With interest rates dropping, bank savings rate is NOT going to rise.
Singapore Savings bond rates have in fact dropped.
But what's good? Mortgage rates have dropped too!
Latest Sibor rates 21April2020
Latest 3M Sibor as of 21April2020 is 0.98859% only!
This is like half of what it was in July2019 when interest rates where climbing...
With such a plunge, it absolutely makes sense to "refinance" or "re-price" your mortgage.
Before that, "refinancing" means you find a new bank to loan you. There are costs in valuation (around $500) and cost in conveyancing legal fees (around $2,500).
"Re-pricing" on the other hand is sticking with the same bank BUT with a new mortgage package. NO fees are involved.
Description of some of the latest packages I've seen
This portion is from a recent private client of mine and the numbers are purely for education purpose. Mortgage packages can change and new offers come onto the market all the time.
Floating package for completed HDB/EC/Private with min loan amount of $80,000 by UOB
Year 1: 0.63%p.a + 3M sibor
Year 2 and onwards: 0.63%p.a + 3M sibor
At current 3M sibor, total rates are ONLY 1.618%p.a.
Before I dive onto the fixed package (which is pretty good in my opinion), would like to invite you to my youtube finance community here too!
There will be weekly sharing on investment ideas and financial strategies
especially with this pandemic going on currently.
Ok back to low mortgage rates now, check this out!
Fixed package for completed HDB/EC/Private with min loan amount of $100,000 by CITIBANK
Year 1,2,3: 1.38%p.a FIXED
Year 4 and onwards: 0.75%p.a + 1M sibor
Pretty good right? Both of these packages are significantly cheaper than my current OCBC one but I'm still not eligible to change out yet.
Saving on mortgage can help you save on your cashflow so do address it when you are eligible.
Some key points to note
- Start by asking your current bank on "re-pricing" options first simply because fees would be lesser (or waived in some situations). Do call in to check first.
- If you are on HDB loan and confident you can complete payment within 10years, then consider bank mortgage packages. If not HDB loan is fine.
- Examine penalties such as partial repayment, full repayment penalty and lock-in periods.
- Compare more than just the rates such as ask on legal subsidies.
Look for a qualified mortgage consultant.
But if you don't have one, I'd happily refer my contact to assist you.
Last updated on May 4th, 2020 at 05:44 pm