More homeowners who took housing loans
from banks are now looking for refinancing options. Loan specialists said they
have been getting more inquiries since the recent spike in SIBOR (Singapore
Interbank Offered Rate).
Homeowners - whose mortgages are tied
to SIBOR - are now facing higher monthly payments. One of those affected is
30-year-old engineer Lai Ming Kwan, who bought an executive condominium with
his wife two years ago and he opted for a bank loan that is tied to SIBOR.
With the benchmark rising sharply in
recent days, Mr Lai is concerned about how it will affect him. He said:
"They predicted that it will stay at 0.3 per cent to 0.4 per cent for a
few years. I did not expect it would go up to so high ... SIBOR is increasing
so fast that my pay cannot catch up with the financing rates."
Both Mr Lai and his wife are working
and have a 16-month-old child.
"Expenses, lifestyles will have to
change a bit because I have to save up more to contribute to the housing loan
... so there'll definitely be an impact, maybe less shopping. With the child
coming up, there is also school fees, childcare fees, so the depletion will
come from my savings. Having a second child will also mean more expenses,"
he added.
Some homeowners, like Mr Lai, cannot
look into other financing options yet because their loan deal has a lock-in
period, which requires them to stick to the same bank for a couple of years.
However, loan specialists said that those whose lock-in periods are up are already
starting to look at refinancing options. This can include looking for a housing
loan with fixed interest rates instead of being tied to one with variable
rates.
One mortgage consultancy said that it
has received many inquiries on refinancing in recent days, about 30 % more when
compared to last year. Mr Sean Lim, the mortgage consultant head at iMoney,
said: "They want to know what is happening in the market ... So they are
taking time to digest and understand what is happening in the market.
"The pace of increment did catch
me by surprise. But it is also half-expected. The trend has been going up
slowly over the last six months. Looking at the market trend, it will continue
to go up."
With interest rates rising, banks can
be expected to review their mortgage rates and plans. Analysts said that
potential home buyers or those who are hoping to refinance their housing loans
should choose a package that best suits their financial needs.
Source: CNA
Just isolated cases of home
owners stretching themselves too thin financially, or a sign of things to
come..?
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