Home loan rates on the rise

Having done the latest round of online survey, i noticed that generally home loan rates are on the rise. Given that SIBOR is quite low now, banks may be making up for it by charging a higher margin. Even though many loans are tied to SIBOR, I suspect that the funds made available for home loans are not necessarily obtained from SIBOR linked sources and may come with a higher cost, which banks will have to recover by charging higher interest.

A round-up of official policy rates show that the policy rates are generally low. The 3 months LIBOR is at 1.25%. SOR ended the week slightly higher. Meanwhile the bond market bubble seems to be bursting. With government bonds not doing well, it is little wonder that people would shun mortgage-backed securities altogether, which in turn is “threatening to hinder America’s efforts to hold down home loan rates”.

Gold became the latest safe haven, rising above USD1000 for the second time in history and showing signs that it remains bullish.

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