Why OCBC OHR rate is the best in market!

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09-01-18, 16:48
MortgageGuru

Why OCBC OHR rate is the best in market!

The current OHR rate is at 1%.

It works by using the long term average 1 & 3 month sibor for the past 12 years.

Past rate:

END OF
PERIOD INTERBANK
1-MONTH INTERBANK
3-MONTH
2006 3.44 3.44
2007 2.00 2.38
2008 0.75 1.00
2009 0.44 0.69
2010 0.31 0.44
2011 0.31 0.38
2012 0.31 0.38
2013 0.37 0.40

The past 12 years meaning OCBC derived their 1% OHR from 2006-2017.

2006 average is at 3.44%
2007 at 2.19%
2008 at 0.875%
2009 at 0.565%
2010 at 0.375%
2011 at 0.345%
2012 at 0.345%
2013 at 0.385%

Grand total of these 8 years = 8.52%
This means that 2014-2017 total is 3.48% in order for the 1% P.A theory to stand because 12% / 12 years = 1%

Current 1 & 3SIBOR average stands at approximate 1.41%, highest in recent time with 0.3% increment in two month span.
The highest spike for SIBOR was at 0.88% during a one month period from 2008 August to September. If you remember, this happened during the financial crisis period.

forecast:
Assuming 1 & 3 month sibor steadily increase 0.3% for the 3 years we will see it like this

2018: 1.41%
2019: 1.71%
2020: 2.01%

Grand total of 5.13% increment for the next 3 year while 2006-2008 phased out at 6.505%. This still result in 1.375% drop from 12% to 10.625%, averaging it out to be 0.88% for OHR for your 3rd year.

real 3 years forecast

2018 1&3 month sibor conservative to be at 1.5%
2006 phased out 3.44%
Average rate to stand at 12% + 1.5% less off 3.44% = 10.06% divide 12 = 0.838%

Expected EIR to be 0.838% + 0.5%(deviated based 1st year) = 1.338%

2019 another 0.5% increment will result in 2%.
2007 phased out 2.19%.
Average rate 10.06% + 2% less off 2.19% = 9.87% divide 12 = 0.823%

Expected EIR to be at 0.823% + 0.5% = 1.323%

2020 another 0.5% to make it 2.5%
2008 phased out 0.875%.
Average rate 9.87% + 2.5% less off 0.875% = 11.495% divide 12 = 0.958%

Expected EIR to be at 0.958% + 0.7% = 1.658%

Basically, this is almost a fixed rate and you'll be going in for this rate at:

1st year: 1.6%
2nd year: 1.338%
3rd year: 1.323%
4th year: 1.658%

This is assuming sibor at a ascending order of 0.5% each year for the next 3 years, if it's lower than 0.5% increment each year, your savings will be even higher!

Now, do you agree OCBC OHR rate is the best in market now?��
09-01-18, 20:41
thomastansb

The only inconsistent thing is they put it at 1% now. Why 1%? We know the 12 years average is more than 1%. My guess is the rate is artificially depressed to give an impression that the rate is low and when they really take the REAL average, the actual % will go up. This will only happen when they have enough customers. By then, what can you do? Pay 2k to refinance also not worth it. Can only suck thumb and pay them.
10-01-18, 01:01
MortgageGuru

Quote:

Originally Posted by thomastansb

The only inconsistent thing is they put it at 1% now. Why 1%? We know the 12 years average is more than 1%. My guess is the rate is artificially depressed to give an impression that the rate is low and when they really take the REAL average, the actual % will go up. This will only happen when they have enough customers. By then, what can you do? Pay 2k to refinance also not worth it. Can only suck thumb and pay them.

You'll have to check on the past chart. It is indeed at 1%.
I see no ways that ocbc can play with the fineprint like how CITI did couple years back.
We should see OHR drop below 1% in the upcoming review.
10-01-18, 05:16
star

Hard to say. Look at ocbc credit card when my friends ask for annual fee wavier they said No, cannot. Most banks will have their annual fee wavier for u when u call them.
10-01-18, 17:04
MortgageGuru

Quote:

Originally Posted by star

Hard to say. Look at ocbc credit card when my friends ask for annual fee wavier they said No, cannot. Most banks will have their annual fee wavier for u when u call them.

this is based on individual profile.
10-01-18, 20:03
Arcachon

Quote:

Originally Posted by MortgageGuru

this is based on individual profile.

