If there is further increase on the fed rates, there is a high chance that the Gov will introduce another round of tweaking to have the TDSR stress test at 4.5%
The explanation is that if the stress test is lower than the actual interest rates, then it’s not called a stress test anymore.
Right now, for private properties the floating SORA cheapest rate is at (3M SORA plus 0.55%) 2.96% offered by Citibank, with the remaining banks all above 3%.
Fixed packages are at 3.5% across most banks.
The history of interest rates have been perceived to be low since 2010, the period after the Lehman crisis of 2008.
After 12 years of low interest rate environment, it seems that we are slowly returning back to the “normal interest rate” in the past.
A lot of the past investment strategies that uses cheap debt may not be workable anymore and this is the time to review the numbers of you haven’t done so.
Debt is a double edged sword that needs to be managed properly to reduce the expenses from borrowing.
If need be, spend sometime to work out the sums to avoid paying tens of thousands dollars wastefully to the banks.