The new media English news network CNA reported that DBS Bank offers four fixed-rate options with terms ranging from two to five years, with all packages set at 4.25% per annum; OCBC Bank's one-year and two-year fixed rates, which were 3.35% and 3.5% respectively, are now set at 4.3% per annum.

DBS Bank's floating interest rate remains unchanged and continues to be linked to the overnight rate Singapore Dollar (SORA) three months compound interest and 1% loan guarantee.

As of the day before yesterday (14), the three-month SORA compound interest rate was set at 2.6633 with a two-year lock-in period.

In addition, DBS Bank has changed the terms of its "two-in-one mortgage", which combines fixed and variable rates. Borrowers can now arrange mortgages of up to 70 percent at a fixed rate; the rest is a variable rate with a 0.75 percent loan guarantee and a two-year lock-in period.

A DBS spokesman said that regardless of interest rate trends or the home loan portfolio chosen, the bank strongly advises borrowers to set aside sufficient funds as a cushion in case interest rates rise further or any unforeseen circumstances arise, so that they have enough time to restructure their loans or sell their properties if they run into any financial problems.

"Ideally, people should keep some savings in the form of cash or liquid assets that can be used to pay the monthly home loan installments for the next two years, in addition to at least six months of expenses."

Likewise, OCBC's variable interest rate will remain unchanged.

Maryanne Phua, head of home loans at OCBC, was quoted as saying that the variable rate match is "more attractive" to customers who want the flexibility to pay off their loans early.