How will higher rates affect property buyers?

THE Singapore Interbank Offered Rate (Sibor), which commonly reflects how much it would cost for banks to borrow from one another, has attracted much attention of late.

This is because many home owners, especially private property owners, have their housing loan rates pegged to the Sibor. After staying low and relatively flat since late 2010, the Sibor began inching up in early 2015, with the three-month Sibor increasing by at least 0.25 percentage points since December 2014. This recent upward trend was possibly caused by a combination of several factors:

The wider concern now is how much more the Sibor might rise. If we look at the past seven-year historical records, the three-month Sibor might even rise above 3 per cent. It is therefore time for property buyers or investors to start thinking about how higher interest rates might affect their finances.