Rates, not benchmarks, need a fix

THE latest home loan innovation to hit Singapore is a benchmark based on fixed deposit rates plus a premium. All the better to vary your mortgage interest with, the salespeople say. But what consumers really need is not another twist to the floating-rate mortgage, but rather better fixed-coupon loans that are easy to account for in budgets and that protect against rising interest rates.

DBS Bank has been making the headlines with its introduction of the "fixed-deposit home rate". The new benchmark is being marketed as an easy-to-underst…