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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.


Board Rate

The board rate is quite possibly the longest surviving type of interest rate structure for home loans today.

It’s hardly surprising as they have as these are interest rate benchmarks that the banks can pretty much determine as and how they like it.

This is because little is known about how these internal board rates are set.

Even in a bank, probably more than 90% of employees would not have the answers to the question either.

As times have changed, the lack of transparency of board rates have led to them being avoided by more and more borrowers.

In fact, most people who sign up for them these days probably do so because they don’t have any alternatives to choose from as that particular lender is the only one willing to approve their loan requests!

While board rate housing loans can sometimes throw up pretty attractive deals, the biggest drawback is that the bank has to right to adjust them upwards or downwards whenever they want, for whatever reason they want.

This means that market forces don’t play a role in the setting of them, except when the bank feels threatened by competing lenders offering competitive rates.

But that can mean nothing when a bank is targeting a different consumer market.

For example, some lenders might focus on borrowers with adverse credit. These profiles of borrowers would have been shunned by all other banks, leaving them with a lender who would only offer the borrower a board rate loan.

Because of the bad reputation board rates have garnered in the past, marketers can disguise board rates with other aliases hoping that borrowers would not notice.

Some common alternative names include:

  • Prime rate
  • Mortgage rate
  • Variable rate
  • etc

But don’t be fooled. They are all the same.

As long as a home loan does not have a fixed rate or an index pegged rate, and the lender reserves the right to change the rate as and when they please as long as they send a notification in advance, it is a board rate mortgage.

Some board rates have stayed at the same level for years. Especially when we consider that the world economy has yet to fully recover from the setbacks of 2008.

While other board rates actually state in loan contracts that they would be reviewed every few months. Meaning an interest rate hike is always on the horizon with no place to hide.

When is board rate a good choice?

As mentioned earlier, most people who accept board rate housing loans these days don’t have a choice.

Because if they do, then it almost certain that with some homework, they would be able to find a better and more attractive loan elsewhere… and even more transparent interest rates.

But there are times when board rate loan have very low interest rates during the initial few years of the loan.

While they are certain to rise after a few years, property buyers who fully intend to sell the house in the short term can take advantage of the low teaser rates and diverse the property before higher interest rates kick in.

The same with home buyers who fully intend to refinance the loan as soon as the lock-in period expires.

However in this case, take note that refinancing is never something that is certain. There is every chance that one would not be able to refinance the debt in future.

This could be due to changes in the lending environment like TDSR policies.

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It makes absolutely no sense to pay more
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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.

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

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

It makes absolutely no sense to pay more
than you have to on a home loan.

Find the best mortgage rates here

It makes absolutely no sense to pay more than you have to on a home loan.

Find the best mortgage rates here