Higher fixed rates for home loans

Higher fixed rates for home loans

SINGAPORE - Home buyers seeking fixed interest loans to cushion themselves from the effect of an expected rise in global interest rates will find that some banks have already hiked their offers.

On Monday, Maybank raised its three-year fixed rate for a mortgage by 0.1 percentage point while ANZ lifted its two-year rate by 0.17 percentage point, industry players noted.

Some other banks appear to have pulled their fixed-rate packages off the shelf. The Straits Times understands that Citi used to offer a fixed-rate loan but stopped officially offering fixed-rate mortgages last month.

Standard Chartered also no longer offers fixed-rate mortgages.

Maybank's rates now start at 1.25 per cent for the first year and average out to around 1.4 per cent over three years, which are among the lowest in the market, while ANZ's two-year rate rose from 1.48 per cent to 1.65 per cent.

Still, the higher rates are not biting deep as yet. For an owner with a 30-year mortgage of $1 million, an increase from 1.15 per cent to 1.25 per cent translates to only an extra $50 or so in monthly repayments. Banks declined to comment on the rate increase.

Financial markets have been rattled by recent statements by the United States Federal Reserve chairman Ben Bernanke - who testifies in the US again tonight - that a massive US cash stimulus may be eased later this year.

With the prospect that this may result in rising rates, the Monetary Authority of Singapore last month moved to introduce curbs over property loans to partly counter the risk of borrowers overstretching themselves.

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