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Thread: Interest rates to go up anytime?

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    Default Interest rates to go up anytime?

    Will the interest rates for housing loan goes up by end of this year?

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    Quote Originally Posted by yowetan
    Will the interest rates for housing loan goes up by end of this year?
    i believe so, reason being to tamper the inflation. given that some countries like china, australia etc have already increase their interest rate. i think mostly likely in the second half of this year as the govt had signalled the inflation will be controlled at the later half of the year...

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    No. Singapore don't use interest rate to curb inflation. This is always quoted in the news and is MAS policy. They will strengthen S$ which will result in super low interest rate. Especially SOR. S$ just strengthen so you will expect lower interest rate in the next half of the year. Don't read my post blindly. Go read up on the effect of strengthening S$.

    Hope this helps.




    Quote Originally Posted by yowetan
    Will the interest rates for housing loan goes up by end of this year?

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    Quote Originally Posted by thomastansb
    No. Singapore don't use interest rate to curb inflation. This is always quoted in the news and is MAS policy. They will strengthen S$ which will result in super low interest rate. Especially SOR. S$ just strengthen so you will expect lower interest rate in the next half of the year. Don't read my post blindly. Go read up on the effect of strengthening S$.

    Hope this helps.
    i belive u :-)

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    Quote Originally Posted by thomastansb
    No. Singapore don't use interest rate to curb inflation. This is always quoted in the news and is MAS policy. They will strengthen S$ which will result in super low interest rate. Especially SOR. S$ just strengthen so you will expect lower interest rate in the next half of the year. Don't read my post blindly. Go read up on the effect of strengthening S$.

    Hope this helps.
    In that case, may I know is SOR better than SIBOR for loaning ??

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    Quote Originally Posted by Petertan123
    In that case, may I know is SOR better than SIBOR for loaning ??
    SIBOR is better. Be prepared for interest rates to go up, latest by the second half of this year.

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    Interest rate will probably stay low for another 12 months.
    SIBOR VS SOR

    Singapore Interbank Offered Rate (SIBOR)
    Singapore Interbank Offered Rate is fixed by the Association of Banks in Singapore. It represents the unsecured funds/rates that banks and financial institutions in Singapore lend to each other. Local housing loan interest rates track movements in the Sibor.
    Singapore Swap Offer Rate (SOR)
    Swap offer rate is fixed by the Association of Banks in Singapore. It represents the average cost of funds used by banks in Singapore for commercial lending.
    In Singapore, most banks offer housing loan packages pegged to either SIBOR or SOR, with none offering packages on both rates.
    When taking up a home loan from the bank, you would have to choose between fixed or floating rate packages. And if you make a choice of floating rates, you have to consider taking up a package that is pegged to SIBOR, SOR or rates that fluctuate according to the bank’s board rate at its sole discretion.
    SIBOR is most likely to be more stable as compared to SOR as the latter is influenced by a Forex component, which in the last few years, have been badly affected due to the erratic world economy and international exchange market.
    Although SOR rates have been relatively lower than SIBOR rates for the past couple of months this year (August – October 2009), SOR has gone through rapid movements and at times, has a much higher rate than SIBOR. This makes SIBOR more “stable” for those who are aware of the unpredictable economic changes and on par with market conditions.
    The current world economic environment has impacted our local economy and growth forecast, so to decide on what interest rates you would be comfortable with depends on your knowledge on the property market and economy.
    The decision boils down to your appetite and view on the market in the future.
    If you are buying a property for owns occupation, in a long term, picking a loan with fixed rates or maybe SIBOR-pegged rates would be a better choice for you.

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    Be prepared that when interest rate start to rise from a very low base, property price climb even faster! Somehow, this phenomenon has played out again again for the last >30 years!

    Quote Originally Posted by Geylang OKT
    SIBOR is better. Be prepared for interest rates to go up, latest by the second half of this year.

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    Quote Originally Posted by teddybear
    Be prepared that when interest rate start to rise from a very low base, property price climb even faster! Somehow, this phenomenon has played out again again for the last >30 years!
    Pray tell... how much higher? Property prices have been rising since 2005

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    The rise will be unprecedented over the next 3 years, in tandem with unprecedented money printing press that had already occurred for the last 3 years! There is a lag factor for property prices vs money-printed.

