The days of rock-bottom interest rates look like they are coming to an end so home owners should consider mortgage refinancing now, Straits Times deputy business editor Dennis Chan said yesterday.
Interest rates in Singapore are somewhat dependent on United States rates, which are widely expected to go up next month.
Citing economists, Mr Chan said interest rates will likely climb gradually - barring any unforeseen events - which will see three- month Sibor doubling from about 0.9 per cent now to around 1.85 per cent in 2018.
The three-month Sibor or Singapore interbank offered rate is the benchmark used to price some home loans.
"Aside from interest rate, it makes sense to refinance your loan now because banks are fighting very hard for market share and the rates are very competitive in the initial period."
That was one of the tips from Mr Chan at a free talk at the library @orchard in Orchard Gateway last night attended by 220 people.
It is the seventh in a series of 12 talks under the askST @NLB initiative, where readers can engage correspondents from the newspaper on topics ranging from finance to healthcare and education.
The series is a result of a partnership between The Straits Times and the National Library Board.
Mr Chan, who repriced his home loan earlier this year, also said it may be a good time to consider refinancing in view of the weak economic outlook and concerns over job security.
"The job market isn't looking too good. If you were to lose your job, you would not want to be in the position to try to negotiate for a better deal with the bank," Mr Chan said.
However, he noted that some home owners may not be able to refinance if their existing loan package has a lock-in period. This means the borrower will incur penalties from cancelling the contract or pre-paying a part of the loan.
Mr Justin Koh, who attended the talk, said it encouraged him to look at refinancing options.
"It was very useful, especially the slides showing various loan packages available in the market. It made me realise the big gap between the rate I'm on and what's out there. It gives me an impetus to start looking," added Mr Koh, 35, who owns a private property.
The next talk, on Dec 15, will feature Straits Times Life! deputy editor Wong Ah Yoke, who will share tips on Singapore's best restaurants.
The talk will also be held at the library@orchard.