Recently, banks in Singapore reduced their fixed interest rate to as low as 1.45% and floating rate to about 1%. As my home loan was based on the floating rate, I saw savings of almost SGD200 for my latest home loan instalment!! I can now have at least 57 plates of chicken rice for free every month until the next interest rate adjustment.
So what can we do besides having extra cash in our pocket?
Should we be taking advantage of the interest rate now by refinancing our home loan?
Refinancing means reducing your home loan instalment by switching to a lower interest rate with your current bank (or other banks).
Refinancing can be done as early as the 7th month into your loan contract; depending on the lock-in period stated in your loan agreement.
A typical home loan package has its interest rates raised after two to three years. For some of us, this means an opportunity to start “interest rate shopping” with other banks.
Let’s look at a real case study – me. A Property Income Mastery graduate (Batch 9), I had my Maybank home loan refinanced by Standard Chartered Bank in October 2019.