Why pay more interest to the bank for your mortgage?
Especially if you have a floating rate mortgage pegged to the SOR or SIBOR rate, please look into re-financing your mortgage while you can as SIBOR rates have increased more than 150% since Jan 2015.
Example to illustrate the effects of a rising interest rate for your floating rate mortgage:
If your current mortgage is a floating rate of 3M SIBOR + 0.75%, then you are paying 1.13908% + 0.75% = 1.88908 % for your mortgage.
Assume a $1m loan for your condo to pay over 28yrs, then the current monthly repayment is around $3834.66.
Say if the SIBOR rates hits 2% in Nov 2015, you would need to pay 2.75% for your mortgage or $4208.33. So potentially, you need to pay $374mth more, on top of the your current mortgage payment, over the next 12 months alone if the SIBOR rate remains at 2%. If the SIBOR rate increases further in 2016, you only pay more interests to the banks.
Yes the irony is, you can choose to “wait and see”.
However the longer you wait, the more uncertainty you would have because the SIBOR rate may increase faster than you expected. Then you might miss the boat as the banks would have increased the fixed rates at the same time.
So it really depends on your risk appetite, your current cash flow, your financial situation and the amount of cash savings you have to tide you over.
I want you to have certainty on your monthly mortgage and help you save money. I have a network of mortgage specialists to help you review your mortgage.
Simply call me at 81687459 and let’s have a conversation to help you save on your mortgage payments.
Re-finance and save money today!
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PS: Gone are the days whereby the banks give us legal subsidy. So please be prepared to use more of your own cash or CPFOA funds to pay for the legal subsidy or appeal to the banks for this subsidy. The important thing is to lock in a suitable mortgage rate for you and you still enjoy overall cost savings in the long run.