This was the banks' second increase in less than two months, driven by factors such as the US Federal Reserve raising the benchmark lending rate and Singapore's core inflation rising to 5.3 per cent in September.
The three-month compounded SORA has risen from 0.1949 per cent at the beginning of this year to 2.6994 per cent as of Friday . Analysts say home buyers need a good understanding of their situation, life plans, cash flows, assets, liabilities and openness to risk before choosing home loan packages. "However, should interest rates change direction subsequently, opting for a long lock-in period like five years prevents buyers from switching and they may end up paying more for many years.
Mr Lee cited other methods to hedge against interest rate movements. These include stretching the loan tenure and paying down the loan.