The two key interest rates in the Singapore mortgage market, which measures the home loan costs, are near their all-time lows. However, borrowers who take out new mortgages may not be better off.
Home borrowers usually benefit when these measures decline, but banks are now responding to the surging property market and riskier economic condition by charging more for loans.
One of the well-known measures – the Singapore Interbank Offered Rate (Sibor) – dropped below 0.6 percent on Tuesday, almost hitting an all-time low of 0.56 percent in June 2003.
Another popular rate – the Swap Offer Rate (SOR) – hit 0.307 percent last Thursday, making it the lowest level in almost a decade, according to data released by Bloomberg.
The rates, which are already low as they track prevailing US rates, fell further last week after the Singapore dollar rose.
Borrowers who expect these loans will follow the two rates down will be disappointed but they can take out loans which follow these measures. Some banks have raised the rates that they charged above SOR and Sibor, making home loans linked to these rates more expensive.