Singapore’s increasing price trend and high cost of living have made taking out a home loan one of the most important considerations for many homeowners. When looking for home loans, you will encounter terms like SIBOR, SORA, and SOR. Rayner Teh, chief operating officer of Mortgage Master, talks to us about the different benchmark rates and what they mean for current and future home loans.
HOW ARE HOME LOANS MEASURED?
In short, all the three terms above refer to a reference rate pegged to floating-rate home loans to determine the final interest cost. There are currently two types of home loans: a fixed-rate loan and a floating-rate loan.
It is surprising to learn that interest rates for fixed-rate home loans are only unchanged for two to three years before they are linked to reference rates like SIBOR (Singapore Interbank Offered Rate). With floating-rate home loans, interest rates can change periodically, which can affect your monthly payments.
There are essentially three types of benchmark interest rates, but SOR (Swap Offered Rate) has been pretty much phased out for home loans and banks have stopped offering it because of its volatility.
WHAT ARE SOR, SIBOR AND SORA?
SOR The SOR relies on the US Dollar London Interbank Offered Rate (USD LIBOR) for its computation. As mentioned in the table here, this refers to the rate in which the SGD is borrowed synthetically through borrowing USD, and then converting it back to SGD. Due to the volatility of its nature and the likely discontinuation of LIBOR after this year, SORA was recommended to replace SOR as a more suitable and stable benchmark on Aug 30, 2019.
This story is from the December 2021 edition of Home & Decor Singapore.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 2021 edition of Home & Decor Singapore.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Building Spaces, Relationships, And Trust
Adrian Heng of Space One ID talks design evolution, his experiences in the industry, and the home that sparked his love for interior design.
Glow By Supernature
A refreshing and immersive retail and dining experience for daily health and wellbeing needs.
On-Trend Options To Consider
Small as it may be when compared to the rest of the home, the bathroom deserves pride of place because it is one place you can truly be on your own. So why not make it look spectacular with these touches.
Cabinet Layout Ideas For An Open-Concept Kitchen
Breaking away from traditional enclosed cabinetry, these cabinet ideas offer a unique and refreshing approach that blends openness with functionality.
From Trash To Treasure
Designer Karyn Lim recounts her experience of creating the So Plast!c collection for the Designers & Crafters Edition 01 showcase co-curated by Industry+ and Sol Luminaire.
COOL VIBE IN MANHATTAN
Rising interior designer Matt McKay shares with KARINE MONIE how he drew inspiration from the 1960s and French design to create this apartment in Manhattan's West Village.
CITY LOFT
This bachelor pad feels like a Manhattan loft with its high ceiling, dark colour palette and a slight industrial edge.
ROOMS FOR GROWTH
Smart lighting, minimalist material palette and clever spatial tweaks come together to create a cosy home with thoughtful considerations for the future. ASIH JENIE takes a tour.
SAPPHIRE WINDOWS HEADQUARTERS AND SHOWROOM
The former factory warehouse is transformed into an elevated, grand and stunning showroom space, along with the Experiential Centre situated on Level Four.
UNWIND IN SOPHISTICATION
In the unending chaos of our fast-paced world, the bathroom assumes its rightful place as a sanctuary for serenity.
