[smellyfish]

hmmm late jan was still 0.8 + 3M SIBOR, at least for under construction

[teddybear]

Now you can understand why 7% GST has significant impact on the inflation! When GST < 7%, hardly hear any complains about the inflation!

Imagine that the whole supply chain from one hand to another.. it's a compounding effect. Everyone thought they can claims back the GST if they are not selling directly to the consumers but little did the comsumers know that there are additional costs incurred for every hand due to GST because they need to hire people to administer the GST claim back and thus incurred costs for administration. I tell u, when they claim back GST, they still pocket the money (some if not all 7%, i believe some all) treat that as their administration cost. Of course, 7% cost will pass down the supply chain, from one hand to another hand and add again 7% and then pass down to another hand and the cycle goes on and on and finally to the consumers.....
Everyone is screaming now

compounding is the 7th wonder of the world ... the secret is consistency loh, CPF 4% compound a bit low, if 5% will be good enough for 30-40y onsistently



something $2 will cost $7.5 after 25y

[leesg123]

Cannot find now as most of them have been found.

still have lah. mm lor. if mm can be found at $700k, and rent $2500 per mth, 4.2% gross yield.

[newbie11]

Float went up to 1.15?

1.25 is the norm

As usual, ST report is delayed.. I been blogging about increase..

http://findahomeloan.sg/component/k2...ome-loans-2013

[sgbuyer]

These increase are peanuts. Still much lower than HDB loan.

Yeah, but hdb is much cheaper and also cost less to maintain.

[teddybear]

Your HDB flats have zero facilities, why still need to pay maintenance fee to maintain what?!

Yeah, but hdb is much cheaper and also cost less to maintain.

[sgbuyer]

Your HDB flats have zero facilities, why still need to pay maintenance fee to maintain what?!

Many apartments also no facilities, but maintenance few hundreds a month.

[heehee]

You make a very good point : never ever buy an apt with little to no facilities!

Many apartments also no facilities, but maintenance few hundreds a month.

[sgbuyer]

You make a very good point : never ever buy an apt with little to no facilities!

If you think about it. The extra interest from HDB loan is offset with the maintenance.

The other intangible and under-rated benefit is the peace of mind. Having a peace of mind, able to sleep at night may extend your healthy life by another 5 years. How much will you pay for being healthy for another 5 years?

Ng Teng Fong for all his billions is not rich enough to extend his life by another 1 month.

[indomie]

If you think about it. The extra interest from HDB loan is offset with the maintenance.

The other intangible and under-rated benefit is the peace of mind. Having a peace of mind, able to sleep at night may extend your healthy life by another 5 years. How much will you pay for being healthy for another 5 years?

Ng Teng Fong for all his billions is not rich enough to extend his life by another 1 month.

Everybody has a different strategy to live their life. In my mind if u are striving for the best or striving for less, the effort is the same. Being a surgeon or a carpenter is equaly hard, but a surgeon pays better.

Learn how the economy work, it may take more than a little effort. But it well worth it. To shun the complexity of making money for a simple life is not a good idea.

[sgbuyer]

Everybody has a different strategy to live their life. In my mind if u are striving for the best or striving for less, the effort is the same. Being a surgeon or a carpenter is equaly hard, but a surgeon pays better.

Learn how the economy work, it may take more than a little effort. But it well worth it. To shun the complexity of making money for a simple life is not a good idea.

It's not enough to know just about the economy. Politics is just as important. The Russians that lost money in Cyprus didn't watch politics.

Watch Barack Obama, as the decisions he makes can override what the PAP does. Watch how he taunts young Kim. Will the young Kim fall for his trap?? Can the Chinese restrain him this time round?

Warren Buffett is the good friend of Obama, watch what companies he invests in - Wells Fargo, Bank of America, General Motors, Heins. Did he buy Singapore or China properties?

[teddybear]

Well said. That is why staying in a condo estate with small number of units and with security guards give me peace of mind and live longer. The maintenance fund paid for security and facilities also provide me access to greenery and exercise in gym, swimming etc to have a healthy life.

