Global interest rates continue to rise and Singapore banks are re-introducing fixed rate mortgage facilities with higher rates than before, up to 3.85%.
OCBC has re-introduced fixed rate packages at 3.35% for the one-year fixed rate and 3.5% for the two-year fixed rate package.
The variable rate will remain unchanged with interest rates of one month or three months SORA compounded plus 0.98% for the first two years and three months SORA compounded plus 1% after the third year.
UOB's latest two-year and three-year fixed-rate mortgage portfolios amount to 3.75% and 3.85%, respectively.
The floating rate pairing III is SORA plus 0.7% in the first and second years and 0.8% after the third year.
The interest rate environment is currently dominated by many uncertainties and clients are advised to consider the fixed combined with variable rate packages offered by their bank.
If a customer has a two-year fixed rate on half of their mortgage and a three-month SORA variable rate on the other half, the current rate will be a much lower 3.27%.
This allows them to repay the fixed amount, while giving them the option to repay a larger variable rate mortgage when interest rates rise.
The banks' latest prime 12-month fixed deposit rates are close to or at 3%, the highest local 12-month deposit rates in nearly 24 years.
Bank of Malaya's 15-month preferential deposit rate was raised to 3.05% with a minimum deposit amount of $20,000.
At UOB, the 15-month time deposit promotional rate will increase to 3% per annum from 2.8% and the 12-month promotional rate will increase to 2.9% and will require a new deposit of at least $20,000.
OCBC Bank's promotional 12-month deposit rate also increases from 2.6% to 2.9% and VIP customers can enjoy 3.1% and must also make a new deposit of at least $20,000.
RHB Bank raised its 24-month time deposit rate to 3.2 percent, and Premier Clients can get up to 3.4 percent.
According to data from the Monetary Authority of Singapore, the last time the bank's 12-month deposit rate exceeded 3 percent was in November 1998, averaging 3.11 percent.
At that time, three-month and six-month time deposit rates were 2.95 percent and 3.05 percent, respectively. Since then, bank deposit rates have been declining and have been below 1% for most of the last 20 years.
As the economy fluctuated and market worries about a global recession intensified, banks noticed that more customers were choosing to deposit their money in fixed accounts, with the amount of Singapore dollar time deposits tripling in September compared to August.
In light of the continued high interest rate environment, promotional interest rates on fixed deposits will be further increased to provide customers with a safe and secure hedge against inflation and economic volatility.