Feeling the Wall‑Effects of the Virus on Your Wallet?
Everyone’s freaking out about how the “new normal” is denting their bank balance, and homeowners feel the pinch too. House prices are on a slide and a recession is knocking at the door.
What The Government Just Dropped On Us
- Loan relief alert! The lenders are stepping in.
- Mortgage holders can pause payments till 2021—no surprise surprise.
To Pause or Not to Pause?
Is skipping those monthly payments a smart move? Here’s the lowdown you need to consider before you decide.
1. Take a Look at Your Cash Flow
Can you afford to keep the payments on hold? Even if you’re getting a break, you’ll still owe those principal and interest amounts later. Keep your eyes on the long‑run numbers.
2. Check Your Borrower Agreement
Some contracts might splash a penalty on you if you defer. Better to read the fine print—no one likes a surprise charge.
3. Think About Future Home Value
With prices sinking, deferring might not hurt you now, but if the market rebounds, staying on track can keep you in the good seat.
4. Talk to a Financial Pro
Have a chat with your advisor—sometimes a fresh set of eyes can spot hidden pros or cons that you overlooked.
Bottom Line: It’s All About Your Situation
Deferring can feel like a lifesaver when the economy sways, but weigh the trade‑offs. If you’re comfortable with the long‑term cost and have a clear plan, it’s a valid tool. If any doubt lingers, dial up a professional and make a well‑informed call.
Should You Consider Deferring Your Home Loan Payments?
Good News for Singapore Homeowners: Mortgage Payment Hibernation
Hey homeowners! The Monetary Authority of Singapore (MAS) has just dropped a helpful lifeline for those whose mortgage payments got tangled with the chaos of COVID‑19.
What’s the deal?
- You can pause either the whole monthly instalment (but still chip in the interest every month) or just the principal part until the end of 2020.
- If you choose to defer the entire payment, don’t worry—interest on the principal will keep rolling forward.
- The interest side of a deferred loan is a bit of a “no‑interest‑on‑interest” situation. That means you won’t see the tick‑tick of extra interest piling on top of interest.
After the pause—what happens?
Once the deferral period is over, the remaining loan balance and any interest that accrued on the deferred principal will be spread out evenly across the rest of your mortgage term. In plain English: everything gets amortized with the leftover tenure.
So, take a breath, pause that payment, and let MAS help you glide through this finance season without losing your footing.
Am I Eligible for Mortgage Payment Deferment?
Your Mortgage Repayment: What You Need to Know
Ready to prove you’re a reliable borrower? Here’s the quick rundown:
- Repay on Time: Your home loan or mortgage equity withdrawal must be fully paid off by the due date.
- No Late Strikes: You can’t have more than 90 days of overdue payments counted up to April 6, 2020.
Want to postpone your repayments? No worries — just reach out to your lender. For a complete list of contact details, pop over to the ABS page (search online for the latest info).
Should I Defer My Monthly Payment?
Financial Breathing Room: The Flip‑Side of Deferment
Deferment can feel like a deep breath for that monthly mortgage drag—great in the short run, but it’s gotta cost you in the long haul.
Crunching the Figures
Take a $200,000 loan with 20 years left and a sweet 2 % interest rate. Here’s how the math puts the fine print on the table:
- $1,300 more interest if you skip only the principal payments for 9 months.
- $2,930 extra interest if you also extend the whole loan term by those 9 months.
- $1,920 extra interest if you delay both principal and interest for 9 months.
- $3,570 extra interest overall when the tenure stretches by that same 9 months.
When Deferment Makes Sense
Only put your mortgage on hold if you’re truly feeling the squeeze—if cash is tight and you’re struggling to get by. Otherwise, it’s probably wiser to explore other ways to trim those monthly costs.
Alternatives Worth Considering
- Refinance your loan to snag a lower rate and slash future interest.
- Look into shorter‑term options that accelerate payoff and reduce total interest.
- Stick to a steady repayment plan if you’re comfortably on track.
Bottom line: Deferment can give you a moment of relief, but it’s a trade‑off. Weigh the immediate comfort against the hidden cost of extra interest before you hit the “pause” button on your mortgage.
Why You Should Consider Refinancing Your Home Loan
Why Locking In That Old Rate Down the Chain?
So, the Federal Reserve recently gave interest rates a gentle nudge downwards to help cushion the economic aftershocks of COVID‑19. In the meantime, down‑state in Sin‑ge–po, the rates has slipped through the cracks too.
Feel the Jitter? Homeowner’s Might Pay More Than Fresh Loans Do
- Got an older mortgage? You might be stuck with a rate that feels as stale as leftover pizza.
- New buyers & future refunders see rates that look fresher, even if the market’s still a bit bumpy.
Refinancing: A Smart Move (Besides the Trendy “Did‑We‑Just‑Do‑That?”)
Besides the current market “drama,” refinancing often makes sense. Banks love to fire off “super‑introductory” rates—think of it as a, well… a price‑lassy beauty contest to woo fresh clients.
Before You Hit Refinance, Check These:
- Compare your current rate with those popping up on the market. A quick side‑by‑side might give you a sweet deal.
- Ask your lender— do they charge a refinance fee if you hop to another bank?
Answer: Often yes— and you’ll want to add that to your cost‑calculator. - Gauge the total cost of the whole process: loan approval, appraisal, paperwork, any fees— yeah, it’s a bit of a headache but worth the extra savings.
Got Dug‑In a Little Insight?
Check out ValueChampion‘s website for the freshest live interest-rate offers for home loans & refinancing. They’re basically your quick‑check guide to stay on top of the numbers.
Stay Informed
COVID‑19 & Your Home: Why You’re Not in the Belly of a Storm
Jumping into a panic when the headlines buzz about yet another Covid‑19 spike is natural. But remember: buying a house is a long‑term saga, not a sprint.
What Your Home Holds for You
- Home equity grows over years, even when the market takes a few dips.
- Owning a place means you’re not just a passive spectator of the economy; you’re a participant.
- Unexpected events (yes, that includes pandemics) can be slanted by thoughtful financial planning.
Keep Your Eye on the Pulse
Instead of letting market volatility get you rattled, try these everyday hacks:
- Follow the news. Check updates from government offices → you’ll know when rates change or policies shift.
- Book a quick scan of the housing market each week.
- Track mortgage interest trends. If rates dip, it might be the perfect moment to lock in savings.
Stay Informed & Confident
Being in the know gives you that “I’m in control” feeling. Think of it like armour: there’s no guarantee of no storm, but with the right gear, you ride the waves out stronger.
For the most recent coronavirus updates (no link needed), just head over to the official health site or check your trusted news outlet.
Original Publication & Disclaimer
This article first appeared in ValueChampion. All content is shared for general information and does not replace professional financial advice.
