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SIBOR vs SOR Rates
SIBOR & SOR Rates are no longer offered by banks
If you're thinking of refinancing your SOR home loan, or getting a floating rate home loan, here are some other alternatives:
Enjoy instalments as low as S$/month, when you borrow/ refinance with the best home loan rates in Singapore.
SORA Rate Packages
These are interest rates that fluctuate based on forward-looking future transactions.
Interest Rate Year 1
from
Best SORA Rate Package
S$/mo
Monthly Instalments Year 1Interest Rate Year 1
Lock-in Period
Rates and fees as of September 29, 03:35 AM, and based on the assumption that you are purchasing/ refinancing a private property.
Board Rate Packages
These are interest rates that change based on the bank’s internal decisions.
Interest Rate Year 1
from
Best Board Rate Package
S$/mo
Monthly Instalments Year 1Interest Rate Year 1
Lock-in Period
Rates and fees as of September 29, 03:35 AM, and based on the assumption that you are purchasing/ refinancing a private property.
Fixed Deposit Rate Packages
These are interest rates that fluctuate based on the bank's fixed deposit rates.
Interest Rate Year 1
from
Best Fixed Deposit Rate Package
S$/mo
Monthly Instalments Year 1Interest Rate Year 1
Lock-in Period
Rates and fees as of September 29, 03:35 AM, and based on the assumption that you are purchasing/ refinancing a private property.
These home loan recommendations are based on the information entered above. When choosing a home loan package, you should also consider other factors such as market conditions, risk appetite and other financial plans/obligations. If you need help in choosing the most suitable home loan package, you can always speak with one of our mortgage specialists for advice and market insights.
Still in the midst of choosing the best home loan package?
Our mortgage specialists can help you save time and money with their comprehensive knowledge on mortgage. Just book a call or send a WhatsApp message to make your home loan journey easier.
Still in the midst of choosing the best home loan package?
Our mortgage specialists can help you save time and money with their comprehensive knowledge on mortgage. Just book a call or send a WhatsApp message to make your home loan journey easier.
What is the difference between SIBOR and SOR?
Understanding the difference between SIBOR and SOR is relatively easy. Basically, SIBOR is the average rate at which Singapore banks loan from one another. SOR, on the other hand, is another interbank lending rate that’s based on the cost of swapping USD and SGD. What this means is that SOR can vary drastically, depending on how the US economy is doing.
Most consumers who take up SOR packages are consumers with higher risk profiles, and wish to take advantage of the SOR’s ability to drop (albeit unpredictable) to levels way below the SIBOR while also being able to confidently ride through the period when it’s above the SIBOR.
Frequently Asked Questions
- What are Fixed Rate Housing Loans?With many different home loan options out there, fixed rate simply refers to an interest rate that will be locked in for a certain period of time. Based on data, fixed rate home loans tend to be higher than floating rate home loans.
- What are Floating Rate Housing Loans?
Sometimes referred to as variable or adjustable rate, floating rate housing loans change depending on how often you want your interest rate to be refreshed, as well as your risk appetite. Here are the different types of floating rates that you can compare.
First is the SIBOR. This type of rate changes everyday, and you can choose to have your interest rate refreshed on a monthly or quarterly basis.
The next type is board rate. Since the benchmark used for this rate is internally determined by banks, it’s less transparent than SIBOR and usually changes on a quarterly basis.
Fixed deposit home rates (FDHR) is the other floating-type home loan that’s linked to a bank’s fixed deposit account interest rate. So, if their interest rates go up, so do the home loan interest rates. You can say that it’s similar to board rate, but it’s published and therefore seen as slightly more transparent than board rate.
Lastly, SOR, another type of floating rate which will eventually transition to SORA in the coming years, is based on the foreign exchange rate with the US dollar.
- What affects the movement of SIBOR rates?Several factors affect SIBOR – the demand for funds, supply of funds, regulations and other aspects surrounding the financial system. Thus, you need to be prepared to face any kind of scenario. To get tailored insights on where SIBOR stands at the time you’re reading this, just reach out to one of our mortgage specialists for free advice.
- What will SOR be replaced with?Due to several global financial market factors, SOR will be discontinued and changed to the Singapore Overnight Rate Average (SORA).
- What is the difference between SOR and SORA?Unlike SOR, SORA isn’t directly affected by the US economy. Even when there’s the inevitable FX spillover, SORA doesn’t need FX forwards as inputs. This means that there’s less likelihood for SORA to become negative. Another key difference is that SORA isn’t association with LIBOR – a global benchmark rate for several financial sectors that’s bound to end in 2021. Do note that details regarding this new benchmark rate are still being developed.
- Why did MAS decide to move the from SOR to SORA as a benchmark rate?The main reason for this change is the impending end of LIBOR in 2021, which will have a significant impact on SOR since the Singapore rate benchmark uses USD LIBOR in its computation. Due to these changes, a decision has been made to shift from SOR to SORA – a rate that’s independent of LIBOR. While the transition hasn’t been completed yet as it will take a couple of years, a steering committee is already overseeing the industry-wide transition in Singapore.
- How does SORA work?If you’re thinking what this “new” SORA is all about, well, it’s already been around since 2005. The calculation is based on the weighted average rate of all overnight cash transactions in SGD that take place in the interbank market for a particular day.
- Will I be affected by the change from SOR to SORA?Given that this transition from SOR to SORA is still a work in progress, it’s best to check with your bank how this shift will affect your current home loan package, or how they will move things forward while things are still uncertain. In general, banks could convert your SOR-pegged home loan package to a SORA-pegged rate by making contract amendments. Another possibility would be an overall conversion overlay of the SOR spread. At this point, nothing is certain yet, so it’s best to confirm with your bank.
- What should I do if I have a SOR rate currently?If you have a SOR-pegged home loan interest rate, you should ask you bank how the market-wide changes will affect your package in the coming years. Even when there are no certain next steps yet, it will give you enough time to prepare and understand any changes that might affect your home loan strategy. You can also speak with one of our mortgage specialists at any point in your journey, to plot your home loan strategy or refinancing options.