    Quote Originally Posted by Geylang OKT
    Pray tell... how much higher? Property prices have been rising since 2005

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    Quote Originally Posted by Geylang OKT
    Pray tell... how much higher? Property prices have been rising since 2005
    Bro I get this strange feeling you really missed the boat and hoping prices drop big time.... Must be realistic here... Prices maybe high, and might take a breather... But it doesn't mean it will drop unless there is another crisis... So either you wait for another crisis, or look for a property that you like and get in on the action... If younstudy property market from the past... Prices always very sticky when going down.. Even if there is a crisis, the first 6 months of the crisis prices will not drop yet... Ifnthe crisis continues form more than that then prices will start coming off.... And if the crisis ends before tha then price will remain... Thats why property pricesmalways sticky coming down.. Coz there is nine big factor... Cash flow... Once there is rental income to support... No one will sell

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    I think it depends on how fast interest rate rises.

    Example US will raise rates gradually in phases when US economy is doing well and to control inflation. Higher interest rate will slow demand but not sure if enough to crash the market.

    But should there be a crisis in Asia has bad as 97. Money will flow back to the west and interest rate will shoot up to unsustainable level in very short time. That would certainly crash the market.

    I think prices now for mass market is already a bubble. But bubble can continue to inflat for a long long time. Beijing bubble is 800% in 8 years. Wouldnt it be a pity had you jump out at 200% 6 years ago?

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    Quote Originally Posted by AK47
    I think it depends on how fast interest rate rises.

    Example US will raise rates gradually in phases when US economy is doing well and to control inflation. Higher interest rate will slow demand but not sure if enough to crash the market.

    But should there be a crisis in Asia has bad as 97. Money will flow back to the west and interest rate will shoot up to unsustainable level in very short time. That would certainly crash the market.

    I think prices now for mass market is already a bubble. But bubble can continue to inflat for a long long time. Beijing bubble is 800% in 8 years. Wouldnt it be a pity had you jump out at 200% 6 years ago?
    in this financial crisis, the world govt already show u how they stablise the market. Print. Flush the market with cash, force equity to rally. Deal with the inflation later. Japan recently done it again. I double money flow to west n interest rate shoot up scenario will pan out, govt wont let it happen.

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    Quote Originally Posted by CCR
    Bro I get this strange feeling you really missed the boat and hoping prices drop big time.... Must be realistic here... Prices maybe high, and might take a breather... But it doesn't mean it will drop unless there is another crisis... So either you wait for another crisis, or look for a property that you like and get in on the action... If younstudy property market from the past... Prices always very sticky when going down.. Even if there is a crisis, the first 6 months of the crisis prices will not drop yet... Ifnthe crisis continues form more than that then prices will start coming off.... And if the crisis ends before tha then price will remain... Thats why property pricesmalways sticky coming down.. Coz there is nine big factor... Cash flow... Once there is rental income to support... No one will sell
    Bro.... I have been investing in properties since 2001

    And I have not sold them throughout these years (thankfully!) as the prices have been rising frenziedly - especially the past couple of years. So now it is an opportune time to take some money off the table first.

    Also several new condos have been popping up and more and more are being built, so my realistic take is that my rental yields are going to come down more and more in the coming years due to the aging projects and now that the tenants have way more choices.

    So yes, definitely with a view to selling one of them very soon. The profits to be realised are just way too tempting! (in fact started advertising already)

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    Quote Originally Posted by AK47
    I think it depends on how fast interest rate rises.

    Example US will raise rates gradually in phases when US economy is doing well and to control inflation. Higher interest rate will slow demand but not sure if enough to crash the market.

    But should there be a crisis in Asia has bad as 97. Money will flow back to the west and interest rate will shoot up to unsustainable level in very short time. That would certainly crash the market.

    I think prices now for mass market is already a bubble. But bubble can continue to inflat for a long long time. Beijing bubble is 800% in 8 years. Wouldnt it be a pity had you jump out at 200% 6 years ago?
    Agreed that prices are climbomg and will continue to do so until a crisis strike. S'pore just set a record against greenback so inflation is slowed down.

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    Quote Originally Posted by Geylang OKT
    Bro.... I have been investing in properties since 2001

    And I have not sold them throughout these years (thankfully!) as the prices have been rising frenziedly - especially the past couple of years. So now it is an opportune time to take some money off the table first.

    Also several new condos have been popping up and more and more are being built, so my realistic take is that my rental yields are going to come down more and more in the coming years due to the aging projects and now that the tenants have way more choices.

