Definition
Fixed Rate Mortgage
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By definition, fixed rate mortgages are home loans with interest rates throughout the tenure of the loan.
There are no home loans in Singapore with a fixed interest rate throughout the 20 years or or years while it is being repaid by a borrower.
But banks continue to market their mortgages that have as short as a 1 year fixed interest rate as fixed rate mortgage. After which, the interest rate floats according to the index it is pegged against plus a spread.
Lock-in periods often come with fixed rate home loans in Singapore that runs parallel to the period of fixed interest rate.
For example, a loan at 1.50% for the first 2 years will have a 2 year lock-in period. Should a borrower do a redemption during the initial 2 years, he would incur a penalty.
The only housing loan that comes close to a fixed rate mortgage is the HDB concessionary home loan that is at 2.6%.
Yet even that is subject to CPF interest rates fluctuations.
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