{"id":634,"date":"2023-06-29T19:04:58","date_gmt":"2023-06-29T11:04:58","guid":{"rendered":"https:\/\/www.99.co\/singapore\/glossary\/?p=634"},"modified":"2023-07-03T12:52:01","modified_gmt":"2023-07-03T04:52:01","slug":"fixed-and-floating-interest-rates","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/","title":{"rendered":"Fixed and floating interest rates"},"content":{"rendered":"\n

What are fixed interest rates for home loans?<\/strong><\/h2>\n\n\n\n

In Singapore, a fixed rate home loan is a mortgage option where the interest rate remains unchanged for a specific lock-in period, typically lasting between two to five years. However, it’s important to understand that this fixed rate is temporary and will eventually transition to a floating interest rate once the lock-in period concludes.<\/p>\n\n\n\n

After the fixed rate period expires, the interest rate for the home loan will be adjusted to a floating rate, which is tied to a reference rate such as the Singapore Overnight Rate Average (SORA)<\/a>, Fixed Deposit Based Rate (FDR), or other rates set by the bank.<\/p>\n\n\n\n

It’s worth noting that the interest rate for a fixed rate home loan and the bank spread may be equal to or higher than the prevailing rates offered for floating rate mortgage packages in the market. The bank spread refers to the additional percentage charged by the bank in addition to the cost of lending the principal amount to borrowers.<\/p>\n\n\n\n

What are floating interest rates for home loans? <\/strong><\/h2>\n\n\n\n

A floating rate home loan entails that the loan’s interest rates can vary periodically, and the frequency of adjustments depends on the specific type of loan you opt for. As the interest rate changes, it directly impacts your monthly instalment amount.<\/p>\n\n\n\n

A floating rate home loan in Singapore can be associated with various reference rates, such as the SORA or an FDR. Typically, floating rate loans come with a lock-in period of two years. During this period, floating rate home loans often offer more flexibility regarding partial repayment.<\/p>\n\n\n\n

Fixed vs floating interest rates for home loans – which is better?<\/strong><\/h2>\n\n\n\n

There is no one-size-fits-all answer when deciding between fixed and floating interest rates for home loans. It depends on your circumstances and priorities.<\/p>\n\n\n\n

If you value stability and want to know exactly how much you’ll pay each month, a fixed rate loan may be a better option. This eliminates surprises and provides certainty. However, keep in mind that fixed rates will transition to a floating rate once the lock-in period ends. Consider the possibility of interest rates decreasing in the next 1 to 2 years, and choose a home loan with a shorter lock-in period if you believe this may happen.<\/p>\n\n\n\n

On the other hand, if you believe that interest rates have peaked or anticipate a downward trend, a floating rate home loan might be more suitable. This lets you take advantage of potential interest rate fluctuations and secure a competitive mortgage package. However, be prepared for changes in your monthly instalment as the interest rate adjusts periodically. It’s wise to set aside extra funds as a buffer in case interest rates rise unexpectedly.<\/p>\n\n\n\n

Before finalising a home loan package, carefully evaluate the associated fees and conditions for refinancing or repricing. During the lock-in period, typically 2 years, you may face penalties for making partial or full prepayments or switching to another financial institution. Refinancing also involves additional costs, such as valuation and legal fees. <\/p>\n\n\n\n

Therefore, it’s crucial to consider the package as a whole, including all terms and conditions, rather than solely focusing on the interest rates.<\/p>\n","protected":false},"excerpt":{"rendered":"

