Homeowners can rest easy, as interest rates will remain low for at least another year, according to economists.
But that also means bad news for savers, who will have to keep looking for higher returns.
The possibility that interest rates may increase was raised after the Monetary Authority of Singapore (MAS) suggested a standard factsheet for banks providing mortgages, intending to emphasise how loan repayments can increase if interest rates move up.
National Development Minister Khaw Boon Wan has also cautioned that interest rates cannot remain low forever.
Interest rates have dropped to record low levels and remained there since the US Federal Reserve reduced its own interest rates to near-zero, in order to strengthen growth in the midst of the global recession.
The three-month Singapore dollar Swap Offer Rate, a famous benchmark rate used for mortgages, lingered at only 0.2 percent yesterday, compared to over three percent five years ago, while the three-month Singapore Interbank Offered Rate (SIBOR) has remained at a record low of 0.44 percent since January.
The low interest rates in Singapore are contrary to the higher rates in the rest of Asia, as central banks have increased rates to fight the higher prices of fuel and food.
However, Singapore has remained the exception, with the MAS using the exchange rate as its monetary policy tool to battle inflation.
As a result, interest rates in Singapore have tended to move closely with the US Fed funds rate.
To contact the journalist, you may send your message to editor@propertyguru.com.sg