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Choosing Between Fixed or Floating Rate for a Housing Loan

By Wong Kon How

I understand that the floating rate now is currently higher than the fixed rates. This is call inverted yield. If your loan is due for renewal. To choose fix or float? I hope this chart will provide you with some insight.


If you believe this interest rate trend to continue to rise, you might want to consider fixing it.


However, if you anticipate that this trend will eventually return to its downtrend, then can could consider floating. Disclaimer: Both scenarios can occur.

On 19 Feb 2022, I pointed to a childhood friend that it was time to lock in a 2 years fixed rate at 1.6% for his housing loan. He responded "...see how see how...". On May 2022, it jumped to 2.6%, prompting him to fix it.


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