Should i change my Mortgage Loan from SOR to SIBOR?

[newbie11]

I think most of you has this wrong idea of refinancing to a fixed rate and thereafter 3 years you'll be paying a much higher rate compared to floating.

If you hold on to floating, when interest rate rise, all rates irregardless of SIBOR/SOR/FIXED/BOARD/ will be affected and increase as well.

So if you get a fixed package now. At least when it rise up in the next 2-3 years you are still paying a lower rate compared to holding on SIBOR.
If you're holding on to floating, by them you will also be payin higher than FIXED rate.

Thereafter, when you're holding a high fixed rate and if the market does not show any signs of increment, you can still go back to SIBOR as the spread will not have a drastic increment.

If you're holding on 0.7 + 3M SIBOR, you're already paying 1.1%
Take a three year fixed rate to compare whereby the third year highest currently is only 1.55%
if SIBOR rise by a small 0.5% , you are paying 0.7 + 0.9 which is 1.6%
Worse still, you're still subjected to a further hike whereby the chance of hitting 2% per month for your interest is not a far-fetched possibility.
By end of 1st quarter next year,its highly speculated that every month interest average at 1.5% at least.

A smart person will always do something to their loans after 2-3 years when their lock-in/penalty is out of effect.

If you're paying more than 1.1% for your floating rate and you think is a good choice,well... All the best.
Just remember that when the market rise, everything rise as well,especially SOR. Do take note of the chart and see how much SOR usually rises more compared to SIBOR.

Sibor rise by 0.5 is not small. It's more than 1100%.

[MortgageGuru]

As a broker yourself,I believe you too feel that a 0.5% rise in SIBOR in the next feel month ain't impossible.
By the way,It's actually 125%, not 1100% if you do bother to calculate.

[MortgageGuru]

Sibor rise by 0.5 is not small. It's more than 1100%.

In any case, your company's website is able to state SIBOR RATE for the next few years.
This is really impressive as you're able to foretell the future that SIBOR will continue to stay at 0.41% when it stated that first to third year is at 1.21%.

Even Janet Yellen have to bow down it you,I suppose?

[lifeline]

Thanks. We signed up the package 3+ years ago. Chose and confirmed that 1st year started from disbursement. Another 2 years for us to wrap up the loan 1 way or another.

Different bank have different ways to work.
Not every bank alway go by first disbursement date, you should always go by first disbursement though.
But the difference is always just a few months usually.

As for your case, its plain that after your 3rd year you will have to refinance as you'll only be rising up.

[MortgageGuru]

Thanks. We signed up the package 3+ years ago. Chose and confirmed that 1st year started from disbursement. Another 2 years for us to wrap up the loan 1 way or another.

You're welcome!
Your package is actually quite good to be honest.
I've seen some owners with 1.98% on the third year which is now.
We're all here for the same purpose, to further our wealth benefits!