SINGAPORE - DBS Bank has introduced protection for home buyers against rising interest rates. Called Interest Guard, it is an add-on to existing mortgages and caps the three-month Singapore interbank offered rate (Sibor) at 1 per cent for the next three years. The three-month Sibor rate now at 0.37533 per cent is the key interest rate for mortgages.
"DBS Interest Guard will benefit homeowners who may be committed to an existing mortgage programme and those for whom refinancing may not be feasible given recent regulation changes," the bank said.
The Monetary Authority of Singapore (MAS) has tightened up on home loans to cool the property market, and existing borrowers may not be able to refinance under the latest rules.
There is no commitment period required for Interest Guard and home buyers can opt to have interest rate caps of either 1 per cent or 1.5 per cent for the three-month Sibor over a protection period of two to three years. The monthly cost for adding on the protection starts as low as $5 per month for every $100,000 loan outstanding.
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