Hi Covers, welcome to the forum!
I suppose a question to ask is if lower rates are so simple to get why isn’t everyone doing it, a kind of x-border mortgage arbitrage? The apparent benefit is lower SGn rates but the cost? It reminds me of the question we sometimes see, ‘Why should I have a bank deposit in Singapore earning X%, when if I convert it and put it offshore into the Bank of Bongoland it’ll earn 4X%!?’.
In a perfectly liquid financial market you might suggest any benefit you gain via lower or higher interest% will be matched precisely by a respective gain or loss on the FX rate.
As the notes on the ‘DBS Treasures’ [‘scuse me while I figure out whether to laugh or chuck over that...]
‘
A note before you invest
Overseas properties are subject to inherent foreign exchange risks. For instance, if your loan is in Singapore Dollar (SGD), and it weakens against the Sterling Pound (GBP) or Australian Dollar (AUD), you may have to top up the difference in cash.’
https://www.dbs.com.sg/treasures/loans/ ... -financing
And you have no control over where that FX rate will go, so it’s a material risk. But the %rate differential forewarns you that bet is not going to go your way...
The other thing is these x-border mortgages are usually pitched at 2nd home owners; wealthier people. That’s why you see them connected with $/premium banking services. And what’s the reference to ‘Hedge fund’? Is that x-selling investment products, or a compulsory hedge on your FX exposure? You could try and go through a worked example including all costs and see how it stacks up vs your current loan.
