Housing Loan Singapore


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.


Legal Clawback

A legal clawback is a contractual clause in the mortgage agreement that stipulates legal subsidies granted by the lender has to be paid back under certain conditions.

This clause comes with a clawback period in which the clause if active, after which it expires.

When a bank has give a home buyer cash rebates or legal subsidies to offset the considerable costs of legal fees, the least it can expect from the borrower is to commit to the home loan for a short period of time.

What sense does it make for the lender to offer such freebies should a borrower refinances the loan with another bank a year after taking it in the first place.

The legal clawback is a counter-measure implemented by banks to deter borrowers from taking advantage of them.

In a way, it is also an effective tool to prevent customers from refinancing even though the lock-in period has passed.

Because if a borrower has found a better housing loan with lower interest rates, the thought of having to return the money for legal fees can be a turn-off big enough to defer refinancing.

For example, if a borrower’s current mortgage contract has 6 more months before the clawback clause expires, why not wait for 6 more months before refinancing?

While this line of thought is pragmatic, the question that should also be asked is whether loans with attractive enough rates would be available in 6 months.

Want to see housing loan interest rate trends
for the last 36 months?

Enter your email below so we can send it to you.

Related Posts

What We Do For You

We Gather And Provide You Information On The Best Housing Loans In Singapore So That You Can Make A Better Decision Based On What Is Available In The Market

Which bank do you recommend for home loans in Singapore?

We don't recommend banks. We recommend you the best home loan that suits your profile and financial position.

SIBOR 14 Jun 2018

1 Month 1.40009
3 Month 1.52038
6 Month 1.66171
12 Month 1.85096

SOR 14 Jun 2018

1 Month 1.39053
3 Month 1.56581
6 Month 1.67225

How Does SOR Rates Hit Negative Value?

SOR rates are calculated with a complex financial formula, solved with simple algebra. The results of solving the equation therefore depends on the inputs used. Varying inputs that result from economic impacts and indicators can lead to negative value when the formula is solved. Key input indicators include USD/SGD spot rates and USD/SGD forward rates.

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.

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.