Definition
Refresh Interval
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The refresh interval is the time period between the adjustment to home loan interest rates.
As there are no 30-year fixed rate mortgages in Singapore, housing loans usually consist of an index rate plus a spread. Which sums up to become the fully indexed rate.
And because indices are volatile and changes almost every day, the index rate changes every time a new interest rate is calculated.
The refresh interval, or refresh rate, indicates the time period between each time the mortgage rate “refreshes” to the new rate charged to a home loan.
A refresh adjustment interval can be as short as daily to as long as one year.
SIBOR for example, is one of the most common index rate used in home loans. It has variations like:
- 1 month SIBOR
- 3 month SIBOR
- 12 month SIBOR
- etc
Depending on the type of SIBOR a borrower has taken up and the terms of the loan contract, the refresh interval varies.
For example, someone on a 1 year SIBOR might have his housing loan interest rate adjusted to it’s most current level on an annual basis.
Saying that, it’s not impossible for a borrower to be on 1-month SIBOR but have the refresh interval set at 12-monhtly.
It all depends on the terms of the facility letter which a borrower should possess a copy of.
Take note that a payment adjustment interval refers to the period between changes to payment on a floating rate loan.
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