According to the Dow Jones report, the Singapore Interbank Offered Rate (SIBOR) rate has been on a steady upward movement touching 0.67863 percent as of 3 Feb 2015 and experts are expecting the SIBOR rate to reach around 0.7 percent in June this year or even hit 1 to 2 percent at the end of 2015.
What this means to you as a home owner with a variable mortgage rate is:
If the SIBOR rate continues to increase, you need to be prepared with standby cash to pay the higher monthly mortgage. You need to check with yourself:
- How much risk can you take?
- How much longer can you wait?
- What’s the remaining mortgage tenure ? 3 years or more?
- What is your expectation of the SIBOR rate increases at this point?
- How much and how fast will the SIBOR rate increase?
Hence you need to sit down and calculate your current cash flow and obligations and determine if your CPFOA funds and your cash savings on hand can allow you to tackle the increase in your monthly mortgage.
This applies for new purchase of a new property too as the banks apply the new SIBOR rates for the mortgages.
If your risk appetite is low and you prefer certainty on the monthly mortgage, then consider seizing time to re–finance to get a fixed-rate mortgage.
Otherwise you may feel the financial stress or the pinch should the SOR rate or the SIBOR rate in Singapore increases further.
Plus the sourcing of fixed rate mortgage packages and the application process require a bit of your time.
The irony is we can wait to re–finance in a few months time but we may miss the boat to do so as the banks will also revise the fixed rates upwards in the near future.
Call Claire at 8168 7459 today for an obligation-free brainstorming session to help you determine if you need to re–finance your mortgage.
I’ll point you to the mortgage specialists to help you save money on your monthly mortgage payments.
Thank you for reading my post. If you find it beneficial and you had gain clarity on your personal finances, please share this article with the people you care about.
Senior Financial Consultant
CONFIDENTIAL • GUIDANCE • THOROUGH
The HDB version only insures against fire and replaces the 4 walls. It does not cover your furniture or the renovation costs tore-instate your home if it gets destroyed by a fire.
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