Now that property prices can go up to $1million and interest rates have gone up, it’s about time for me to refinance my housing loans…

Hey OP,

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As Peter has mentioned the best loan package you can get now if you haven't bought your flat is the HDB mortgage loan as the chances of it increasing is pretty low as it is based on the previous 3-month average of the three major banks' interest rates which are well below 2.5% (0.09% in Apr 2022).

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In comparison, the fixed rates for banks are well above the HDB loan rate as they start from 3.35%!

Without further information, it's difficult to be able to give you specific advice.

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But in a nutshell, due to the skyrocketing interest rates, HDB loan rates are lower than bank loan rates for the first time in almost 20 years. If you are still on an HDB loan, it would probably be prudent (for now) to wait and see if the government will increase the CPF OA interest rate (which will then increase HDB loan rates).

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If you are on a bank loan, then depending on when you signed up for it, there's a chance your thereafter rate is still competitive. If it is not, then refinancing is your best option.

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Currently, the wisdom is to go for a fixed rate, since interest rates are on the rise. You will pay more in the short-term (you're essentially paying a premium for the security), but should be able to save money in the long-run. Based on projections from the US Fed, a 2-year fixed rate would be ideal, since interest rates are only expected to fall in 2025.

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But there may be multiple factors where a floating rate may be more ideal (e.g. your loan amount is relatively small, so you don't lose out too much even if interest rates skyrocket, or if you're planning to sell your property within the next year).

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Ultimately, I would recommend speaking to a mortgage consultant/mortgage broker (their services in Singapore are free) about your specific situation, since it's best to know all the details before advising you accordingly.

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P.S. I work for Mortgage Master, a mortgage consultancy firm