Singapore’s key mortgage benchmark jumped to a seven-year high on Monday (Sep 14), ahead of a Federal Reserve meeting later this week that could mark the start of US interest rate hikes.
The three-month Singapore Interbank Offered Rate (Sibor) rose 5.2 per cent to 1.13100 per cent, up from 1.07483 per cent on Thursday, according to latest data from the Association of Banks in Singapore. Monday’s level was the highest since 2008.
Many variable mortgage plans have interest rates linked to Sibor. For instance, Oversea-Chinese Banking Corporation currently offers home loans at three-month Sibor plus 0.9 percentage points for the first three years. Rising interest rates could put further pressure on residential property investors who are already grappling with falling rents and lower resale values.
A small majority of forecasters are predicting the US Fed will raise interest rates for the first time in nearly a decade when it meets on Wednesday and Thursday this week, according to a Reuters survey.
Source : Channel NewsAsia – 14 Sep 2015