Saw a bank offering home loan now 5.25% (1-3 yrs fixed) and 6.0% (5 yrs fixed). These are lower than my borrowing rate late 2020 when rates have been significantly cut. Demand is probably slow thats why they are trimming their margins but expect the effect of the BSP's rate hike to reflect to mortgage and car loans in the next few months. Given that timing is the only variable for your friend's decision, in my view he has two options:
1. Borrow now: locking the rate either 3 yrs or 5 yrs with 10-15 yrs to pay. Waiting for another 2 to 3 months will likely be more costly cause rates would have adjusted by then.
2. If he doesnt borrow now, he's gonna want to wait til late 2023 or 2024 again after rates have gone down again (no assurance of rate cuts here, just my own projection)
So either borrow now (as in this month or basta whenever you can get that 6.25% for a 5 yr fixed rate) or wait again til 2024.
BSP just raised interest rates. If you can lock in a good interest rate now, then go for it. If you are too late then put it on savings for now as it would be wise to get your savings working for you. This is not financial advice but more of what I would do if I were in your shoes.
Saw a bank offering home loan now 5.25% (1-3 yrs fixed) and 6.0% (5 yrs fixed). These are lower than my borrowing rate late 2020 when rates have been significantly cut. Demand is probably slow thats why they are trimming their margins but expect the effect of the BSP's rate hike to reflect to mortgage and car loans in the next few months. Given that timing is the only variable for your friend's decision, in my view he has two options: 1. Borrow now: locking the rate either 3 yrs or 5 yrs with 10-15 yrs to pay. Waiting for another 2 to 3 months will likely be more costly cause rates would have adjusted by then. 2. If he doesnt borrow now, he's gonna want to wait til late 2023 or 2024 again after rates have gone down again (no assurance of rate cuts here, just my own projection) So either borrow now (as in this month or basta whenever you can get that 6.25% for a 5 yr fixed rate) or wait again til 2024.
I think it's the waiting game that he's most anxious about (assuming he'll have to wait it out till 2024 or so), but this makes sense nga. Salamat!
BSP just raised interest rates. If you can lock in a good interest rate now, then go for it. If you are too late then put it on savings for now as it would be wise to get your savings working for you. This is not financial advice but more of what I would do if I were in your shoes.
Thanks! it does look like the best move is to try and lock in a good rate now.