Which Bank's Housing Loan Is Good Now?

[Phantom 1]

hi,

may i know what is interbank? never heard of such loan before? and what is "Pegged to SIBOR"?

care to explain.

SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (or interbank market). It is similar to the widely used LIBOR (London Interbank Offered Rate), and Euribor (Euro Interbank Offered Rate). Using SIBOR is more common in the Asian region and set by the Association of Banks in Singapore (ABS).

Banks normally pay customer interest rates LOWER or close to the prevailing SIBOR rate.

Banks normally charge customer customer at rates higher than the prevailing SIBOR rate or any other reference rate that is used by the bank.

Honestly, I've not had the opportunity to go through this concept but it seems to me that what they do is to take the prevailing SIBOR rate and add an additional say 1% and this is the prevailing interest you have to pay.

Somewhat similar to a floating rate plan.

If i have the opportunity to go through the techniquess/document i'll update u guys.

[l_club23 0]

SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (or interbank market). It is similar to the widely used LIBOR (London Interbank Offered Rate), and Euribor (Euro Interbank Offered Rate). Using SIBOR is more common in the Asian region and set by the Association of Banks in Singapore (ABS).

Banks normally pay customer interest rates LOWER or close to the prevailing SIBOR rate.

Banks normally charge customer customer at rates higher than the prevailing SIBOR rate or any other reference rate that is used by the bank.

Honestly, I've not had the opportunity to go through this concept but it seems to me that what they do is to take the prevailing SIBOR rate and add an additional say 1% and this is the prevailing interest you have to pay.

Somewhat similar to a floating rate plan.

If i have the opportunity to go through the techniquess/document i'll update u guys.

Simply, a loan package pegged to SIBOR is transparent. SIBOR rate is not something the bank can increase as and when they feel like as it isn't set by them, unlike their board rates which most of their floating packages are tied to. This package will usually be pegged to the 12 month SIBOR rate, some kind of average over a year I guess.

[Phantom 1]

I've managed to get a glimpse of the mortgage details from StanChart.

Its actually pegged to the 3mth SOR rate (Swap Offer Rate)

Swaps are basically "deals" structured between 2 entities (commercial). Example, 1 company has a fixed interest agreement and the other has a floating interest agreement and both parties want to exchange, hence the market exists.

Rates are also pretty similar to current SIBOR at the moment.

if i'm not wrong

0.5% + 3mth SOR

0.75% + 3mth SOR

1% + 3mth SOR

there is some terms on how the interest rate is "floating"

E.g 1st FEB 08 - They'll check what is the 3mth SOR rate and that will be the base interest. 3mths later on the 1st of the month, they'll revise again.

So technically, its not too bad.

at least if market rates are coming off, you have the chance to enjoy them.

Typical Floating packages are quite nonsense. Have you heard of any bank when interest rate come off, that the Base Lending Rate is also revised downwards?

It does not happen. lol...

But if you sign the document for the Loan, 1 mth or 2 mth later, the interest increase. is that possible?

Of course.. lol...

Edited July 21, 2007 by Phantom

[jasch 0]

If u are going for variable rates it's better to go with local banks. Because there have been many cases whereby foreign banks offered lower rates initially but after that the rates increass is scary.

If u guys going for the SIBOR package, make sure to compare what are the terms and conditions between that and normal packages. Because it's likely that the T&C is are diff. And try not to consider Stan Chart normal floating rates because it might seems lower but past trends have shown they will increase more than the local banks.

DBS package which is pegged to HDB rates is quite attractive too. Can check that out too. Or Maybank fixed rates also can as it is quite low currently.

[Phantom 1]

If u are going for variable rates it's better to go with local banks. Because there have been many cases whereby foreign banks offered lower rates initially but after that the rates increass is scary.

If u guys going for the SIBOR package, make sure to compare what are the terms and conditions between that and normal packages. Because it's likely that the T&C is are diff. And try not to consider Stan Chart normal floating rates because it might seems lower but past trends have shown they will increase more than the local banks.

DBS package which is pegged to HDB rates is quite attractive too. Can check that out too. Or Maybank fixed rates also can as it is quite low currently.

