How does the bank loan interest rate works?

This is a pretty broad question. Seedly's got a very comprehensive article worth reading here: https://blog.seedly.sg/compilation-mortgage-hou...

For a super concise answer: there are two main types of bank loan packages.

• Some have floating interest rates that are volatile and fluctuate monthly, but are often the lowest in the market.

• Some are fixed for a period of time (typically 2 to 5 years) but are slightly higher.

• Since 2009, no bank package has ever gone above 2.60%.

Ultimately (and I'm definitely biased here because I represent Mortgage Master) you may want to consider looking for a mortgage broker like us. We offer a free service who can answer all your questions, help you calculate potential costs and then help you compare all available home loan packages.

Bank loan rate usually has a floating and a fixed rate component, e.g. 1M SIBOR + 1%. The SIBOR would fluctuate, depending on the market/economy.

If interest rate was to increase during a recovery post-COVID, it is possible for SIBOR to hit 1.6% (2018-2019).