True, when they have enough of this people guess they will start to think.
15-01-18, 19:36
wildfaye29

I was offered these 2 OHR packages

1) Fixed (2 year lock)

1.85% (OHR Fixed + 0.85%)
1.85% (OHR Fixed + 0.85%)
1.90% (OHR + 0.90%)
2.00% (OHR + 1.00%)

2) Floating (2 year lock)

1.65% (OHR + 0.65%)
1.65% (OHR + 0.65%)
1.70% (OHR + 0.70%)
1.80% (OHR + 0.80%)

Which is a better bet?
17-01-18, 20:27
MortgageGuru

Quote:

Originally Posted by wildfaye29

I was offered these 2 OHR packages

1) Fixed (2 year lock)

1.85% (OHR Fixed + 0.85%)
1.85% (OHR Fixed + 0.85%)
1.90% (OHR + 0.90%)
2.00% (OHR + 1.00%)

2) Floating (2 year lock)

1.65% (OHR + 0.65%)
1.65% (OHR + 0.65%)
1.70% (OHR + 0.70%)
1.80% (OHR + 0.80%)

Which is a better bet?

Why were you tied with a lock in? There should not be any lock in besides 1 year refinancing penalty.
17-01-18, 21:18
teddybear

What is OHR?

Quote:

Originally Posted by wildfaye29

I was offered these 2 OHR packages

1) Fixed (2 year lock)

1.85% (OHR Fixed + 0.85%)
1.85% (OHR Fixed + 0.85%)
1.90% (OHR + 0.90%)
2.00% (OHR + 1.00%)

2) Floating (2 year lock)

1.65% (OHR + 0.65%)
1.65% (OHR + 0.65%)
1.70% (OHR + 0.70%)
1.80% (OHR + 0.80%)

Which is a better bet?
17-01-18, 21:34
MortgageGuru

Quote:

Originally Posted by teddybear

What is OHR?

OCBC HOME RATE (Long term average of 1 & 3 months SIBOR for the past 12 years)
17-01-18, 22:25
teddybear

Ok Thanks!

Quote:

Originally Posted by MortgageGuru

OCBC HOME RATE (Long term average of 1 & 3 months SIBOR for the past 12 years)
17-01-18, 22:25
Kelonguni

Quote:

Originally Posted by MortgageGuru

OCBC HOME RATE (Long term average of 1 & 3 months SIBOR for the past 12 years)

Sexy proposal indeed!
17-01-18, 22:26
teddybear

SIBOR is quite volatile nowadays.
For the big 3 local banks, should go for FD-based mortgage loan.

Quote:

Originally Posted by wildfaye29

I was offered these 2 OHR packages

1) Fixed (2 year lock)

1.85% (OHR Fixed + 0.85%)
1.85% (OHR Fixed + 0.85%)
1.90% (OHR + 0.90%)
2.00% (OHR + 1.00%)

2) Floating (2 year lock)

1.65% (OHR + 0.65%)
1.65% (OHR + 0.65%)
1.70% (OHR + 0.70%)
1.80% (OHR + 0.80%)

Which is a better bet?
17-01-18, 22:45
Kelonguni

Quote:

Originally Posted by teddybear

SIBOR is quite volatile nowadays.
For the big 3 local banks, should go for FD-based mortgage loan.

12 year average rate should be quite stable. Sexy!
18-01-18, 05:19
MortgageGuru

Yes 12 years is very stable. Even if sibor goes up by 2% now OHR likely to remain at 1% still.
03-03-18, 11:44
buyer_east

How do I get a in principle approval for my loan?
05-03-18, 22:57
MortgageGuru

Normal application of loans.
31-10-19, 19:21
bargain hunter

Re: Why OCBC OHR rate is the best in market!

seems like a fresh mortgage loan refinancing war has started? Stanchart offering 2 years fixed at 1.82% and another 4 or more banks in the range of 1.85% to 1.89%.