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Home Loan Rates in 2015

04 Nov 2014 
SOURCE: Goh Eck Hong

After nearly 6 years pumping in US$4.5 trillion into bond purchases, Janet Yellen, chief of the US Federal Reserve, recently announced that the Federal Reserve is going to stop its bond-buying program in November.

How is this going to impact Singapore home loan rates in 2015? Not much. The Federal Reserve has in the same statement, reiterated its commitment to keep interest rates low for a considerable time. “Considerable time” is subjective. Based on the Federal Reserve's track record and reasonableness, my two cents is that US interest rates are not likely to move much in the coming year. Singapore's parallels - SIBOR and SOR - will tend to follow suit.

For new home loan packages however, SIBOR and SOR are just one part of the equation. The other part depends on inter-bank competition. When it comes to housing loan packages, local financial institutions have been pretty muted this year. My best guess is that a deviant bank will probably rock the boat in 2015 and spice things up. Hopefully for the better!

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