OCBC increased board rate by 0.6%

[sillyme]

hi. just received a letter from ocbc informing of the effective increase of their board rate by 0.6% from July 2015.

[Kelonguni]

ABSD relief should be coming very soon with the coordinated efforts.

TDSR is well structured to cope with the increased interest payments.

Everything has been factored in to ensure sustainable fleecing. I think recent buyers are aware about this already -the effect is to weed out the hyper-leveragers.

[Werther]

what is the effective rate now?

[Werther]

Bro Sillyme

what is the effective rate now? Are you on float or fixed now?

[Kelonguni]

Hi Werther, not too sure if Board rate is associated with fixed? OCBC Board rate was 4.5% previously I think. Please correct if incorrect.

With a board rate of 5.1%, most of the fixed rates loans should be close to 3.5% unless remortgage at low fixed rate. If cannot meet TDSR and some other refinancing conditions, even those with mortgages taken before TDSR implementation will be stuck at high interest rates, weeding out marginal owners to "force out the supply".

Must really give it to our policy makers. Since cannot control interest directly, control indirectly. Really brilliant.

Is this one reason why the forum has been very quiet recently?

[pmet]

Hi Werther, not too sure if Board rate is associated with fixed? OCBC Board rate was 4.5% previously I think. Please correct if incorrect.

With a board rate of 5.1%, most of the fixed rates loans should be close to 3.5% unless remortgage at low fixed rate. If cannot meet TDSR and some other refinancing conditions, even those with mortgages taken before TDSR implementation will be stuck at high interest rates, weeding out marginal owners to "force out the supply".

Must really give it to our policy makers. Since cannot control interest directly, control indirectly. Really brilliant.

Is this one reason why the forum has been very quiet recently?

Yes, cash is king.

[Kelonguni]

Yes, cash is king.

Cash is king only if you have millions.

If not, I would say income and being debt free is king in the face of these coming measures.

Indeed an enjoyment while the party lasts.

[sillyme]

Sorry, went to dreamland after posting. The average interest rate for the first 3 yrs is now 2.08% (from 1.48%). Cute part is that my loan has yet to start as I borrowed 60%. Maybe starting in late this year, I guess. It's like my opponent done a turn around kick before I even stepped in. 😊

[sillyme]

Bro Sillyme

what is the effective rate now? Are you on float or fixed now?

Mine is a variable rate loan as I was unable to get a fixed loan since my house not built yet. A fixed discount against the board rate.

[sillyme]

Actually, come to think about it, maybe the bank is changing the spread (instead of the board rate) as the letter talked about my interest is now 0.6% higher than now (which is zero at the moment)

[wildfaye29]

wtf. i jus completed my reprice w obcb on board rates. 1st reprice instalment will be deducted in May. now increase! knn

[Kelonguni]

wtf. i jus completed my reprice w obcb on board rates. 1st reprice instalment will be deducted in May. now increase! knn

So bad until you changed their bank name from OCBC to OBCB.

[sillyme]

wtf. i jus completed my reprice w obcb on board rates. 1st reprice instalment will be deducted in May. now increase! knn

they have sent the letter of increase to you too? don't mind me asking, what is the effective rate after the increase? I think I can reprice once foc when the house is TOP. if I am still pissed off by then, I would even refinance with another bank.

[henryhk]

they have sent the letter of increase to you too? don't mind me asking, what is the effective rate after the increase? I think I can reprice once foc when the house is TOP. if I am still pissed off by then, I would even refinance with another bank.

I also get increase 0.6%..... After increase is near 2%, but tat will change wen my 3 years contract with the bank is up in September

[sillyme]

I also get increase 0.6%..... After increase is near 2%, but tat will change wen my 3 years contract with the bank is up in September

If u have repriced with them again, didn't they lock you in for a few years? My thinking of repricing is like recontract of Telco contract. 😊 if they stopped at that, it is okay but if they continue to increase in this way (in line with sibor), I better switch to a fixed rate soon.

[henryhk]

If u have repriced with them again, didn't they lock you in for a few years? My thinking of repricing is like recontract of Telco contract. 😊 if they stopped at that, it is okay but if they continue to increase in this way (in line with sibor), I better switch to a fixed rate soon.