    So yes, definitely with a view to selling one of them very soon. The profits to be realised are just way too tempting! (in fact started advertising already)
    bcoz u feel ur geylang apts cant fetch gd rental in future?

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    Singapore Swap Offer Rate (SOR)
    Swap offer rate... It represents the average cost of funds used by banks in Singapore for commercial lending
    Just want to correct this. This is incorrect. The above quote is most likely from one particular website, and are being quoted in many places/forums and almost "becoming a fact" (btw reminds me of someone )

    SOR is a hybrid benchmark quote that are heavily influenced by USDSGD forward rate. An appreciating SGD plus low US rate implies low SOR. It's also volatile by definition because of the fx involved.

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    Why go up so fast? Care to share?
    Quote Originally Posted by Geylang OKT
    SIBOR is better. Be prepared for interest rates to go up, latest by the second half of this year.

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    SOR better than SIBOR for next one year?
    Quote Originally Posted by amk
    Just want to correct this. This is incorrect. The above quote is most likely from one particular website, and are being quoted in many places/forums and almost "becoming a fact" (btw reminds me of someone )

    SOR is a hybrid benchmark quote that are heavily influenced by USDSGD forward rate. An appreciating SGD plus low US rate implies low SOR. It's also volatile by definition because of the fx involved.

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    Are you interested in a FH landed corner terrace with land areas of 3900 sqft and a plot ratio of 1.4 (can build up till 3 storey). Asking is 2.60mil. Not a bad place.
    Quote Originally Posted by devilplate
    bcoz u feel ur geylang apts cant fetch gd rental in future?

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    Quote Originally Posted by DC33_2008
    SOR better than SIBOR for next one year?
    SOR is probably better over the next 1 year or even less but again anything can happen....

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    Quote Originally Posted by teddybear
    Be prepared that when interest rate start to rise from a very low base, property price climb even faster! Somehow, this phenomenon has played out again again for the last >30 years!
    This time, it will be different.

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    Quote Originally Posted by patricia
    This time, it will be different.
    How different? Care to explain?

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    This interest rate question is best answered by Uncle Sam's Ben.

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    It is the safest to take any package ie. sor or sibor WITHOUT LOCK-IN. BUC has limited choice compared to completed project.

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    Quote Originally Posted by ysyap
    How different? Care to explain?
    As the interest rate starts from low base and in order to be able to range in the inflation, the interest rate has to be raised with fury. This will cause alarm and panic will set in. Lots of people will be caught off guard.

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    Can Federal do that overnight given the situation in US? Do you think MAS will depreciate SGD against US$?
    Quote Originally Posted by patricia
    As the interest rate starts from low base and in order to be able to range in the inflation, the interest rate has to be raised with fury. This will cause alarm and panic will set in. Lots of people will be caught off guard.

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    Quote Originally Posted by DC33_2008
    Can Federal do that overnight given the situation in US? Do you think MAS will depreciate SGD against US$?
    They must do it if the interest rate rear its ugly head in the near future. It is already rearing its ugly head in euro. QEII is coming to its end. They are talking about exit strategy. Inflation is not going to gently increase. It will come in fast and fury. The Federal has no choice if they want to prevent high interest rate expectation.

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    But they are still printing money and more money coupled with the bad home loan and even forgery in the home loans.
    Quote Originally Posted by patricia
    They must do it if the interest rate rear its ugly head in the near future. It is already rearing its ugly head in euro. QEII is coming to its end. They are talking about exit strategy. Inflation is not going to gently increase. It will come in fast and fury. The Federal has no choice if they want to prevent high interest rate expectation.

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    Quote Originally Posted by DC33_2008
    But they are still printing money and more money coupled with the bad home loan and even forgery in the home loans.
    As I said, printing money (QEII) is coming to an end soon (this June). After printing money for so long, when the interest rate rises it will not be a gentle rise. Compare with euro, the US irresposible printing of money will beget much more difficult and uncontrollable interest rate problem. After trying to solve ( without fully successful) their housing/employment problem for so long and there is a new and urgent interest rate expectation problem, the federal will have to pay more attention on the the latter. The FED will not want to be seen creating new problem without actually having solved the old problem. So they must tackle the new problem at the expense of the old problem. Otherwise, they will be accused of having created high interest expectaion and yet did not solve the housing/employment problem at the same time. The old problem ( housing/employment) can remain and said to be thrusted upon them. They cannot shed reponsibility for the new problem ( high interest rate expectation) if it get our of control.

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