Home loan defaults at some banks have eased from recent highs

In the past year, as central banks have been on a monetary hike to tighten monetary policy, banks have been quick to adjust their lending. Mortgage rates, in particular, rose past the 4 percent mark to levels not seen in recent years.

The CEO of SingCapital Alfred Chia said that the need to remain competitive is one of the reasons why mortgages may be high in some banks recently.

“At one stage, we saw the highest prices up to 4.5 percent but only for a short time. The competition has now reached about 4 percent,” he said.

Market expectations for the US Fed to slow down on rates this year and recent changes in the Singapore Overnight Rate Average (SORA) are other factors, said Mr Paul Wee, vice president of PropertyGuru. Finance.

SORA, Singapore’s unsecured lending rate, went on a rollercoaster ride in December, starting the month at close to 4 percent before falling to 1.65 percent on the 30th. December.

According to Mr Wee, this decline may be due to the low price of products from the United States and concerns about the state of the American economy which are all feeding market expectations for the reduction of the Fed. .

“In such a market, banks are likely to take a close look at their portfolios and adjust them to align with SORA’s benchmarks and market expectations,” he added.

That said, the SORA has recovered – it has reached a high of 3.8 percent this week – reflecting a lot of uncertainty that continues in the macro environment and on the other hand, the six Mortgage rates continue to fluctuate going forward, mortgage advisors say.

Several Fed policymakers have been confirmed this week support for more rate hikes and higher policy rates of at least 5 percenteven if the inflation rate shows signs of growth and economic activity is slowing down, according to media reports.

“The general consensus is that the Fed rate will go up to 5 percent but the challenge is whether the Fed will pivot at that time,” said Mr Chia.

“They are trying to strike a balance between the economy and the recession. But there is also a geopolitical situation in terms of the ongoing war in Ukraine, so I think that This is the uncertainty that homeowners need to get used to.

Even if the Fed continues to cut rates, interest rates may not return to pre-recession levels, he added. “Unfortunately, the low season is over.”

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