Property analysts believe that further increases in mortgage rates are on the way, especially after the United States Federal Reserve announced itsThe relatively sudden spike in the cost of borrowing money has led analysts and banks to warn home-buyers to set aside sufficient savings as a"buffer" and to seek new loan packages or arrangements if necessary.
Sibor and Sora are benchmark rates that are used, for example, by banks here to set some mortgage rates for property buyers. But earlier this year, as economies around the world opened up, and people started spending more money, central banks raised interest rates so as to slow demand and take pressure off prices.
"Some banks have been adjusting the interest rate upward after the Fed announcement," said Mr Steven Tan, chief executive officer of real estate agency OrangeTee & Tie. "Interest rates would likely continue to move up due to inflation's persistence." "It is always advisable to go back to their own banker to assess their current package status," he said.
Upon reviewing their current loans, homeowners can consider refinancing their mortgages, which means paying off their existing loan and replacing it with a new one. "They have to calculate whether it is worth paying the penalty, versus the increase in the monthly mortgages that they are paying," she said."If it is worth it, some of them may refinance."
"If you're paying a higher mortgage and your savings account interest rate is so low, you can think of paying part of the loan."
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