Homeowners should brace for higher mortgage rates until end of 2025: Analysts

1 month ago 41

SINGAPORE: Singaporean homeowners have been advised to brace for an extended period of higher mortgage rates until the end of 2025. Current rates, hovering above 4 per cent, are expected to persist due to a delay in the anticipated drop in interest rates and observers have predicted that a reprieve could come later than expected.

The delay is attributed to the cautious approach of the United States Federal Reserve in reducing interest rates, given the persistently high levels of inflation. This trajectory has prompted more homeowners to opt for fixed mortgage rates in response to the challenging interest rate environment.

According to real estate agents who spoke to CNA, the rental market in Singapore is experiencing a notable shift, with agents now requiring an average of 10 viewings to secure a tenant due to the influx of rental properties instead of just requiring one viewing before a flat is snapped up.

Landlords are also now finding themselves increasingly compelled to lower asking rents to attract tenants. To entice tenants in a competitive market, homeowners are offering additional services such as Wi-Fi and utilities, as well.

This adjustment poses financial challenges for landlords, as decreased rental income strains their ability to meet mortgage obligations. Some homeowners find themselves caught between the need for additional income and the reality of diminished rental returns.

Analysts have cautioned that homeo...

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