I haven't reprice yet. Will call them to see the package for reprice 3 months befo contract. Anyway, fixed rates after 2 years also will not fixed anymore..... I still tink sibor rates most transparent, I remember last time wen I read the papers and mentioned tat the board rate of another bank decrease, I call the bank and they tells me it is for new customers, but wen increase everybody get hit.... a lot of funny tings u know only wen u are in it

[amk]

I have always been saying "board rate" is the worst of all floating rates. bank has complete freedom to change it, at any speed it likes. Worse: you would think "board rate" is across the board for all ppl, the truth is , each individual customer can have his "own" board rate, which means each cohort can be adjusted independently from the others. If you are old enough you will recall someone complaining buying from same new launch project, in the same week, 2 different customers can have 2 diff board rate altogether (so later one get raise 0.5, the other one 0.8). You are at complete mercy of the bank. SIBOR is far better, it's transparent, there is just one.

.... now I just want to observe, the new DBS "FHR", whether it is more like "board rate" (i.e. each can have his own "FHR" that can be changed independently), or it is more like SIBOR (i.e. there is just one FHR for all DBS customers). Any one/broker can comment ?

[MortgageGuru]

I have always been saying "board rate" is the worst of all floating rates. bank has complete freedom to change it, at any speed it likes. Worse: you would think "board rate" is across the board for all ppl, the truth is , each individual customer can have his "own" board rate, which means each cohort can be adjusted independently from the others. If you are old enough you will recall someone complaining buying from same new launch project, in the same week, 2 different customers can have 2 diff board rate altogether (so later one get raise 0.5, the other one 0.8). You are at complete mercy of the bank. SIBOR is far better, it's transparent, there is just one.

.... now I just want to observe, the new DBS "FHR", whether it is more like "board rate" (i.e. each can have his own "FHR" that can be changed independently), or it is more like SIBOR (i.e. there is just one FHR for all DBS customers). Any one/broker can comment ?

I've already mention many times. FHR is much better because...

1) is pegged to Fixed Deposit rate.

2) Transparency is there

It also increase their rate even though people have been saying FHR been staying at 0.4% since it was introduced.

They increase their spread from first year at 0.85% to 1.10%, Thereafter year spread increase from 1.20% to 1.60%.

Their spread is already higher than SIBOR, that's why FHR can still remain low.

[sabian]

Why you no highlight FHR is a rate decided by DBS and DBS alone?

You should also highlight that we are in an era of ample liquidity courtesy of the various central banks and what happens when the competition for liquidity hots up?

Eg: when new products with higher rates that are similar (risk wise) to fd are launched in future?

[leesg123]

The initiative for common folks to invest with gov will have an impact on FHR.

I've already mention many times. FHR is much better because...

1) is pegged to Fixed Deposit rate.

2) Transparency is there

It also increase their rate even though people have been saying FHR been staying at 0.4% since it was introduced.

They increase their spread from first year at 0.85% to 1.10%, Thereafter year spread increase from 1.20% to 1.60%.

Their spread is already higher than SIBOR, that's why FHR can still remain low.

[teddybear]

I believe that Government Saving Bonds will cause fixed deposit rates and FHR and hence SIBOR to increase.............

The initiative for common folks to invest with gov will have an impact on FHR.

[MortgageGuru]

its the same, if FHR were to increase, SIBOR will go even higher.

[teddybear]

Yes, and it looks like Singapore Saving Bonds unintentionally (or intentionally?) forces banks to pay more for Fixed Deposit money..................
On surface, SSB looks like god-sent from Government to help people to get higher returns..........
On the other hand, these people may or may not realize that it is their left pocket paying for their right pocket because they have to pay higher interest rate for their loans! (unless they have no loan at all - all kind of loans, not just property loans, may be car loans, etc).......

its the same, if FHR were to increase, SIBOR will go even higher.

[amk]

I've already mention many times. FHR is much better because....

I certainly hope your are right, that our Temasek bank does indeed have some ethics, not like the other bank that never sleeps.

When SIBOR reaches 1plus later this year let's see if FHR moves.

