Should i change my Mortgage Loan from SOR to SIBOR?

[Yellow Horse]

Hi Folks,

SOR has been seeing pretty low rates since i started my loan in 2011. But with the current situation, SOR has been on the rise.

Last year, banks sent me letters encouraging me to switch to SIBOR, which i didn't because i don't trust banks as a rule of thumb.
But market sentiments seems to be leaning towards SIBOR. Or it seems most of the time people choose SIBOR for 'stability' against SOR.

Do you guys think i should make the switch to SIBOR or continue with SOR?

[minority]

SIBOR all the way!

[mummy]

My terrace house also has a SOR package since 2010 and the rates are still low so not changing to SIBOR or refinancing it yet..

[newbie11]

Why u say sor is on the rise
http://findahomeloan.co/Interest-Rat...OR-Chart-Rates

[Yellow Horse]

Yes i realised it was still low. But i realised i'm 4th year into the loan. Bank told me i will need to pay $800 if i want to reprice my loan with them.

Do they charge if i refinance (with another bank)?

[DC33_2008]

Why do you have to pay when you reprice? Is it a local bank? There will certainly be charges if you refinance with another bank given that the current climate. Can you see FD deposit is increasing?

[chestnut]

Why do you have to pay when you reprice? Is it a local bank? There will certainly be charges if you refinance with another bank given that the current climate. Can you see FD deposit is increasing?

For banks to "steal" customers, they would do legal subsidy leh.....

with tdsr, banks are finding it to grow the loan....

But with refinancing, wa lau, the amount of paper work is super scary..... hahahahaha

[Yellow Horse]

Thanks for all the info. SOR is still low and won't be doing any switch.

But since i have asked the bank, yes its the local Dxx bank. She told me there will be a $800 if a reprice. Wow.

[DC33_2008]

I have also asked my bankers a couple of months ago on reprice or refinance and their advice is to put given that the spread has moved up quite a bit.

Thanks for all the info. SOR is still low and won't be doing any switch.

But since i have asked the bank, yes its the local Dxx bank. She told me there will be a $800 if a reprice. Wow.

[newbie11]

Not really. Still competitive and not as scary as what some may think

[MortgageGuru]

Yes i realised it was still low. But i realised i'm 4th year into the loan. Bank told me i will need to pay $800 if i want to reprice my loan with them.

Do they charge if i refinance (with another bank)?

You do not need to pay if you refinance to other bank.

But in terms of documentations,you have to pay for;

1: Valuation Fees
2: Legal Fees

Most bank packages comes with Legal Subsidy/Valuation Subsidy which covers about 0.4% of loans capped at $2000-$3000 and $500 respectively.

[Werther]

Hi

I am thinking of repricing of my current loan as interest has increased to >3%.. But my current bank also charge $800 processing fee ...Now trying to negotiate to waive.. Is it possible?

Thinking also to get another property, the mortgage banker is keen to promote term loan? What is difference between term and housing loan?

[henryhk]

Hi

I am thinking of repricing of my current loan as interest has increased to >3%.. But my current bank also charge $800 processing fee ...Now trying to negotiate to waive.. Is it possible?

Thinking also to get another property, the mortgage banker is keen to promote term loan? What is difference between term and housing loan?

Wat kind of interest? Increase to more than 3%, where got so fast

[teddybear]

Got lah, those board rate loan....

Wat kind of interest? Increase to more than 3%, where got so fast

[Werther]

Wat kind of interest? Increase to more than 3%, where got so fast

I m not sure if board rate or what, from 1.x percents to 3.75%...board rate loan got different form sibor or sor loan? Kindly enlighten.

[teddybear]

Board rate loan very super!
Every person can have different "board rate" from the same bank!
If you are on SIBOR or SOR, no matter what cannot be >3% NOW! This is because SIBOR very transparent one........ Be careful of SOR though.......................

I m not sure if board rate or what, from 1.x percents to 3.75%...board rate loan got different form sibor or sor loan? Kindly enlighten.