Thanks not true. One local bank raised its floating rates at least 5 times in mid 2005-2006.

Generally all banks will raise interest rates if cost of funding goes up. Using the broad stroke to paint a general picture is dangerous advice for many of the folks here.

The package under stanchart is pegged to the SOR rate or the Singapore Swap Offer Rate. Its a transparent rate that is published by MAS. Saying that Stan Chart increases its rates more is 1)damaging to its reputation 2) unfair as the the SOR rate as i mentioned is a MAS published rate. There is no way the bank can raise its rates unfairly. in fact, they can lower the interest whenever the SOR rates drop and it does fluctuate.

Whichever package a person is going for, its ultimately the person's perogative of choice.

For everyone looking to get a housing loan. please understand the techniques of how housing loans are structured before commiting and signing on the dotted line.

[prelude4 0]

wat Phantom said is true.

but wat i believe is that NO bank will ever decrease the interest rate lah. rates will always go up,seldom down.

anyway, as long as 1 bank increase for a valid reason, all banks will follow suit. the question is whether how much they increase. so i tink its still a better bet to choose a a bank with the lowest rate. but its still useful to

know wat loan u r signing for.

i initially chose Maybank because they offer quite low, but decided against it coz after hesitation, n more hesitation..i found out tat if u wanna make capital repayment, can onli repay 20% of the total loan amount.

u die die must follow thru with at least 80% of the loan. tat means if my dream comes thru n strike toto, also

LL.

den i sign with OCBC.

[kyk 0]

Rates will go up and down depending on market conditions, which includes factors such as interest rates in the US, economic conditions and property market etc. As many have already pointed out, banks need to make money. They will set interest rates to their advantage, i.e. they will set fixed loan rates only after they have done a careful study of what they anticipate the interest rate will be in 2 or 3 years' time.

The pros and cons of the 3 options are these:

Fixed rate

Pros: You know exactly what you'll be paying for the next 2 or 3 years. If you are very confident that rates will be going up in the future, then this is what you would go for. But would you really have a better picture of the where interest rates are headed than the banks?

Cons: Higher interest rates

Floating rate

Pros: Lower rates than fixed rate loans. Less susceptible to sudden fluctuations which can happen for SIBOR/SOR pegged loans.

Cons: Rates fluctuate and are determined by the banks to their advantage

SIBOR/SOR pegged loans

Pros: The rates represent the general interest rates that banks themselves are subjected to, this is the so called transparency. Shorter term loans (e.g. 3 months) almost always have lower rates than longer term loans (e.g. 2 years), so when you're pegged to a 3 months SIBOR or SOR rate you may have some leeway before you lose out to a fixed or floating loan rate. Loans are repriced every 3 months if you choose the 3 months rate pegging, so during every repricing you have a good chance of coming off happy that you got lower interest rates

Cons: Daily fluctuating rates could mean that if there is a sudden increase in interest rates you'll be caught almost immediately (the next time your repricing next takes place)

Check out these charts to have a feel of how SIBOR and SOR rates have been moving. Note that banks typically charge 0.65%- 1% on top of these rates

http://www.yenkai.net/content/sibor

http://www.yenkai.net/content/daily-sor

[Red 0]

I took Maybank loan. Was initially looking at DBS but their **** board rates as stupidly high at 4.5 plus no freebies.

Maybank is quite decent. Their variable rates starts from 1.68% for the 1st year.

[Durian pudding 0]

I took Maybank loan. Was initially looking at DBS but their **** board rates as stupidly high at 4.5 plus no freebies.

Maybank is quite decent. Their variable rates starts from 1.68% for the 1st year.

Maybank seem good too....

They even offer cash rebate too (from their webpage)...is it true?

Hv someone got any cash rebate from Maybank?

beside Red, did anyone got loan from Maybank? how do you rate them....

[Red 0]

A comment from Agent...

She adviced not to go for Foreign banks i.e. StdChart, Citi, HSBC. Some of her customer had experience before, the customer service is pretty poor and they have no mercy, if you are late with no payment, then here come lawyer letter.