For me, FHR does not really follow "fixed deposit" rates. No one puts 5000$ for a FD of 1yr at 0.25% with DBS. There is practically no money in that segment. The number there is purely a reference. Whatever number DBS decided to put in that band, has no impact on the real deposit rates the bank pays, i.e. it's real cost of funds. The banks are already raising its deposit rates for the masses ( look at all the FD promotes, special "multiplyer"/"360"/"One"/etc accounts, every one is getting a rate raise ). If you deal with DBS commercially you would know its cost of fund already increased from beg of the year by 10bps now. So how FHR moves is really a DBS decision, whether it wants to be nice: since DBS does not borrow at SIBOR, there is no need for it to have the same jump as that of SIBOR

[sabian]

I certainly hope your are right, that our Temasek bank does indeed have some ethics, not like the other bank that never sleeps.

When SIBOR reaches 1plus later this year let's see if FHR moves.

For me, FHR does not really follow "fixed deposit" rates. No one puts 5000$ for a FD of 1yr at 0.25% with DBS. There is practically no money in that segment. The number there is purely a reference. Whatever number DBS decided to put in that band, has no impact on the real deposit rates the bank pays, i.e. it's real cost of funds. The banks are already raising its deposit rates for the masses ( look at all the FD promotes, special "multiplyer"/"360"/"One"/etc accounts, every one is getting a rate raise ). If you deal with DBS commercially you would know its cost of fund already increased from beg of the year by 10bps now. So how FHR moves is really a DBS decision, whether it wants to be nice: since DBS does not borrow at SIBOR, there is no need for it to have the same jump as that of SIBOR

If I am promoting FHR, I would prefer to keep promoting the myth that if FHR moves, then SIBOR will move even more.

Or else how am I going to churn my customers from sibor to FHR?

When you refi from sibor to FHR, then I have commision mah.

[MortgageGuru]

I certainly hope your are right, that our Temasek bank does indeed have some ethics, not like the other bank that never sleeps.

When SIBOR reaches 1plus later this year let's see if FHR moves.

For me, FHR does not really follow "fixed deposit" rates. No one puts 5000$ for a FD of 1yr at 0.25% with DBS. There is practically no money in that segment. The number there is purely a reference. Whatever number DBS decided to put in that band, has no impact on the real deposit rates the bank pays, i.e. it's real cost of funds. The banks are already raising its deposit rates for the masses ( look at all the FD promotes, special "multiplyer"/"360"/"One"/etc accounts, every one is getting a rate raise ). If you deal with DBS commercially you would know its cost of fund already increased from beg of the year by 10bps now. So how FHR moves is really a DBS decision, whether it wants to be nice: since DBS does not borrow at SIBOR, there is no need for it to have the same jump as that of SIBOR

Honestly put aside in-depth view, we go into humanity, chance of Government raising it high to make majority of its country people to suffer, what are the chances?

By starting with a higher spread than SIBOR, it really shows that FHR being stable is totally reasonable.

[Yuki]

Honestly put aside in-depth view, we go into humanity, chance of Government raising it high to make majority of its country people to suffer, what are the chances?

By starting with a higher spread than SIBOR, it really shows that FHR being stable is totally reasonable.

My university loan was with DBS many years back.

Lets just say when it comes to $$...all traces of humanity goes out of the window. From there onwards lesson learnt, I realise when it comes to money...it doesnt matter at all.

[Esso99]

I have also received the letter on increase lf board rates by 0.6 percent
My third year interest rate after increase would be 1.98 percent
So i quickly jumped over repricing to fixed rate 2 years lock in at 1.98 percent which would coincide with two year rental tenure.
At least piece of mind

Last i know, ocbc has increased their fixed rate to 2.18 percent already....

[henryhk]

I have also received the letter on increase lf board rates by 0.6 percent
My third year interest rate after increase would be 1.98 percent
So i quickly jumped over repricing to fixed rate 2 years lock in at 1.98 percent which would coincide with two year rental tenure.
At least piece of mind

Last i know, ocbc has increased their fixed rate to 2.18 percent already....

How long it takes to reprice? Got repricing fee? Need go tru TDSR?

[Esso99]

How long it takes to reprice? Got repricing fee? Need go tru TDSR?

Nope, no repricing fee as i had one time free conversion.
MAS waived tdsr requirements for ppty bought before june 2013 if it is owner occupied. Need to show proof of ownership and a whole lot of documents. For mine, investment, just needed to make 3% partial capital repayment and can reprice without any tdsr rules...