The three-month Singapore interbank offered rate (SIBOR) has spiked to an unprecedented rate, well past 0.9 per cent this week – last happened in 2008.
SIBOR – the rate that is indicative of the cost of funds – has a huge impact on local real estate and loans market. Most housing loans are dependent on the three-month SIBOR.
What does it mean to home owners like you?
In plain language, a spike in the three-month SIBOR could mean homeowners paying more on their monthly housing loan payment. For instance, if your current housing loan is S$500,000 with 20 years remaining, the interest rate could increase to 2 per cent or $2,770.
With this development, a possible option that homeowners may consider is refinancing. Unfortunately, for homeowners tied down on a loan’s lock-in period, the increase in SIBOR means higher monthly payments.