Living in a condo estate with very large number of units, even if have security guards also useless, the guards can't remember everybody living in the estate, and they will slack and won't check on people going in and out of estate!

Imagine apt with no security guard, and HDB flats where you get O$P$ accidentally splash on your windows and doors or because somebody use your address to borrow from loan shark!

If you think about it. The extra interest from HDB loan is offset with the maintenance.

The other intangible and under-rated benefit is the peace of mind. Having a peace of mind, able to sleep at night may extend your healthy life by another 5 years. How much will you pay for being healthy for another 5 years?

Ng Teng Fong for all his billions is not rich enough to extend his life by another 1 month.

[lionhill]

It's not enough to know just about the economy. Politics is just as important. The Russians that lost money in Cyprus didn't watch politics.

Watch Barack Obama, as the decisions he makes can override what the PAP does. Watch how he taunts young Kim. Will the young Kim fall for his trap?? Can the Chinese restrain him this time round?

Warren Buffett is the good friend of Obama, watch what companies he invests in - Wells Fargo, Bank of America, General Motors, Heins. Did he buy Singapore or China properties?

Agree that politics must be considered for investment.


But your example of Buffet is biased. Every giant investor has its own strategy. China's property prices have at least tripled in the last 20 years, have you ever seen Buffett bought them when China's property price was low?

Buffet does not buy Chinese Property directly, how about the USA banks that he has bought? they have bought and Capitaland is still developing hounses and malls in China...

The properties in Singpaore do look expensive. but who knows whether it will go even higher given the huge amount money printed everyday?

[starrynight]

Really goes to show that we cannot believe the BS we read in the papers. I spoke to some friends who bought apartments in the past few weeks (including 1 this week), and everyone confirmed that they are still getting loans for 3-month Sibor + 0.85% from DBS.

Mortgage rates in Singapore on the way up

29 March 2013, The Straits Times by Esther Teo
Mortgage rates here are on the rise and could continue climbing as funds grow tighter.

Many banks have them pegged to a key banking industry rate also known as the Singapore interbank offered rate (Sibor), the rate at which banks lend to each other.

Last year, that rate was Sibor plus 0.8 to 0.9 per cent but it rose to Sibor plus 1.15 per cent earlier this month, a Barclays report this month noted.
The Sibor has been hovering around 0.37 per cent to 0.38 per cent in recent weeks.

This hike could be partly due to Singapore’s current very high level of credit as measured by the loan-to-deposit ratio, which at 97 per cent is at its highest level since 1999, Barclays analyst Sharnie Wong noted in the report.

This tightening has led to competition for deposits in recent months and some banks have already hiked mortgage rates by 25 to 35 basis points, she noted.

[Kite]

Then why DBS quote me 3mth Sibor + 1% for 5 yrs lock in? I just called last week to enquire.

[phantom_opera]

TS ... are u aware that POSB now offering 10y SIBOR+1.38% capped at CPF OA rate?

For certain bank like DBS, the problem is cannot lend out

[starrynight]

Urs is +1.0% for all 5 years?

My friends and I all got +0.80 / +0.85% for 3 years, and then +1.25% thereafter, with no lock in.

Just for enlightenment, why would you want 5 years lock in?

Then why DBS quote me 3mth Sibor + 1% for 5 yrs lock in? I just called last week to enquire.

[sabian]

Urs is +1.0% for all 5 years?

My friends and I all got +0.80 / +0.85% for 3 years, and then +1.25% thereafter, with no lock in.

Just for enlightenment, why would you want 5 years lock in?

ANZ is offering Sibor/SOR average + 1% for entire loan tenure with no lock-in.

Seems POSB offer isn't that attractive.

[Kite]

Urs is +1.0% for all 5 years?

My friends and I all got +0.80 / +0.85% for 3 years, and then +1.25% thereafter, with no lock in.

Just for enlightenment, why would you want 5 years lock in?

That's why I didn't tke it up. Didn't hear about their +0.8 deal.

If interest rates are expected to stay low, why take ANZ 1% now? take the lower spread and then refinance. Isn't that a better idea?