Super-cheap home loans unveiled
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TWO foreign banks operating in Singapore have just unveiled rock-bottom home loan deals in a bid to secure a bigger slice of the fast-growing mortgage market amid record private home sales.
Market observers say it is too soon to say if a full-blown mortgage rates war will erupt - but the latest rates are sure to get the attention of home hunters.
One key factor allowing super-cheap mortgages is the fact that a key interbank rate, which influences consumer loan and deposit rates, is tipped to stay at depressed levels well into next year.
The rate - the three-month Singapore interbank offered rate (Sibor) - is hovering at 0.68 per cent, near the all-time low of 0.56 per cent back in June 2003.
With such cheap funds on hand, HSBC has just launched a mortgage package with an interest rate of Sibor plus 1 per cent throughout the loan term.
This is a steal, compared with its Sibor-pegged loyalty package, with interest rates of Sibor plus 1.3 per cent in the first year, Sibor plus 1.2 per cent in the second, and Sibor plus 1.1 per cent after that.
Customers can save about 7 per cent in interest payments for a loan of $600,000 over 20 years, the bank said.
