Jump to content

sibor is getting phased out!


Wind30
 Share

Recommended Posts

11 minutes ago, Weez911 said:

If you are whining about interest rates on your mortgage, you are probably buying something you can't afford. Sorry, hard truth.

Where got whine? It is always a circular argument.

You will never lose money in property. Interest rate will drop more than rental and price will go up. Confirm can rent out one.

And project delays will mean tight supply and higher rental rate. 

Covid is a non event. Just buy buy buy. 😄

I am so glad i don't have to lose sleep over SORA.

 

 

↡ Advertisement
  • Praise 1
  • Haha! 2
Link to post
Share on other sites

16 minutes ago, Lon3fly3r said:

Bank wins. 
Refer to the loans factsheet if you still have it. 

Your FI may choose to revise the type of reference rate or spread or both only under the following circumstances:

if the reference rate in this contract is no longer available

So once Sibor is phase out, they can change to any other reference rates. Whether or not the all in rate would be same as your current rate, nobody knows

Got so generous terms ? "only under this circumstances".

Based on my recall of my previous home loan documents, they always reserve the right to amend most things in the contract [laugh]

  • Praise 1
Link to post
Share on other sites

40 minutes ago, Lala81 said:

Bit puzzled by this. 

After the lock-in period for 2 years, the bank can unilaterally change any agreement (and that is if they make a commitment to keep to the spread).
Whether it's the spread. Whether it's SIBOR or whatever, it can be changed. 

Do people think that lock-in means guaranteed interest rate for perpetuity? The average less educated average joe who only deals with HDB loans, sure...
 

That is why i recommend fixed rate if possible.  Just pay up a bit and lock in.  If you are not over geared, it doesn't really matter.  

But I am super conservative when it comes to Investment. 

  • Praise 2
Link to post
Share on other sites

35 minutes ago, inlinesix said:

A lot of ppl moves out of HDB loan as it is cheaper outside.

my bank loan is more expensive than HDB. I was paying 3% last year before i redeemed the loan. 
But i was bit stupid back then and had to essentially source for my 1st ever home loan within 1 evening due to certain circumstances (cos i was not allowed to take up HDB loan) -_-

I would have gladly taken HDB if i had the option back in 2011. OK lah, low quantum, just treat it as learning point.

Edited by Lala81
  • Praise 1
Link to post
Share on other sites

2 minutes ago, Voodooman said:

That is why i recommend fixed rate if possible.  Just pay up a bit and lock in.  If you are not over geared, it doesn't really matter.  

But I am super conservative when it comes to Investment. 

After 2 years lock in, does Fixed vs Floating really matter?
They can always amend the spread right for fixed, just that it's more lehcheh for the banks?
And that they would take a longer while and assess the profitability of their home loans book before deciding to do so. 

Link to post
Share on other sites

3 minutes ago, Lala81 said:

Got so generous terms ? "only under this circumstances".

Based on my recall of my previous home loan documents, they always reserve the right to amend most things in the contract [laugh]

Yes many so called property investors don't even read the fine print. Some banks are explicit and have a right of review clause. Others just tuck it somewhere.  

With deposit rate almost near zero and banks no longer pricing new mortgage loans at Sibor plus 0.5% (likely to lose money after admin and capital cost), those with such loans should be happy and hope banks are gracious enough to share some pain during Covid. 

 

Link to post
Share on other sites

3 minutes ago, Lala81 said:

After 2 years lock in, does Fixed vs Floating really matter?
They can always amend the spread right for fixed, just that it's more lehcheh for the banks?
And that they would take a longer while and assess the profitability of their home loans book before deciding to do so. 

Fixed is more difficult to amend. Max is 3 years but at least you have a real contract that is locked in.  You are paying for something.

Edited by Voodooman
Link to post
Share on other sites

Yup some of my colleagues and friends still under lock-down when they recontracted last year higher than 2.6% when I told them to be patient and that Sibor loans are a much better deal. So few people believed me then...

I also told them anything higher than our HDB-based loans is not sustainable in current economic climate.

But I did not expect it to tank to near 0% though.

Edited by Showster
Link to post
Share on other sites

Turbocharged
55 minutes ago, Lala81 said:

Bit puzzled by this. 

After the lock-in period for 2 years, the bank can unilaterally change any agreement (and that is if they make a commitment to keep to the spread).
Whether it's the spread. Whether it's SIBOR or whatever, it can be changed. 

Do people think that lock-in means guaranteed interest rate for perpetuity? The average less educated average joe who only deals with HDB loans, sure...
 

I already repeated multiple times, I know the bank can unilaterally change the interest rate... I think they can do it even during the lock in according to my loan document.

Let me ask you a question, do you know of a bank that has unilaterally change the spread of a hosing loan after the lock in period recently in Singapore??? 

If not, why not? Once you figure out the reason, then you might understand why Banks want an easy way out by removing Sibor.

