sibor is getting phased out!

[ToyotaShuttle]

On 8/1/2020 at 11:03 AM, Voodooman said:

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. 

But isn't Sibor effectively the cost of funds to the bank? If they are charging a spread above that, how is it not sustainable?

[Voodooman]

2 hours ago, ToyotaShuttle said:

But isn't Sibor effectively the cost of funds to the bank? If they are charging a spread above that, how is it not sustainable?

I have some deposits with UOB and it is not 0.2%.

Maybe so for DBS but what is DBS offering now?  The mortgage market is super competitive, so we have to assume DBS quoting 1.5% all in for both new fixed and floating is what is needed to make some money (yet not lose market share) and cover cost. 

https://www.dbs.com.sg/personal/loans/homeloans/manage-mortgage

[Wind30]

I just got a tenant... at a price $300 higher than my previous contract. The first person to view the place after renovation offered it. 

I did dump $40k into renovations though. My maths is that the current condition is pretty horrible and if I rent it out, I have to rent at least 1k/month if not 1.5k cheaper. If $1k, I break even after 3 years, if 1.5k I break even after 2 years.

So after three 3 years, I will either end up with a place renovated 3 years ago or a 10+years old place original condition. 

I did not take into account the 5 months of zero rental we had because of the lockdown, renovation work. That is actually quite a bit of money. 

Luckily the interest rate now is like 0.6%. 

[Showster]

5 hours ago, Wind30 said:

I just got a tenant... at a price $300 higher than my previous contract. The first person to view the place after renovation offered it. 

I did dump $40k into renovations though. My maths is that the current condition is pretty horrible and if I rent it out, I have to rent at least 1k/month if not 1.5k cheaper. If $1k, I break even after 3 years, if 1.5k I break even after 2 years.

So after three 3 years, I will either end up with a place renovated 3 years ago or a 10+years old place original condition. 

I did not take into account the 5 months of zero rental we had because of the lockdown, renovation work. That is actually quite a bit of money. 

Luckily the interest rate now is like 0.6%. 

In terms of finance, that is one challenge with central, resale properties.

 

[ToyotaShuttle]

On 8/3/2020 at 2:01 PM, Voodooman said:

I have some deposits with UOB and it is not 0.2%.

Maybe so for DBS but what is DBS offering now?  The mortgage market is super competitive, so we have to assume DBS quoting 1.5% all in for both new fixed and floating is what is needed to make some money (yet not lose market share) and cover cost. 

https://www.dbs.com.sg/personal/loans/homeloans/manage-mortgage

I think your deposits with UOB are just one aspect of their total cost of funds. SIBOR is part of it just like those people who don't bother with their cash sitting in a normal bank account getting less than 0.1% when FD was giving 2%.

Quote

What is SIBOR?

SIBOR stands for Singapore Interbank Offered Rates. An individual ABS SIBOR contributor bank contributes the rate at which it could borrow funds, were it to do so by asking for and accepting inter-bank offers in a reasonable market size, just prior to 1100 hrs.

https://www.abs.org.sg/consumer-banking/consumers/rates-charges

Ultimately, housing loans are also not the only the the banks do with their deposits. I reckon in Singapore's context where the max loan amount is tightly controlled and where everyone has to put a min 20% down, the default and non-recoverable rate has been relatively low and will remain low during a crisis.

[sti2020]

On 8/2/2020 at 3:36 PM, Lightbringer said:

Looks like you're the same old insecure, childish prick who constantly seeks validation by making every issue about yourself or finding an opportunity to hint about how wealthy you are and untouched by the worries of the "common folks".

We get it. You've got money, lots of it. You've done a good job reminding everybody about it conspicuously year after year. I'm just surprised you're still going at it after so long - looks like the self-validation you are seeking isn't so readily coming eh?

However, the way you constantly couch value in terms of money, and brag about how "aiya, pay a few thousands more only, no big deal" it is to you, simply reveals your own insecurities, inability to empathise, and a general ugliness in your character.

Just to help you out here - the discussion here is about consumer rights, ethics and policy execution. It was never about affordability, stress from potentially higher payments or overextending, or all that self-projection you've been throwing around. It is about how policy execution has a wide-ranging impact on many consumers. It is about understanding that everybody have different circumstances and some are less lucky or fortunate as others, and they deserve protection from unfair business practices instead of suffering from the contempt of more fortunate people like yourself.

But all these just flew over your head because you just saw another opportunity to rub people noses into how all these are "silly worries" which only affects people who are not as wealthy or cash rich as you, right? And sneering and being contemptful to those who you deem to be less worthy because they have less resources than you and have made some suboptimal decisions and hence could be more negatively affected by certain changes, make you feel better about your lot in life doesn't it?

Do me a favour, don't even bother engaging me with your trolling because I really have no interest in how rich you are.... I don't know you, you don't know me, yet you seem to desperate to remind people whom you dont know and neither know you, about your wealth. I hope you find the peace you seek and the self-validation you crave one day. Meanwhile, you should spend your time chattering about Rolexs, Cigars and other wealth-signalling topics with your like-minded kakis, and leave the discussion of real-world issues to those who are genuinely interested in the topic at hand, alright? 

Run along now.

best article in a long, long time

 

 

[Voodooman]

5 hours ago, ToyotaShuttle said:

I think your deposits with UOB are just one aspect of their total cost of funds. SIBOR is part of it just like those people who don't bother with their cash sitting in a normal bank account getting less than 0.1% when FD was giving 2%.

Ultimately, housing loans are also not the only the the banks do with their deposits. I reckon in Singapore's context where the max loan amount is tightly controlled and where everyone has to put a min 20% down, the default and non-recoverable rate has been relatively low and will remain low during a crisis.

Wow... An expert that I can learn from. 

Perhaps you can enlighten me. if sibor is cost of fund, why are banks like Maybank, CIMB, BOC and SCB offering such higher FD and saving account rates if they can just borrow Interbank at 0.2%?  

I observed that the sub 1% spread was introduced when sibor was higher than 1% last year but that has pretty much disappeared after sibor fell to current level. So all in of less than 1% may not be profitable for even DBS. Just a guess. Perhaps you can share more.