IN THE article, 'S'pore economy likely to cool to slower pace this year' (ST, Jan 1), it was reported that 'mortgage borrowers can heave a sigh of relief. Interest rates, which have risen relentlessly since 2004, appear to have peaked and can only head down ...'.

For me, I heaved a sigh of disbelief and despair. Three weeks ago, United Overseas Bank (UOB) informed me that my home-loan interest rate will be increased by a full percentage point.

I was surprised by the increase, given the general interest-rate trend. Ironically, the article quoted economists from the bank as expecting the local benchmark interest rate to slide to 3.2 per cent from the current 3.44 per cent.

I had assumed that my floating interest rate, pegged to UOB's board rate, would be tied to the local benchmark interest rate. Hence, my interest rate would fall, in line with the market trend. I was wrong.

While the bank was quick to raise home-loan interest rates when general interest rates were going up last year, this is not the case when general interest rates go down.

I also discovered that UOB has multiple board rates - different rates for different customers. When I asked about the board rate as a new customer, I was quoted a lower rate, presumably to attract new customers.

To me, the UOB board rate is non-transparent, arbitrary and biased against its customers.

More can be done to protect the interests of home-loan customers. I urge the Monetary Authority of Singapore to look into this issue.

Chai Ming Yao