In its annual financial wellness survey, OCBC Bank uncovered a trend of rising financial stress amongst Singaporeans. One of the key drivers for this increase in financial stress comes from their mortgage, which is driven by the rising interest rate environment as the US Federal Reserve continues to raise interest rates to fight inflation.According to the OCBC Financial Wellness Survey, 40 per cent of Singaporeans are facing mortgage stress due to rising interest rates.
That said, there might be the smallest of silver linings. For instance, the percentage of Singaporeans who feel that they may be forced to sell off or downgrade because of inability to service the mortgage makes up only eight per cent. This is a lower proportion than in 2020 .The hard truth is that mortgage stress might be much higher now than it was during the time this survey was completed. At the point of the survey, the 3M Singapore Overnight Rate Average was 1.27 per cent.
If you need help, you can consider engaging a mortgage consultant. Mortgage consultants can help you with your refinancing and relieve you of the financial stress.Some say that the era of cheap financing has ended. Singaporeans are starting to feel the pinch of financing big ticket purchases like housing. This problem is further exacerbated by the fact that a labour crunch has led to housing demand outstripping supply, causing homes to rise to a historical record in 2022.
One tip that we can offer aspiring homeowners is to take your mortgage seriously. Review it every couple of years once the lock-in period is over so that you are always on the best deal possible. Every dollar you can save from unnecessary interest payment is a dollar that you can channel into the actual value of your home.Another stark reminder from the survey findings is the contrast of plight between HDB and private property owners.
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