Are you considering buying a property but worried about the high interest rate? It's understandable to feel hesitant, but did you know that it can actually be a good time to make a purchase?
When interest rates are high, the cost of borrowing money to buy a property also increases, making it more expensive to finance your purchase. This can seem like a disadvantage, but it also means that there are fewer buyers in the market, which can lead to a decrease in demand and lower property prices.
For example, in Singapore, there are TDSR and MSR restrictions which limit the amount of eligible loans based on income and benchmark rates. When the interest rate is high, the eligible loan amount decreases, which means that buyers can afford less expensive properties and may not be willing to pay high monthly mortgage installments.
However, if you have enough cash or income to secure the loan you want, this is a great opportunity to find a good property at a lower price. You can also consider a floating rate for your mortgage or refinance after two years.
If you wait for the interest rate to drop, you may miss out on the chance to get a good deal. When the interest rate decreases, demand will increase, and so will property prices. So, it's better to take advantage of the current market situation and buy a property when interest rates are high.
Don't let high interest rates discourage you from buying a property. With careful planning and consideration, you can find a great deal during this time. So, start your property hunt today and make the most of the current market conditions!