Rising SIBOR: Should You Refinance Their Home Loans Now?
After floating around 0.4% for +5 years, 3-Months SIBOR has risen to around 1% by May of 2017. This is because the U.S. central bank began to hike its interest rates since 2015. However, although rates in the US have continued to increase ever since, 3-Month SIBOR has actually fallen recently from 1.2% in March 2016. This could be a rather confusing phenomenon for an average consumer, especially if he is trying to decide if he should be refinancing his home loan before rates to up even more. Will SIBOR continue to be decoupled from the US rate, and even go down more from here? Or will it eventually catch up with the US rates and continue its rise? Here, we breakdown a few facts to help you make a better financial decision. US Rates & SIBOR Have Long-Term Correlation Although you can see from the charts above that SIBOR and US rates have not moved in tandem since 2015, there’s an undeniable correlation between the two rates, especially in the long run. This is because the Monetary Authority of Singapore, Singapore’s central bank, regulates its interest rates primarily in order to control Singapore Dollar’s exchange rates. When US Rates [...]
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