[henryhk]

I m not sure if board rate or what, from 1.x percents to 3.75%...board rate loan got different form sibor or sor loan? Kindly enlighten.

could be the board rate, u can check your contract...3.75% is v high at this moment, if no penalty, ask for repricing and may want to change to sibor rate, and ask for discount of the $800, ....u can save alot of money in the long run

[Werther]

Thanks all. I m now under no lock variable package...what is the different with the above sibor or sor rates?

[heehee]

SOR heavily influenced by USD exchange rate.

If USD vs SGD goes up (very high chance within next few years), SOR will go up more rapidly than SIBOR. However, if you have very heavy USD exposure, then doesn't matter.

Thanks all. I m now under no lock variable package...what is the different with the above sibor or sor rates?

[Ringo33]

SOR heavily influenced by USD exchange rate.

If USD vs SGD goes up (very high chance within next few years), SOR will go up more rapidly than SIBOR. However, if you have very heavy USD exposure, then doesn't matter.

Are you sure its exchange rate and not interest rate?

I am very sure you are making big money

I am very sure I am smarter than you are!
So, you better listen!
I know you have a lot of time here to quarrel, but not me. I have better things to do outside of this forum & making big money there!
Why waste so much time quarelling here instead of going out there to make real money?

[Ringo33]

Board rate loan very super!
Every person can have different "board rate" from the same bank!
If you are on SIBOR or SOR, no matter what cannot be >3% NOW! This is because SIBOR very transparent one........ Be careful of SOR though.......................

Board rate is constant, its the discount rate that varies.

[Werther]

could be the board rate, u can check your contract...3.75% is v high at this moment, if no penalty, ask for repricing and may want to change to sibor rate, and ask for discount of the $800, ....u can save alot of money in the long run

Bro Henry

Did you go for fixed or unfixed rates?

I am still unsure, scared unfixed. but next year interest rate chiong up...

any advice here?

[MortgageGuru]

Bro Henry

Did you go for fixed or unfixed rates?

I am still unsure, scared unfixed. but next year interest rate chiong up...

any advice here?

Go for fixed rate.
Just a jump of 0.5% for floating will result in you paying over 1.6-7%

I've pm-ed you as well I believe it's pretty clear that fixed rate is the way now.

[DC33_2008]

Question is fixed rate offered is for three years. What happen next?

Go for fixed rate.
Just a jump of 0.5% for floating will result in you paying over 1.6-7%

I've pm-ed you as well I believe it's pretty clear that fixed rate is the way now.

[lifeline]

agree with you Bro DC33.

fixed rate is good for first 3 years - provided the lender has the liquidity to pay up all or most in the 4th year once interest rate moves higher or plan to exit by selling then.

sibor is good for its flat thereafter rates, esp if TDSR may be affected in the future.

different people different strokes, no good or better scheme.
Bro Werther, you must review your position and future plan fully.

Question is fixed rate offered is for three years. What happen next?

[Werther]

Bro lifeline and DC33
Thanks for the advice. Have intention to pay up in one or 2 year time... You think safe to go unfixed package? Only worry if rates suddenly shoot up next year and got to pay penalty....

[DC33_2008]

Only pay up if interest rate is higher than the interest rate of investment with the same money.

Bro lifeline and DC33
Thanks for the advice. Have intention to pay up in one or 2 year time... You think safe to go unfixed package? Only worry if rates suddenly shoot up next year and got to pay penalty....

[lifeline]

One of my loan is 0.68 0.9 1.3. While most chose sibor then, we took variable rates. Now just after top it is still 0.68 and 0.9 from next month. Need to remember that the 1st year of loan only starts from 1st disbursement.

Bro lifeline and DC33
Thanks for the advice. Have intention to pay up in one or 2 year time... You think safe to go unfixed package? Only worry if rates suddenly shoot up next year and got to pay penalty....

[MortgageGuru]

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.

[MortgageGuru]

One of my loan is 0.68 0.9 1.3. While most chose sibor then, we took variable rates. Now just after top it is still 0.68 and 0.9 from next month. Need to remember that the 1st year of loan only starts from 1st disbursement.

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.