Is it better to go for 5-year fixed or 2-year fixed mortgage loan now?

On hindsight, it is better to go on 1.5% for 5 years, now it is a whooping 4%+

Excellent question!

Fixed mortgage rates are best when you expect interest rates to rise in the near future. It's hard to predict exactly when rates will rise, but there are enough indicators that they will increase sooner than later, such as the rising long-term US interest rates.

Banks are also anticipating that interest will rise sooner than later. For example, DBS recently increased their 1.50% 5-year fixed package to 1.68%. It's still a good rate (throughout your loan tenure, most home loan rates average out between 1.6% to 1.8%) but it is a recognition that rates will not stay low in the near future.

Hope this helps!