carries the most risk. They said, the risk comes not so much from local

banks but more so from foreign banks.

important to understand the "engine" underneath it.

Variable rate home loan packages Risks

Many people say that foreign banks will raise rates soon as they do not have

banks? Safer from raising rates for the variable rates mortgages.

The premise of most of these talks centred around an assumption that local

the bank.

All banks in Singapore have to pass the stringent requirement set by the

MAS rules and requirements applies to both the local and foreign banks.

Ms Angelina Fernandez Director (Communications) Monetary Authority of Singapore said on 26 Sep 2008 (My paper). “Our regulations also require foreign-bank branches in Singapore to maintain a proportion of the assets of their Singapore branch in safe and liquid Singapore dollar-denominated and Singapore-domiciled assets.”

compensate the savers first.

Are Local banks really safer and less likely to raise rates?

Is it fair for banks to claim that their variable rate home loan packages are

loan just because they are local?

Do local banks really have lower cost of lending and therefore will not raise

home loan lending rates for variable rate loans as easily as other foreign

banks?

First and foremost, banks will not tell you how much funding and what is

Weighted average cost of capital.

So how would we know local banks won’t raise rates?

Secondly, there is no guarantee that lower cost translate into lower lending

banks from raising rates to improve their margins?

The only guarantee is competition and a robust market.

As we have seen in the earlier months when many local banks go into risk

banks price their rates right, so consumers can benefit.

Foreign Banks versus Singapore banks

Many foreign banks have now obtained the QFB status. QFB stands for

like local banks and are staffed with locals.

Source of Funding advantage

Certain banks such as DBS may have a larger depositor base and larger

solvency of the bank is not of critical concern, unless there is a risk of them

recalling your loan.

What should property buyer compare?

The best safety in our opinion is that home buyers, property buyers, property

over if your debt to asset ratio is low.

What should the careful property buyer do?

Therefore we emphasize that safety should start from the time you buy your

SAFE bank should be a secondary concern.

So how to compare Singapore Home loans?

Therefore when doing Singapore Home loan comparison, focus on a home

yourself that safety net.

For Singapore home loan refinancing, it is the same case.

We are Property Buyer Mortgage Consultants

We help people to compare singapore home loans for refinancing and new