SIBOR or SOR?

SIBOR is generally more stable while SWAP tend to fluctuate more. However 3-month SWAP has recently stayed consistently lower than 3-month SIBOR for an extended period of time. SOR is also very reactive to currency exchange rates.

Which bank offers the best home loan deals?

Interest rates and spreads are not all that matter. Don't ignore the closing costs involved. Different banks can have different customized home loans for you. Don't be surprised if you will save more on a home loan that charges more interest because of the lesser closing costs involved. This is especially so if you know that you will refinance your home loan as soon as the lock in period has expired.

HDB loan or bank housing loan?

Our opinion is to always take a HDB concessionary loan if you are eligible for one. One of HDB's objectives is to to provide affordable housing for the people. While a bank is profit driven.

Fixed Rate Mortgage

By definition, fixed rate mortgages are home loans with interest rates throughout the tenure of the loan.

There are no home loans in Singapore with a fixed interest rate throughout the 20 years or or years while it is being repaid by a borrower.

But banks continue to market their mortgages that have as short as a 1 year fixed interest rate as fixed rate mortgage. After which, the interest rate floats according to the index it is pegged against plus a spread.

Lock-in periods often come with fixed rate home loans in Singapore that runs parallel to the period of fixed interest rate.

For example, a loan at 1.50% for the first 2 years will have a 2 year lock-in period. Should a borrower do a redemption during the initial 2 years, he would incur a penalty.

The only housing loan that comes close to a fixed rate mortgage is the HDB concessionary home loan that is at 2.6%.

Yet even that is subject to CPF interest rates fluctuations.

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