How have the mortgage rates in Singapore been affected by COVID-19 and how do you foresee it changing moving forward?

Hi Rachelle, thanks for the question and thanks for reading the opinion!

COVID-19 has accelerated the recession cycle, so interest rates have dropped globally sooner than expected. In the same way, mortgage rates in Singapore have dropped as well.

Today, should your loan be above $1 million, you can get a fixed rate of 1.18% for three years, while the best SIBOR rate for a similar loan should be at around 1.1%.

(To get an idea of how much it's been affected - Just a year ago in January 2020, fixed rates were at 2.4% and floating rates at around 2.1%.)

I have no crystal ball for the future, but I believe the current low interest rate environment is an anomaly brought by the initial impact of the recession, and I think it will very quickly normalise at around 1.6%-1.8%.

The reason i am saying this is because of what happened in 2008 when rates also crashed, but went back to that norm within a year. By 2010, we were seeing floating rates at 1.4% and fixed rates at 1.7%.