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A MoneySmart Mortgage Specialist will be contacting you to help you secure the best home loan in town.
A MoneySmart Mortgage Specialist will be contacting you to help you secure the best home loan in town.
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What's next after SOR?
For many years, the Swap Offer Rate (SOR) has been one of the key benchmark rates used by banks in Singapore. Determined based on the exchange rate between the Singapore dollar and the US dollar, SOR is greatly dependent on the USD LIBOR. So, what will happen to SOR now given that LIBOR will cease to exist after 2021? Well, the Monetary Authority of Singapore (MAS) has already started preparing for this transition. This is the very reason why SOR will be phased out – due to the LIBOR transition that will happen in the coming years.
Given the impending discontinuation of LIBOR, the Association of Banks in Singapore (ABS) has announced that SOR will transition to an alternative benchmark rate called the Singapore Overnight Average Rate (SORA) within the next two years.
SOR-pegged home loan rates may change to SORA. To find out how this will affect your current home loan or upcoming refinancing, feel free to speak with one of our mortgage specialists.
SIBOR Rate Packages
These are interest rates that fluctuate based on interbank interest rates.
Interest Rate Year 1
from
Board Rate Packages
These are interest rates that change based on the bank’s internal decisions.
Interest Rate Year 1
from
Fixed Deposit Rate Packages
These are interest rates that fluctuate based on the bank's fixed deposit rates.
Interest Rate Year 1
from
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.
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.
The SOR is derived using the following formula:
USD/SGD Forward Rate = USD/SGD Spot Rate +/- SWAP Pts.
1-mth SOR | 0.185% |
3-mth SOR | 0.242% |
6-mth SOR | 0.277% |
* The SOR rate for the month is based on the rate as of the first business day of the month.
While there are still some financial sectors that still use SOR as their reference rate, in a few years’ time, SORA will take the place of SOR as one of the key benchmark rates in Singapore. MAS has also suggested that existing financial contracts that still use SOR should switch to SORA.
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.