Comments on: 2 Risks of Sibor-Pegged Home Loan

By: low

low — Tue, 23 Mar 2010 15:25:24 +0000

cos the central bankers think it’s better to err on keeping the rates low than to raise them too early. raising them too early will derail the recovery but raising them too late will lead to high inflation. the central bankers are willing to risk on the inflation side than on spoiling the recovery.

By: lala

lala — Tue, 23 Mar 2010 13:04:12 +0000

and why is the reason for remaining low?

By: low

low — Sat, 20 Mar 2010 14:30:51 +0000

sibor will remain low, just as libor and fed rates will too. then over 3 to 5 years, rates will be gradually adjusted upwards coinciding with a gradually blooming world economy which will peak in 2017 surpassing the previous peak.

the future is so easy to predict…

By: lala

lala — Sat, 20 Mar 2010 13:28:07 +0000

just wondering. any advice on what might be the forecast of SIBOR in the next 6 months?

and also what affect SIBOR Rates?

By: rk

rk — Wed, 17 Mar 2010 03:08:25 +0000

1 month spread will always be lesser than 3 month spread at a given point in time (lesser risk/volatility given lower timeframe).

However if interest rates rise sharply, then your base rate jumps in month 2 and month 3 for the 1 month spread while it remains the same in those months for the 3 month spread. If interest rates are going down, then the base rate will go down in months 2 and 3.

So in general, the 1 month SIBOR is more volatile and hard to say which is better without more analysis.

By: bluetone

bluetone — Tue, 02 Mar 2010 14:19:05 +0000

I may be asking different question related to the sibor + xx. I am shopping for a new loan and there few options to go with 1M sibor + XX and 3M sibor +xx.

Historically 1M is lower or equal to 3M sibor, so would it be more beneficial to go with 1M sibor + xx? what is the downside? thanks.

By: Curious

Curious — Mon, 01 Feb 2010 03:16:45 +0000

not lawyer, the agreement does not need to have the word “fixed”. If it states that it is 4%, then it is fixed at 4% unless somewhere else in the agreement it states that it can vary.

Agree totally with anonymous, really cannot understand why there is any confusion on this topic.

By: not lawyer

not lawyer — Thu, 28 Jan 2010 03:21:47 +0000

the problem is that the agreement does not say whether the spread is fixed or not. does yours say so?

By: anonymous

anonymous — Wed, 27 Jan 2010 13:49:05 +0000

don’t understand why there’s even any confusion on this topic.

for those of you who have existing mortgages, READ your mortgage agreement. if it says that the spread is fixed (e.g. you will be charged SIBOR+1.5% from Yr 4 onwards, etc), then contractually the banks CANNOT tweak that spread as long as you continue to service the loan in accordance with the terms of the agreement (i.e. no defaults, etc).

The articles in AsiaOne and Mocca refer to *NEW* loans, for which banks can raise the spread for *new* customers to compensate for a falling SIBOR, so that they still maintain their margins. If you have an existing loan, it does not affect you.

By: Andy

Andy — Wed, 27 Jan 2010 12:03:34 +0000

Here is another article:

http://community.mocca.com/articles/singapore-home-loan-and-refinance-update?tribes=7290