Due to rising interest rates, homeowners in Singapore will face higher mortgage payments.
The country's three largest banks raised housing loan rates in June after the U.S. Federal Reserve hiked interest rates.
The rates on the two- and three-year fixed packages were raised by the three major banks. The three-year fixed rates were at 1.15% at the time.
The increase in rates is not surprising, according to property experts.
Christine Li, head of research for Asia-Pacific at Knight Frank, said that a housing loan with a rate of 2% is considered "super cheap".
Two years of very low mortgage rates would have been enjoyed by homeowners with an existing property.
People who own private properties and have a bank loan are feeling the pinch.
Tan, who works in a software company and wanted to be referred to only by her last name, and her husband bought a condominium in Singapore in 2021. They applied for a two-year fixed rate mortgage from a local bank.
When she heard that they wouldn't be affected immediately, she was a bit relieved. When she realized their mortgage could go up at the end of the year, she panicked.
She said that the couple will be paying more for their mortgage in the future.
We would have to cut back on spending on things we don't need, like eating out less and shopping less.
The situation is similar for Singaporean owners of public housing apartments, known locally as HDB flats, whose mortgages are also tied to bank loans.
Regine is a public affairs executive who wants to be referred to only by her first name. She bought a four-room resale apartment in 2020 with a five-year fixed rate package from the bank.
It is a relief that we have a good deal and that we are safe for the next few years. The interest rates are insane.
The bank rates will not be higher than HDB rates in the next five years due to the volatile markets.
She said that if interest rates remained high, the couple would still be very comfortable because they didn't spend more than they earned.
With the current rate hike, Singapore residents who own public housing could see their monthly mortgage increase by $200 to $300.
Flat owners who took out a HDB housing loan may be in a better position.
The loan interest is less than the bank loan packages.
Even though the bank loan rates were more attractive in the year they purchased the house, she felt at ease with their decision to go for an HDB loan.
Five years ago it was a fight between the bank and HDB loan, but now it is a different story. It would have affected our finances a lot if we had taken a loan.
New measures were put in place in December to cool the country's hot property market. Taxes were raised on second and subsequent property purchases.
According to the ministry of national development, the government will increase the supply of public and private housing.
Mortgage prices in Malaysia have not changed much.
The country's central bank hiked interest rates on July 6 but property experts said the increase won't affect mortgage prices.
The increase in mortgage loans may cost a Malaysian investor about $100 per property.
According to Knight Frank's Li, people with multiple properties will have their cash outlay eaten into every month. Investment property owners can adjust the rental rates to have higher returns if the rental market is stable.
With Malaysia's economy still recovering from the Pandemic and the country's housing surplus, he would rather "absorb the cost of higher mortgages, rather than raising rents."
CNBC had a contributor to the report.
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