The SIBOR (Singapore Interbank Offered Rate) is a reference rate based on the interest rates used by banks in Singapore when lending unsecured funds to each other. Simply put, the SIBOR reflects how much it would cost banks to borrow from each other.
Most banks in Singapore offer SIBOR-based home loan packages. It is considered the most widely used reference rate for home loan packages in Singapore and the most popular amongst consumers.
The SIBOR is administered by the Association of Banks in Singapore (ABS). Every day, Thomson Reuters helps ABS compile the rates from 17 different banks. The compiled rates are then ranked, with those on the upper and lower quartiles eliminated from the list. The remaining rates (which should come from at least eight banks) are averaged to make the day's SIBOR.