Despite economic woes such as inflation, volatile oil prices, and a slowdown in economic growth, banks in Singapore are still offering mortgages with low interest rates.

The latest bank to do so is Malayan Banking (Maybank), which recently launched a new three-year variable home loan offering low interest rate of 1.68 per cent a year for the first year. The rates increase to 2.48 per cent for the second year and 2.88 per cent in the third year.

Prior to Maybank’s new package, there were two other home loans launched by Standard Chartered Bank (Stanchart) and HSBC, with both offering competitive interest rates.

Stanchart’s MortgageOne Sibor (Singapore Interbank Offered Rate) is priced at 0.9 per cent a year above the three-month Sibor for the first three years and comes with an offset feature where customers may use the interest earned on their deposits to reduce the interest payable on their home loans.

Meanwhile, HSBC’s home loan, also pegged to Sibor, offers a progressive interest rate reduction feature. On top of the three-month Sibor rate, customers pay additional interest of 0.75 per cent during the first year. The rates then fall to Sibor plus 0.65 per cent in the following year and from the third year onwards, Sibor plus 0.55 per cent.

Many home owners are expected to refinance their home loans with packages that are pegged to a faltering Sibor, especially since these home loans offer more transparency.