sibor is getting phased out!

[inlinesix]

SIBOR is interbank borrowing interest rate.

SORA is weighted average overnight borrowing interest rate.

What is the difference?

[Wind30]

1 minute ago, inlinesix said:

SIBOR is interbank borrowing interest rate.

SORA is weighted average overnight borrowing interest rate.

What is the difference?

https://abs.org.sg/docs/library/sibor-reform-and-the-future-landscape-for-sgd-interest-rate-benchmarks.pdf

There is a detailed explanation.

I don't really care which rate they use but if they can assure that we will be paying similar interest rate after switching, I am ok. 

I don't think it is ok for the bank to use this as a way to reprice the added risk post Covid into loan agreements they have signed pre-covid. 

[inlinesix]

2 minutes ago, awhtc said:

The key is not the difference, it is a collective price-fixing practice that is potentially coming up.

Under SIBOR, not possible meh?

[inlinesix]

10 minutes ago, Wind30 said:

https://abs.org.sg/docs/library/sibor-reform-and-the-future-landscape-for-sgd-interest-rate-benchmarks.pdf

There is a detailed explanation.

I don't really care which rate they use but if they can assure that we will be paying similar interest rate after switching, I am ok. 

I don't think it is ok for the bank to use this as a way to reprice the added risk post Covid into loan agreements they have signed pre-covid. 

Currently, 3mth SIBOR is 0.5%.  Can any bank assure you that it will not raise to 5% in 5 years?

My only advise is debt redemption over the transition period.

Edited July 30, 2020 by inlinesix

[Yewheng]

Can someone explain in layman term for Sora? 

The rates fluctuates everyday? 

[Yewheng]

I think these articles explain why going to switch to sora. Coz sibor, the pricing is forward looking and many cannot accurately predict what will happen in the future. So let's say price this interest rate that predict then say 1 Yr ahead will have good economy but end up different case how? So that's why sora come into the picture. Correct me if I am wrong. 

[ToyotaShuttle]

2 hours ago, Wind30 said:

🙂 is deputy managing director very big??? I thought everyone is director in financial industry...

Ignore them. They think we need to kowtow to someone just because the fella is Managing director lol.

[Yewheng]

Ya.. Coz normal layman people will not understand the difference and what it all mean..

Edited July 30, 2020 by Yewheng

[Matoonia]

Heng ah... I'm just out of my lock-in period and just refinance with DBS 5 years fixed 1.5%. Sleep well for next 5 years no need huan lo simi SIBOR, SOR, or SORA

[Wind30]

8 minutes ago, Matoonia said:

Heng ah... I'm just out of my lock-in period and just refinance with DBS 5 years fixed 1.5%. Sleep well for next 5 years no need huan lo simi SIBOR, SOR, or SORA

you do know that 1.5% is a pretty high rate compared to what older sibor pegged loans is enjoying now. 

That is my whole point. The banks are unilaterally trying to force all sibor pegged loans to reprice to a potentially higher interest package in 3 years time which is very unfair.

I don't see them clamoring to reprice housing loans when interest rates are going up 2 years ago. 

[Unfazed]

3 hours ago, Throttle2 said:

Muayhahahah, laugh until i roll on the floor. Naivety at its ultimate leh...

Cant believe some very smart people, like this one, still think that its their prerogative.

listen up, everything is to the lenders discretion ok? 

If lender wants to call on borrower to pay up today, also can. 

It’s technically very very easy to make someone with debt, a bankrupt.

 

Woken up to a new world?   Or been asleep in your own world this whole time?

 

good luck, and dont forget, huat ah!

Wah...the email machiam like boss questioning subordinate like that sia. As if banks must give low interest like that, did someone get the impression that banks "owe" lenders small interest rate? 

