Based on data from Bloomberg, and following the rather sharp increase yesterday of Singapore Interbank Offered Rate over the next 3 months, homeowners that took the option of a loan with a floating rate for Kingsford Waterbay, as opposed to a fixed rate on their homes, will be expected to pay a much higher monthly interest rate. According to Bloomberg, the SIBOR 3 month rate rose sharply to 0.62052% this past Tuesday, as opposed to Monday’s 0.57762% and last Friday’s 0.45738%.

Kingsford Waterbay Interest Rates Increase

For the majority of 2014’s 1st half we saw a benchmark rate that stayed unchanged until August, when it started to slowly creep upwards and then proceeded to steadily rise along with the strengthening of the US dollar. According to Overseas Chinese Banking The Myst Corp (OCBC), this upward trend of the 3 month SIBOR may have occurred as a result to a weaker Singapore dollar, which dropped to a 4 year low against the US dollar.

Waterbay at Upper Serangoon

Looking at the exchange rates from this past Friday, we can see that 1 Singapore dollar is equal to 1.328 US dollars, a rate that has dropped its peak of 1.238 that it saw on July 23rd of 2014.
This benchmark rate is most notably used by banks in Singapore as a guideline rate of interest for any funds that they lend to financial institutions concerning Kingsford Waterbay. It is also used to decide housing loan interest rates.

Kingsford Waterbay at Upper Serangoon

For example, some of OCBC’s interest rates for mortgages for Kingsford Waterbay will be based on SIBOR with an added 0.85% of points applied for the first 3 years of the tenure of a loan. So, as the rate rises we will also see loan package interest rates rising dependant on this guideline rate.
According to some media reports, OCBC has stated that, having interest rates rise at a pace that is slow and stable allows homeowners to adjust. However, if it becomes volatile and unmanageable it can become trickier. We can see this now in the correction of some property prices.

Serangoon Condo

They further noted that because we are still in the first few trading days of 2015 and the market itself is still reacting to these conditions, it may be overshooting. By mid-year we could see the benchmark rate hit close to 0.7% but fall to 1%-1.2% by the finish of 2015.
A 0.7% 3 month SIBOR would see a 20 year tenure with a $100,000 loan installment have an estimated rise by $11.45 to $484.85 for a mortgage that is based on this benchmark rate.