In Singapore, floating rates packages are usually pegged to Sibor rates. The Sibor rate is the rate at which banks lend to each other (bank’s cost price). Floating rate packages have additional percentage above the Sibor rates, known as the spread. The lower the spread, the better.

If you expect interest rates to rise during the next 2-3 years,you should take a fixed rate package. If you expect it to fall, floating rates may be more advantageous. If you are not one to regularly monitor the market, fixed rates would offer you peace of mind and you can rest assured of your monthly payment amounts.