It is all abt supply & demand, bank need u or vice versa. Cant imagine a GEP asking such a qn. Me bo tak chek one also dun hv cheek to kpkb to MAS like that lah. Sekali, kenna slap with an answer, "low interest? Owe u one ah?!" Kiang tio ho, mai geh kiang. Why sia suay ownself, right? 😖

Edited July 30, 2020 by Unfazed

[Wind30]

.... I really hope @Throttle2 knows he is in my ignored list... 

He should really use it. I find MCF a much better place after I learnt how to use it. just a couple of buttons, I can't see what @Unfazed post too.

 

I usually don't like to add anyone into ignored list as it makes reading MCF fragmented but I searched Unfazed posts and I don't think I am missing much....

Edited July 30, 2020 by Wind30

[Matoonia]

26 minutes ago, Wind30 said:

you do know that 1.5% is a pretty high rate compared to what older sibor pegged loans is enjoying now. 

That is my whole point. The banks are unilaterally trying to force all sibor pegged loans to reprice to a potentially higher interest package in 3 years time which is very unfair. 

I don't see them clamoring to reprice housing loans when interest rates are going up 2 years ago. 

Yes I know bro... Ihave looked through a few banks on offer. some even slightly better than 1.5% but shorter lock in. But I think i rather have peace of mind for next 5 years, knowing that I'm paying 1.5% interest, while my CPF gives me 2.5%.

[Wind30]

2 hours ago, Enye said:

ang mo company culture lah

everyone by first name

even ceo or chairman of the board also like your buddy buddy 

🤣😅

mmm.... not sure if you meant this as a joke but once you mention it, all the companies I have worked people call everyone by their first name.

.... I think I have always greeted my CEO by his first name on the RARE occasions I spoke to him. Everyone does the same anyway so it will be super weird if I put a Mr XXX out...

but I almost never deal with anyone outside my company so everyone is on a first name basis  🙂 

[BanCoe]

So when SORA kicks in will our savings and FD rates be affected too?? Since it’s going to be more one on one , more active 

[Wind30]

11 minutes ago, Matoonia said:

Yes I know bro... Ihave looked through a few banks on offer. some even slightly better than 1.5% but shorter lock in. But I think i rather have peace of mind for next 5 years, knowing that I'm paying 1.5% interest, while my CPF gives me 2.5%.

yes, if interest rates stays low, it is really hard for property prices to fall when CPF pays my 2.5%. 

If I have 100k in CPF, the CPF interest is enough to offset 250k loan@1%. That is why I did not use my CPF for any housing loan payment for many many years... 

 

hopefully CPF dont go bankrupt, was going to prepay with CPF when interest rate crosses 2.5%.... which never happened. 

[Spring]

23 minutes ago, Matoonia said:

Yes I know bro... Ihave looked through a few banks on offer. some even slightly better than 1.5% but shorter lock in. But I think i rather have peace of mind for next 5 years, knowing that I'm paying 1.5% interest, while my CPF gives me 2.5%.

Fixed rate for a longer period will always be higher than shorter period so yes 5 yr Fixed of 1.5% will be higher than other banks 3 yr Fixed of 1.4% or maybe even slightly lower. Like what u mentioned you are willing to have peace of mind and the price to pay is around 0.1%, so to each his own, no right no wrong.

Although not comparable, I opted for Fixed rate Electricity with Keppel but oil prices have dropped so I'm now paying more, hard luck! Choosing Fixed can go either way. I do see why u opt to do this as there is a 1% arbitrage between the loan rate and CPF rate which was unheard of years ago but now quite common.

 

[Spring]

52 minutes ago, Wind30 said:

you do know that 1.5% is a pretty high rate compared to what older sibor pegged loans is enjoying now. 

That is my whole point. The banks are unilaterally trying to force all sibor pegged loans to reprice to a potentially higher interest package in 3 years time which is very unfair.

I don't see them clamoring to reprice housing loans when interest rates are going up 2 years ago. 

U can't compare Fixed with Sibor Floating as the former will always be higher when offered at the same point of time. Quite obvious that banks take a risk giving Fixed and so the difference is their spread for taking this risk.