Global Mortgages

Because of the global credit crunch and sub-prime related problems in the US, it is becoming increasingly challenging to obtain international mortgages due to the reluctance of banks to lend. As an example of this, the number of mortgages approvals for house purchases in the UK are currently at a 15-year low.

However, competitive mortgage products still exist to cater to property investors with the ability to put up large initial deposits. Furthermore, banks in Asia’s financial hubs of Singapore and Hong Kong retain their ability to provide property financing for international real estate.

The following is an overview of the dynamics of the global mortgages scene:

Singapore-based international banks offer global mortgages with interest rates as low as 2.5%, compared to 10% rates in the aftermath of the 1997 Asian financial crisis.

Due to Singapore’s sustained economic growth buoyed by major infrastructure projects,  local banks are able to repark their surplus funds in better yielding corporate loans and papers instead of the falling interbank market.

According to the Monetary Authority of Singapore (MAS), the Singapore mortgage market was valued at S$73 billion (US$54 billion) in 2007, up 15% from 2006. 

4.

Whilst the number of property sale transactions in Singapore has slowed down during the first half of 2008 compared with the previous year, the SIBOR (Singapore Inter-Bank Offer Rate) is at its lowest for 5 years.

5.

This fall in base rate has led to an increase in homeowners refinancing their mortgage loans in Singapore during 2008. As such, the trend is expected to be reversed with ‘refinancing’ as the key driver in 2008 and representing circa 75% of all mortgages this year.

6.

Because of favourable lending conditions in Singapore, Healy Consultants receives requests from international property investors to source finance for their overseas property investments. Singapore-based banks provide international mortgages specially for properties not only in Singapore but also Australia, the UK and other select European and North American locations.

7.

The global mortgage plan is normally available in multiple currencies, allowing mortgage holders to switch currencies several times in a year to avail of beneficial currency fluctuations.

8.

When determining the home loan amount, Singapore-based banks normally require i) a full property valuation to be carried out and ii) a deposit of up to 25% of the property value.