DBS Singapore announced their FHR and FHR9 rates will increase in June 2018. We explore the impact that’s felt by many home loan borrowers.
Impact of FHR & FHR9
FHR was the very first fixed-deposit rate used by banks in Singapore to vary home loans. It was defined as the average of 12- and 24-month Singapore dollar fixed deposits. During its launch in 2015, it was at 0.4%. Subsequently, it was revised to 0.675% with effect from 23 Jan 2016 and in June 2018, it will be 0.80%.
After the bank retires FHR-linked mortgage products, it introduced those that are linked to FHR18, FHR9 and the current FHR8.
FHR18 was 0.50% and now 0.60%. FHR9 launched in March 2017 went from 0.25% to 0.50%.
These movements impacted many borrowers, simply because of the sizeable customers the bank have. Based on historical checks, those affected could be paying somewhere from 1.8% to 2.6%. Status quo would be a financial disaster when you can move to fixed rates at 1.75% as of May 2018.
Worried DBS customers should compare and calculate their mortgage refinancing options.