Banks raise fixed rates on home loans to over 4%
Dec 20, 2022
By   Internet
  • City News
  • Interest rates
  • mortgages
  • loans to buy a home
Abstract: Interest rates in Singapore are rising as the US raises rates frequently, with banks raising fixed rates on home loans to over 4 per cent.

DBS Bank (DBS) and OCBC Bank (OCBC) raised their fixed rates two days ago, while UOB Bank (UOB), which has not offered fixed-rate mortgage packages for some time, introduced a new package.


DBS' two- to five-year fixed rate is now 4.25 per cent, while OCBC's one- and two-year fixed rates have been raised to 4.3 per cent. UOB is offering a two-year fixed mortgage rate of 4.5% with a two-year lock-in period.


Prior to this adjustment, DBS' two to five year fixed rate was 3.5% and OCBC's previous one-year and two-year fixed rates were 3.35% and 3.5%.


In response to market demand, OCBC has re-introduced the fixed rate package. In view of the recent increase in interest rates, the new one-year and two-year fixed rate packages are now both available at 4.3%.


Homeowners can also opt for a variable rate mortgage package linked to the SGD Overnight Rate (SORA). This is more attractive to homeowners who wish to have more flexibility in paying their mortgage upfront.


Banks offer a variety of mortgage packages, including fixed, variable and mixed packages combining fixed and variable rates.


The spokesperson noted that many homeowners are expecting continued interest rate hikes in the US and are therefore opting for fixed-rate packages.


The spokesperson also said that more and more homeowners are interested in entering into hybrid packages.


DBS' hybrid packages now allow homeowners to choose a fixed rate for up to 70 per cent of their mortgage amount and a special variable rate option for the rest. Previously, the rate was a maximum of 50%.


UOB also offers a mixed rate mortgage package.


In an interview, UOB Group Head of Personal Financial Services Chan Kwong Yu pointed out that assuming a three-month SORA compounded at 2.66 per cent, with half of the mortgage being a two-year fixed rate, the blended rate on the loan could be reduced to 3.93 per cent.


Chan Kwong Yu said, "As global interest rates continue to rise, we will continue to closely monitor market conditions and regularly evaluate our mortgage packages to ensure we remain competitive in the market."


Homeowners are concerned about the heavy mortgage burden as interest rates continue to rise in the US, and the US Federal Reserve has earlier indicated that interest rates will be higher than expected at the end of the range.


In an interview with, executive director of said, "Homeowners now have to be very careful in choosing their mortgage packages. Regardless of the end rate, we still believe that the rate hike cycle is coming to an end and that the Federal Reserve will suspend rate hikes for the next three to six months."