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.

Rate Protection

Rate Protection is a mechanism that protects a borrower from interest rate hikes between the time a borrower applies for a mortgage and the time the facility is approved and accepted.

When we talk about rate protection, it is only about protection from interest rate increases.

In the event of a rate decrease, a borrower would drop the application rates and take new loan rate instead.

Sometimes lock mechanisms can freeze interest rates on a potential loan until it closes.

But in practice, lenders will usually honour the interest rates available during the time a borrower applies for a home loan even if rate have risen before closing.

However do note that any lock on a specific interest rate will eventually expire.

Regarding lock mechanisms, they come with an expiry date.

Should a lender honour a lower interest rate quoted during the time an application was made, the offer will usually only last for the duration that the facility letter is active.

Should the offer from the lender not be taken up by the borrower within the active period, then it is unlikely that a lender will offer the loan at the lower rate again to the borrower.

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