Housing Loan Singapore

www.Housingloansingapore.com

Providing online home loan services since 2009

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.

Definition

Payment Rate

The payment rate refers to the actual interest rate which is used to calculate an actual mortgage payment.

There has to be a distinction made with payment rate as the interest rate of a home loan is often mentioned as index rate plus spread which equals to fully indexed rate.

This is then expressed as something like SIBOR + 1%.

As one can tell, this does not provide any real clarity of what is the actual housing loan interest rate that is being charged. SIBOR could very well be 1% or 2% or something else.

On top of this, the SIBOR today might not be the same when the latest mortgage payment amount is calculated and deducted from a borrower’s loan repayment account.

Because all home loans in Singapore are adjustable rate mortgages, or would eventually become one, the payment rate can change from month to month, and even be different from borrower to borrower due to different refresh intervals signed up by different borrowers.

The only time when payment can be certain is when a borrower is within a period of fixed rate during the tenure of a fixed rate loan.

It must be said that Singapore mortgages are mostly fully amortizing.

The interest rate and the payment rate are usually similar. But this is not a rule that absolutely applies.

When the payment rate is higher than the interest rate, a borrower can expect the loan to be fully repaid earlier than expected. And if payment rate is lower than interest rate, the borrower might not fully pay off the loan even when the supposed maturity date of the mortgage arrives.

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
SEE RATES

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.

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
SEE RATES
close-link

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

Find the best mortgage rates here
VIEW TODAY'S RATES
close-link