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.

Partial Redemption

Partial redemption refers to the lump sum payment towards the principal balance on a home loan without fully paying it off.

Partial redemptions occur frequently when homeowner have sizable sums of cash on hand, and instead of using them for investments, they choose to redeem part of the mortgage to save on interest rates.

This is especially common in times of rising interest rates.

When the loan principal outstanding is reduced, the bank could recast the loan to recalculate a new monthly installment payment.

Some housing loan contracts penalize borrowers for full redemptions with early redemption fees, but have no penalty fees for partial redemption.

So homeowners do not fully redeem a loan even though they have the funds to do so. Choosing to redeem the loan up to it’s minimum required principal balance.

This helps them save both on interest charges and the penalty fees which they might incur.

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