sibor is getting phased out!

[inlinesix]

8 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...

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

[Lon3fly3r]

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

[Weez911]

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

[Chongster]

1 minute 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.

Bro this is not true lah, I whine about my Kopi price go up 10 ct also .  

I get where @wind30 is coming from- it’s basically heads we win tail you lose for the   Banks.  My way to deal with it is to own bank stocks 😜

 

[Weez911]

5 minutes ago, Chongster said:

Bro this is not true lah, I whine about my Kopi price go up 10 ct also .  

I get where @wind30 is coming from- it’s basically heads we win tail you lose for the   Banks.  My way to deal with it is to own bank stocks 😜

 

I have never seen you creating thread on the 10c increase in kopi.

Edited August 1, 2020 by Weez911

[Voodooman]

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.

 

 

[Lala81]

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 

[Voodooman]

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. 

[Lala81]

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 August 1, 2020 by Lala81

[Lala81]

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. 

[Voodooman]

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 

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. 

 

[Voodooman]

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 August 1, 2020 by Voodooman

[Showster]

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 August 1, 2020 by Showster

[Wind30]

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.

[Wind30]

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 August 1, 2020 by Wind30

[Lala81]

https://www.asiaone.com/business/news/borrowers-upset-over-hike-margin-sibor-loans

https://forums.hardwarezone.com.sg/credit-cards-line-credit-facilities-243/citibank-changing-spread-home-loans-unilaterally-maximise-profits-5011706.html

 

[Enye]

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

😅

[Lala81]

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?