How does the economy affect Singapore Mortgage Loan Rates?

How does the economy affect Singapore Mortgage Loan Rates?

How does the economy affect Singapore Mortgage Loan Rates? – There are many reasons that will affect the rates of a mortgage loan. This is quite similar across the world and even more so for a financial hub and capital like Singapore. Singapore is a very open economy and relies a lot on trading and exports for the income of the nation.

The economy is affected strongly by the use of a few economic tools and the main one is the interest rates of the banks that is set forth by the central bank of the country, Monetary Authority of Singapore. When the economy is not doing very well, the central bank will usually lower interest rates to encourage borrowing. When businesses borrow, they will invest it into the economy and pay more salaries that will push up the economic activity, people who save will also be more interested in placing money elsewhere because of low interest rates.

Due to Covid-19, we have seen the USA through its Federal Reserves lower its interest rates. With this the Monetary Authority of Singapore followed suit and also started to lower its rates. With the economy is such bad shape at this current moment, there is a high demand for loans and to ensure businesses can survive this period of downturn, we expect to see the interest rates to get even lower or maintain at such low rates.

So how does this affect Singapore Mortgage Loan rates?

When there is a lower interest rate across the board for most of the economy, the interbank loan rates will also fall. Interbank loan rates are what the banks will charge each other for loaning money between them. This will allow the banks to give out loans when they are able to inject money through loaning into the system.

With this the loan rates will fall and with it the interest that a borrower will need to pay when they are trying to buy a new home or they are trying to refinance a Mortgage.

Singapore Mortgage Loan rates are currently at a very low rate hovering just slightly above 1% for most parts and with the fixed rates at about 1.5% they have never been this low for a long time.

Singapore economy is likely to slide and we will see a tougher period during this few months to a year.

If you are looking for a new home loan broker in Singapore, or Singapore Mortgage Refinancing you can talk to our partners at Avant Mortgage, they are experienced and able to give you a good idea for your property, what you can go for to help you to save money overall.


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Should SMEs in Singapore take up bank loans to assist in their business

Should SMEs in Singapore take up bank loans to assist in their business – There’s an old saying that business or people should avoid debt as much as possible. For the older generation, debt seems to be something comparable to gambling, something that is bad, something that should be avoided.

Should SMEs in Singapore take up bank loans to assist in their business

Loans & debt has been around for many years ever since the start of the financial system. And it has been a vital part of the explosive growth of many western countries that have been using debt to do more business and grow at extraordinary rates that has never been seen before.

SMEs in Singapore has been slowly warming up to the idea of taking bank loans to finance the purchase of assets and also for business expansion and with this the recent years we have seen a higher take up rate of loans in Singapore.

Singapore SME loans are not exactly the easiest to get but the government has been very supportive to startups in the past with Micro Loans and for the SMEs with the Working Capital Loans. For those company that need more than what the Working Capital Loan can offer, they could also get a higher interest rate Term loan from the banks themselves.

Loans are not only given out by Banks, loans can also be given by financial institutions that work closely with businesses to provide loans.

With the recent increase in difficulty in doing business due to the new Covid-19 Outbreak that has caused the tourism and retail sector to slow down, we believe the government will be providing higher quantum of loans and also easier criteria to help business get pass this tough business climate.

So if you are a SME owner, why should you take up bank loans to run your business you may ask.

Businesses that require a bank loan will definitely benefit from the additional cash flow you have from taking up a loan for expansion. Investment into assets or into marketing will come back with returns that will help you speed up your business growth a little. This is one thing that most people do not realize that the risk of taking a loan and repaying the loan will be outweigh by the growth you get from investment into items and services that will definitely help you to increase in revenue.

For those who are going through cash flow short fall, you will also be able to survive the tough winter periods in business and come back up stronger if you were to tap on loans that are available to you and your businesses.

You should never treat loans as something scary but something that can be of extra help to you especially if you are just starting off in this business.

  1. Working Capital LoansWorking Capital Loans are supported by the Singapore Government to reduce the risk of banks loaning out to SMEs by 50%, this allows the banks to have a must easier criteria on lending and encourages more cash flow circulation in the market through the loans given out to businesses to carry out more business.

    With the recent outbreak of Covid-19, the government will be increasing its loan quantum for Working Capital Loans and also at the same time will be working closely with the few sectors that are suffering direct hit from this outbreak, such as retail and tourism and will have a more targeted bridging loan support for them.

  2. Business Term LoansBusiness Term Loans are given out by the banks through their own internal funds, not supported by the government. Banks will offer term loans at effective interest rates usually around 7-8% and this allows businesses to use it for expansion and cash flow purposes.
  3. Mortgage LoansIf you are renting, you should consider buying up your units with Mortgage Loans that will definitely allow you to build up networth through owning assets that you can use for long term purposes and also for investment usage.

    Get your Loans refinanced as well after the lock in period to ensure that your fees are at the lowest so as to enjoy the best rates every time.

  4. Equity FinancingDo you own a property and will like to receive a loan by using it as security. Equity loans are one of the best ways to get low interest loans for your business needs.

If you require some help from a loan broker in Singapore for your Singapore SME Working Capital Loans, we work closely with Avant Consulting Pte Ltd to assist in our customers getting the best rates and also fees. We also assist in making sure we have compared across the board to give you the best choice you have.

Mortgage and property loans and mortgage refinancing in Singapore is also one of the things this loan brokers do for you and your business.


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Should SMEs in Singapore take up bank loans to assist in their business

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