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

  1. #1

    Default 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?��

  2. #2
    Join Date
    Nov 2008
    Posts
    2,427

    Default

    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.

  3. #3

    Default

    Quote Originally Posted by thomastansb View Post
    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.

  4. #4
    Join Date
    Oct 2012
    Posts
    1,160

    Default

    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.

  5. #5

    Default

    Quote Originally Posted by star View Post
    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.

  6. #6
    Join Date
    Jun 2009
    Location
    Southbank
    Posts
    8,035

    Default

    Quote Originally Posted by MortgageGuru View Post
    this is based on individual profile.
    True, when they have enough of this people guess they will start to think.

  7. #7

    Default

    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?

  8. #8

    Default

    Quote Originally Posted by wildfaye29 View Post
    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.

  9. #9
    Join Date
    Mar 2009
    Posts
    10,799

    Default

    What is OHR?

    Quote Originally Posted by wildfaye29 View Post
    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?

  10. #10

    Default

    Quote Originally Posted by teddybear View Post
    What is OHR?
    OCBC HOME RATE (Long term average of 1 & 3 months SIBOR for the past 12 years)

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