SINGAPORE: Singapore’s largest lender DBS Bank has temporarily removed fixed rate home loans from its website as of Friday (Sep 23).
CNA understands that the local bank is currently reviewing its rates.
This comes after the US Federal Reserve announced a 75-basis-point increase in its benchmark federal-funds rate on Wednesday, mirroring similarly hefty increases in June and July.
DBS was previously offering two-year and three-year mortgage loans that carried a fixed rate of 2.75 per annum.
It also had a two-in-one home loan, which allows borrowers to structure up to half of their loan amount in fixed rates and the remainder under a floating rate package. This was removed from its website as well, based on a check by CNA on Friday noon.
The bank continues to offer floating rate home loans – pegged to either the benchmark Singapore Overnight Rate Average (SORA) or the bank’s six-month average fixed deposit rate – with the lending margins unchanged since its last revision in June.
Other local banks seem to have left their offerings untouched as of Friday noon.
OCBC continues to offer a two-year fixed rate package at 2.98 per cent per annum, alongside floating rate packages pegged to the one-month or three-month compounded SORA plus a per-annum lending margin of 0.98 per cent.
“We review our mortgage pricing regularly and ensure that our pricing packages remain competitive. As interest rates are now on the increasing trend, we advise consumers to review their affordability before committing to their home purchase,” said the bank’s head of consumer secured lending Phang Lah Hwa.
UOB’s website showed a promotional floating rate package linked to the three-month compounded SORA at a margin of 0.7 per cent per annum.
Information about its fixed rate packages is available upon request, according to its website. Based on earlier reports in June, UOB offered two-year and three-year fixed rate packages at 2.98 per cent and 3.08 per cent per annum, respectively.
PropertyGuru Group’s vice-president of PropertyGuru Finance Paul Wee said banks in Singapore “seem to be treading carefully” around their fixed rate packages and are opting for a “wait-and-see” approach.
"Existing packages are now scheduled to be taken off the shelf, with no replacement packages yet. Floating rate packages are still being maintained," he added.
Lenders have been making rapid revisions to their home loan rates this year, as global central banks embark on a rate-hike race to tame inflation. Fixed rate packages, in particular, have seen bigger adjustments.
Some foreign banks suspended fixed rate options earlier in the year due to the rising cost of funds.
The latest announcement by the US Fed marks its fifth rate hike this year, with more increases expected.
“The recent rate hike was expected, as the Fed had signalled that they are going to continue being hawkish until the inflation numbers turn and start trending down,” said Mr Wee.
Further upward adjustments in interest rates in Singapore can be expected, experts said.
“With further upward adjustments in short-term Singapore-dollar interest rates to keep pace with the hawkish Fed, there could be more pressure emerging on property mortgage rates and refinancing costs for corporates going out into year-end and into early 2023,” said OCBC’s chief economist and head of treasury research and strategy Selena Ling.
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CNA understands that the local bank is currently reviewing its rates.
This comes after the US Federal Reserve announced a 75-basis-point increase in its benchmark federal-funds rate on Wednesday, mirroring similarly hefty increases in June and July.
DBS was previously offering two-year and three-year mortgage loans that carried a fixed rate of 2.75 per annum.
It also had a two-in-one home loan, which allows borrowers to structure up to half of their loan amount in fixed rates and the remainder under a floating rate package. This was removed from its website as well, based on a check by CNA on Friday noon.
The bank continues to offer floating rate home loans – pegged to either the benchmark Singapore Overnight Rate Average (SORA) or the bank’s six-month average fixed deposit rate – with the lending margins unchanged since its last revision in June.
Other local banks seem to have left their offerings untouched as of Friday noon.
OCBC continues to offer a two-year fixed rate package at 2.98 per cent per annum, alongside floating rate packages pegged to the one-month or three-month compounded SORA plus a per-annum lending margin of 0.98 per cent.
“We review our mortgage pricing regularly and ensure that our pricing packages remain competitive. As interest rates are now on the increasing trend, we advise consumers to review their affordability before committing to their home purchase,” said the bank’s head of consumer secured lending Phang Lah Hwa.
UOB’s website showed a promotional floating rate package linked to the three-month compounded SORA at a margin of 0.7 per cent per annum.
Information about its fixed rate packages is available upon request, according to its website. Based on earlier reports in June, UOB offered two-year and three-year fixed rate packages at 2.98 per cent and 3.08 per cent per annum, respectively.
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PropertyGuru Group’s vice-president of PropertyGuru Finance Paul Wee said banks in Singapore “seem to be treading carefully” around their fixed rate packages and are opting for a “wait-and-see” approach.
"Existing packages are now scheduled to be taken off the shelf, with no replacement packages yet. Floating rate packages are still being maintained," he added.
Lenders have been making rapid revisions to their home loan rates this year, as global central banks embark on a rate-hike race to tame inflation. Fixed rate packages, in particular, have seen bigger adjustments.
Some foreign banks suspended fixed rate options earlier in the year due to the rising cost of funds.
The latest announcement by the US Fed marks its fifth rate hike this year, with more increases expected.
“The recent rate hike was expected, as the Fed had signalled that they are going to continue being hawkish until the inflation numbers turn and start trending down,” said Mr Wee.
Further upward adjustments in interest rates in Singapore can be expected, experts said.
“With further upward adjustments in short-term Singapore-dollar interest rates to keep pace with the hawkish Fed, there could be more pressure emerging on property mortgage rates and refinancing costs for corporates going out into year-end and into early 2023,” said OCBC’s chief economist and head of treasury research and strategy Selena Ling.
Continue reading...