What are fixed interest rates for home loans? In Singapore, a fixed rate home loan is a mortgage option where the interest rate remains unchanged for a specific lock-in period, typically lasting between two to five years. However, it’s important to understand that this fixed rate is temporary and will eventually transition to a floating…<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[87],"tags":[],"class_list":{"2":"type-post","7":"entry"},"acf":[],"yoast_head":"\nFixed and floating interest rates Definition, Understanding and Why Fixed and floating interest rates is Important?<\/title>\n<meta name=\"description\" content=\"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fixed and floating interest rates\" \/>\n<meta property=\"og:description\" content=\"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\" \/>\n<meta property=\"og:site_name\" content=\"Property Glossary\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/99dotco\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-29T11:04:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-03T04:52:01+00:00\" \/>\n<meta name=\"author\" content=\"Sophiyanah David\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sophiyanah David\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\"},\"author\":{\"name\":\"Sophiyanah David\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/503163b9a7eba55032cbed2a8a751d6b\"},\"headline\":\"Fixed and floating interest rates\",\"datePublished\":\"2023-06-29T11:04:58+00:00\",\"dateModified\":\"2023-07-03T04:52:01+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\"},\"wordCount\":535,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\"},\"articleSection\":[\"Mortgage\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\",\"name\":\"Fixed and floating interest rates Definition, Understanding and Why Fixed and floating interest rates is Important?\",\"isPartOf\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#website\"},\"datePublished\":\"2023-06-29T11:04:58+00:00\",\"dateModified\":\"2023-07-03T04:52:01+00:00\",\"description\":\"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Property Glossary\",\"item\":\"https:\/\/www.99.co\/singapore\/glossary\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Mortgage\",\"item\":\"https:\/\/www.99.co\/singapore\/glossary\/mortgage\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Fixed and floating interest rates\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#website\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/\",\"name\":\"Real Estate Terms | A-Z Property Glossary\",\"description\":\"Singapore Real Estate Glossary\",\"publisher\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.99.co\/singapore\/glossary\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\",\"name\":\"99.co\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp\",\"contentUrl\":\"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp\",\"width\":192,\"height\":72,\"caption\":\"99.co\"},\"image\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/99dotco\",\"https:\/\/www.instagram.com\/99.co\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/503163b9a7eba55032cbed2a8a751d6b\",\"name\":\"Sophiyanah David\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/311b57c1fdb9bf110637a3763e7771fb52516f93b652ed112d93a264edaf7bad?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/311b57c1fdb9bf110637a3763e7771fb52516f93b652ed112d93a264edaf7bad?s=96&d=mm&r=g\",\"caption\":\"Sophiyanah David\"},\"description\":\"test author box\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/author\/sophiyanah99-co\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Fixed and floating interest rates Definition, Understanding and Why Fixed and floating interest rates is Important?","description":"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/","og_locale":"en_US","og_type":"article","og_title":"Fixed and floating interest rates","og_description":"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.","og_url":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/","og_site_name":"Property Glossary","article_publisher":"https:\/\/www.facebook.com\/99dotco","article_published_time":"2023-06-29T11:04:58+00:00","article_modified_time":"2023-07-03T04:52:01+00:00","author":"Sophiyanah David","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Sophiyanah David","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#article","isPartOf":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/"},"author":{"name":"Sophiyanah David","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/503163b9a7eba55032cbed2a8a751d6b"},"headline":"Fixed and floating interest rates","datePublished":"2023-06-29T11:04:58+00:00","dateModified":"2023-07-03T04:52:01+00:00","mainEntityOfPage":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/"},"wordCount":535,"commentCount":0,"publisher":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization"},"articleSection":["Mortgage"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/","url":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/","name":"Fixed and floating interest rates Definition, Understanding and Why Fixed and floating interest rates is Important?","isPartOf":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#website"},"datePublished":"2023-06-29T11:04:58+00:00","dateModified":"2023-07-03T04:52:01+00:00","description":"Fixed and floating interest rates is an important term that helps you understand real estate industry better. Find the definition and importance of Fixed and floating interest rates here, we have simplified it for you.","breadcrumb":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.99.co\/singapore\/glossary\/fixed-and-floating-interest-rates\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Property Glossary","item":"https:\/\/www.99.co\/singapore\/glossary\/"},{"@type":"ListItem","position":2,"name":"Mortgage","item":"https:\/\/www.99.co\/singapore\/glossary\/mortgage\/"},{"@type":"ListItem","position":3,"name":"Fixed and floating interest rates"}]},{"@type":"WebSite","@id":"https:\/\/www.99.co\/singapore\/glossary\/#website","url":"https:\/\/www.99.co\/singapore\/glossary\/","name":"Real Estate Terms | A-Z Property Glossary","description":"Singapore Real Estate Glossary","publisher":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.99.co\/singapore\/glossary\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization","name":"99.co","url":"https:\/\/www.99.co\/singapore\/glossary\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/","url":"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp","contentUrl":"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp","width":192,"height":72,"caption":"99.co"},"image":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/99dotco","https:\/\/www.instagram.com\/99.co"]},{"@type":"Person","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/503163b9a7eba55032cbed2a8a751d6b","name":"Sophiyanah David","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/311b57c1fdb9bf110637a3763e7771fb52516f93b652ed112d93a264edaf7bad?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/311b57c1fdb9bf110637a3763e7771fb52516f93b652ed112d93a264edaf7bad?s=96&d=mm&r=g","caption":"Sophiyanah David"},"description":"test author box","url":"https:\/\/www.99.co\/singapore\/glossary\/author\/sophiyanah99-co\/"}]}},"_links":{"self":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/comments?post=634"}],"version-history":[{"count":2,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/634\/revisions"}],"predecessor-version":[{"id":747,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/634\/revisions\/747"}],"wp:attachment":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/media?parent=634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/categories?post=634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/tags?post=634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}