UOB Raises Fixed Home Loan Rates to 3.85%, Following DBS’ Lead

SINGAPORE – Home loan rates in Singapore have surged to levels not seen in many years, with UOB leading the charge by raising its fixed home loan rates to as high as 3.85 percent.

UOB introduced two-year fixed-rate packages at 3.75 percent and three-year fixed-rate packages at 3.85 percent, marking a significant increase of 0.77 percentage points compared to earlier packages that were withdrawn in late September.

This move follows DBS’s announcement earlier in the day, where they raised their fixed-rate packages to 3.5 percent across two-, three-, four-, and five-year plans, up by 0.75 percentage points.

For a homeowner with a loan of $500,000 over 30 years, the new UOB three-year fixed rate package would mean monthly payments of $2,344—$214 more than the previous package. Meanwhile, DBS’s two-year fixed-rate plan would require $2,245 in monthly repayments, an increase of $204 from prior rates.

OCBC is also expected to adjust its home loan packages, having recently taken its two-year fixed-rate option at 2.98 percent off the market.

A DBS spokesperson noted that the rate hikes are in response to changes in the global interest rate environment, and highlighted that longer-term fixed packages of up to five years are being offered to give customers more stability.

UOB’s head of personal financial services, Ms. Jacquelyn Tan, said that the bank is continually monitoring market conditions and encourages homeowners to consider a combination of fixed and floating rate home loan packages, which currently offer a blended rate of around 3.27 percent per annum.

Floating rates in Singapore, which are based on the Singapore Overnight Rate Average (SORA), are also expected to rise as daily SORA rates spike. On Monday, SORA rates exceeded 4 percent for the first time, though they later settled at 3.33 percent.

Mortgage experts predict that the U.S. Federal Reserve’s rate hikes will continue to drive up rates in Singapore. However, concerns over a potential global recession may eventually prompt a reversal in these trends.

In response to the rising rates, financial experts are advising homeowners to carefully review their mortgage options and consider locking in favorable rates while they are still available.