Link to post
Share on other sites

Turbocharged
(edited)
29 minutes ago, Lala81 said:

After 2 years lock in, does Fixed vs Floating really matter?
They can always amend the spread right for fixed, just that it's more lehcheh for the banks?
And that they would take a longer while and assess the profitability of their home loans book before deciding to do so. 

I have been taking housing loans for 20 years, I have never seen a Bank amend the spread for my loans. Even when I was paying less than 1% interest for over 3-4 years post 2009. 

If you work out the numbers, interest rate is quite a lot of money, for normal folks like me who don't pay full cash. 

As I said, MCFers is kind of skewed... they don't care how much interest they are paying for housing loans... maybe they don't take much loans.

I feel myself pretty lucky with regards to housing loans... I do remember in around 2004, the interest rate spiked pretty high but that loan was not big so I paid it off pretty early. My second purchase was 2009 and I basically ride the years of sub 1% interest rate to pay it off. Now my third purchase which was done in late 2018 I was pretty worried interest rate was going up to 3% or higher. Sibor was 2% when I bought. Now it is like 0.4%...

I am hoping to use this Sibor dip for the next 4-5 years to pay off this loan quickly. I hate paying of interest to banks.

Edited by Wind30
  • Praise 1
Link to post
Share on other sites

Hypersonic
36 minutes ago, Voodooman said:

Where got whine? It is always a circular argument.

You will never lose money in property. Interest rate will drop more than rental and price will go up. Confirm can rent out one.

And project delays will mean tight supply and higher rental rate. 

Covid is a non event. Just buy buy buy. 😄

I am so glad i don't have to lose sleep over SORA.

 

 

boss... difficult to lose zzz in a fully paid gcb in your case lah 👍😆

31 minutes ago, Lala81 said:

my bank loan is more expensive than HDB. I was paying 3% last year before i redeemed the loan. 
But i was bit stupid back then and had to essentially source for my 1st ever home loan within 1 evening due to certain circumstances (cos i was not allowed to take up HDB loan) -_-

I would have gladly taken HDB if i had the option back in 2011. OK lah, low quantum, just treat it as learning point.

doc... income is too high

peasant like me... hdb say better to  take hdb loan for entire tenure

😅

Link to post
Share on other sites

8 minutes ago, Wind30 said:

I already repeated multiple times, I know the bank can unilaterally change the interest rate... I think they can do it even during the lock in according to my loan document.

Let me ask you a question, do you know of a bank that has unilaterally change the spread of a hosing loan after the lock in period recently in Singapore??? 

If not, why not? Once you figure out the reason, then you might understand why Banks want an easy way out by removing Sibor.

The local banks may not do it easily. But Citi certainly did it in 2015. 

Your definition of recent covers 2015?

 

 

  • Praise 1
Link to post
Share on other sites

2 minutes ago, Enye said:

boss... difficult to lose zzz in a fully paid gcb in your case lah 👍😆

doc... income is too high

peasant like me... hdb say better to  take hdb loan for entire tenure

😅

50 dollars over 8000 dollars income limit back then. Don't allow me to take HDB loan. I want to peasant also cannot?

Don't get me going on MBT and his incompetence.

Edited by Lala81
  • Shocked 1
Link to post
Share on other sites

3 minutes ago, Wind30 said:

I already repeated multiple times, I know the bank can unilaterally change the interest rate... I think they can do it even during the lock in according to my loan document.

Let me ask you a question, do you know of a bank that has unilaterally change the spread of a hosing loan after the lock in period recently in Singapore??? 

If not, why not? Once you figure out the reason, then you might understand why Banks want an easy way out by removing Sibor.

Cimb tried.

Banks need to pay staff salary and shareholders, it is the amount of pain they can stomach. But i don't see them doing anything now that will be seen by G as unsympathetic.

You don't look like you are overstretched on property and your industry is doing well, why are you so worried?  By 2023, even without Sora, your bank will reprice your sibor loan if sibor stays at current level. It is just not sustainable. Anyway, in 3 years time, the interest rate environment might be very different. 

  • Praise 1
Link to post
Share on other sites

6 minutes ago, Lala81 said:

The local banks may not do it easily. But Citi certainly did it in 2015. 

Your definition of recent covers 2015?

 

 

Standard chartered too. I remember.

Link to post
Share on other sites

8 minutes ago, Enye said:

boss... difficult to lose zzz in a fully paid gcb in your case lah 👍😆

doc... income is too high

peasant like me... hdb say better to  take hdb loan for entire tenure

😅

Sifu, if I have a fully paid GCB, don't need to come here to learn from you. 

Think I might have to downgrade to smaller HDB soon.  

Link to post
Share on other sites

Mine did, was on floating rate tagged to FD. Spread lowered down in Jun. 
 

very rare, banks seldom will touch the spread. 

↡ Advertisement
  • Praise 1
Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...