What you should know before choosing a home
loan package
Selecting the right mortgage for your house
may be an overwhelming process for some. Maybank offers the lowdown
on what to consider before making your decision.
When taking up a home
loan, there are some things to consider. Knowing what these key
considerations are and making the right decision based on your
needs are important so that you get more value from the right
option.
One important consideration is the type of interest rates which
could be broadly classified into fixed rates or floating rates.
Popular floating rate home loan packages include those pegged to
the Singapore interbank Offered Rate (SIBOR) or the Swap Offer Rate
(SOR). While one may be able to capitalise on the current low
interest rate for home loans that are pegged to the SIBOR, such
rates are subject to market movements.
Home buyers may want to choose a fixed rate home loan package
when the market is in a low-interest environment. Although priced
higher, fixed rate home loans offer the certainty of interest rate
and allow for better loan commitment planning.
It is also important to remember that some home loan packages
come with a commitment period, within which you will be required to
pay a fee in the event of capital prepayment.
At the end of the day, there is no one-size-fits-all option.
That said, the general sentiment is that fixed rate options tend to
be the popular option when there is the expectation of future
interest rate increases. Maybank offers customers both fixed and
floating rate packages to cater to different types of housing loan
financing needs.
Speak to your banker about your other financing needs as banks
can also provide financial solutions such as renovation loan and
home contents insurance. This ensures that you enjoy the current
low rates and peace of mind knowing that you will not be subject to
interest rate fluctuations if you take up a fixed rate loan.
Source: Maybank
Top Property Special, The Straits Times, Saturday, July 19,
2014, Pg 6