How true is the above? I am not sure and cant tell coz never had any prior bank loans from them.

[winwinmortgage 0]

A comment from Agent...

She adviced not to go for Foreign banks i.e. StdChart, Citi, HSBC. Some of her customer had experience before, the customer service is pretty poor and they have no mercy, if you are late with no payment, then here come lawyer letter.

How true is the above? I am not sure and cant tell coz never had any prior bank loans from them.

Certainly not true. There is no difference in the customer service between Foreign banks and Local banks. Warning/Lawyer's letters will come from any bank if you are late on your payment.

p.s. Try to pay your installment on time if not you will have difficulties on getting your loans approve in the future, not only from your current bank but also from other banks too.

If you guys need any housing loan advice, please feel free to contact me. Visit my website @ www.winwinmortgage.sg.

Thanks.

[Babyblue 0]

A comment from Agent...

She adviced not to go for Foreign banks i.e. StdChart, Citi, HSBC. Some of her customer had experience before, the customer service is pretty poor and they have no mercy, if you are late with no payment, then here come lawyer letter.

How true is the above? I am not sure and cant tell coz never had any prior bank loans from them.

i got my loan recently from standchart. provided us with excellent service, fast & straightforward. contacted a local bank, they didn't even reply my email queries!. so, local bank is better? definately not.

i guess it's juz fair for any bank to activate a lawyer letter for late payment. which bank is able to accommodate? local banks? i doubt....

[born_again 0]

i got my loan recently from standchart. provided us with excellent service, fast & straightforward. contacted a local bank, they didn't even reply my email queries!. so, local bank is better? definately not.

i guess it's juz fair for any bank to activate a lawyer letter for late payment. which bank is able to accommodate? local banks? i doubt....

same here. We also got my bank loan from Standchart and their service is excellent. The banker updated us at every stage either via phone call or sms and we really appreciated it as we were clueless on the bank loan since its our 1st time. She also advised us on the amount of loan that we need to get as we really didnt want to be tied down with a huge amount of bank loan. In fact, we had approached other banks but they didnt even bother to get back to us and wasnt helpful even when we were down at the branch to seek their advice. Talk about local bank, the banker took down my contact number and asked me to fax the necessary to her the next day. She never once called me to check why I had yet to fax to her. I felt very turnoff when I spoke to her as she wasnt very forthcoming in answering my questions. Merely hurried me to fax the documents to her before she reveal about the procedures or the interest. That's the reason why I also cant be bothered to fax to her.

[felin03 0]

is stand chart's interest rate at 1.5% for 1st yr? what abt the second yr?

[Babyblue 0]

felin03,

below for ur ref. was provided by stanchart on apr 09 so not sure if it's the same offer still. we were offered a slightly better rate as we settled for 70% loan instead.

initial proposal package (Based on 80% loan) to us was:

1st year – 1.5% (fixed)

2nd year – 2.6% (fixed)

2nd year – 2.9% (floating)

Thereafter – 3.75 %( floating)

- Lock in 3 years

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

Standard Chartered Bank Home Loan Packages ( 80% Loan )

2 year fixed package

1st year – 2.25% (fixed)

2nd year – 2.65% (fixed)

Thereafter – 2.65 %( Floating)

- Lock in 2 years

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

3 year fixed package

1st to 3rd year –3.58% (fixed)

Thereafter – 2.65 %( Floating)

- Lock in 3 years

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

3M/12M SIBOR package (Min $250K loan)

3M/12M SIBOR + 1.75 % (Throughout)

- No Lock In Period

- No partial/full redemption penalty

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

3M/12M SIBOR package (Min $250K loan)<<1yr Lock In Period>>

1st Year - 3M/12M SIBOR + 1.50%

Thereafter - 3M/12M SIBOR + 1.75%

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

3M/12M SIBOR package (Min $250K loan)<<2yr Lock In Period>>

1st & 2nd Year - 3M/12M SIBOR + 1.35%

Thereafter - 3M/12M SIBOR + 1.75%

- 0.5% legal subsidy capped at $2,000

- Free fire insurance throughout the loan tenor

Edited June 17, 2009 by Babyblue