If you are keen on taking up a home loan that is pegged to SIBOR (Singapore Inter-Bank Offset Rate), you would be keen to find out if SIBOR rates will be going up or down in the coming years.

The rates that the banks in Singapore lend to each other (aka SIBOR) usually goes according to the inflation rate which is at -0.4% year after year. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power.

If the inflation rate increases, banks need to lend their money above the usual rate to avoid the money from losing value. This is why when inflation rate increases, SIBOR rates increase as well.

And that would then affect the interest rates for your mortgage.

The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. Singapore along with Hong Kong, South Korea and Taiwan is one of the Four Asian Tigers. Singapore has a highly developed and successful free-market economy. It enjoys a per capita GDP higher than that of most developed countries. The economy depends heavily on exports, particularly in consumer electronics, information technology products, pharmaceuticals, and on a growing service sector. - Information from Trading Economics