Which loan offer is better?

[vade]

Hi,

Need some quick advice. Just bought a private property and been shopping around for a home loan package. I have been offered the following:

1. 1M SIBOR + 0.75% throughout (legal subsidy up to $3000)
2. 3M SIBOR + 0.65% for 1st 2 years, then 3M SIBOR + 0.7% thereafter (legal subsidy up to $2500)

Assuming all other terms being equal, which one is better? Thanks in advance :)

[vade]

Forgot to add that both offers are no lock-in.

[DC33_2008]

If yours is a BUC package, it does not matter much in the first 2.5 years. It's the 3rd year onwards which will make a difference if the loan amount is almost fully disbursed then. Is this an investment property? If so, have you considered SOR?

[vade]

This is for a completed property for own stay.

[DC33_2008]

The decision is quite clear between the two. 2nd package is better as it is 0.7% from 3rd year onwards unless you like slight volatility.
This is for a completed property for own stay.

[vade]

Can share how the slight volatility will be a problem? The only downside I see is that the loan amount will vary monthly, but that's not really a big problem right?

Comparing the two, even though 1st package loading is 0.75% versus 2nd package loading of 0.7%, but 1M SIBOR is usually around 0.1% lower than 3M SIBOR right? So effectively the 1st package will have lower interest rates isn't it?

Please correct me if I'm missing anything. Thanks again :)

[hopeful]

whats the minimum effective rate for both package?

[vade]

good qns. it's not stated in the letter of offer, so does that mean there isn't any? i guess better call the bank to confirm.

[DC33_2008]

Some people do not like fluctuation. SOR is even better if you like volatility.
Can share how the slight volatility will be a problem? The only downside I see is that the loan amount will vary monthly, but that's not really a big problem right?

Comparing the two, even though 1st package loading is 0.75% versus 2nd package loading of 0.7%, but 1M SIBOR is usually around 0.1% lower than 3M SIBOR right? So effectively the 1st package will have lower interest rates isn't it?

Please correct me if I'm missing anything. Thanks again :)

[qus]

May i ask which banks are the offers from? Am looking for a refi as well.

To me, both are quite comparable and if would base decision on which bank and reputation, esp with history of any top up calls when valuation falls. Assuming both are based on same valuation?

[vade]

yes, both are based on same valuation. package 1 is from hsbc and package 2 is from dbs. to me, both banks are more or less the same.

[Petmail]

May i ask which banks are the offers from? Am looking for a refi as well.

To me, both are quite comparable and if would base decision on which bank and reputation, esp with history of any top up calls when valuation falls. Assuming both are based on same valuation?


Generall, SOR pegged package only come from UOB. The rest of the banks recurrently working on Sibor including OCBC. However, DBS also do offers SOR thought at is not their preferred package to offer to most buyers. ANZ also does offers an median SOR+Sibor package.

Cheers!

[Petmail]

Hi,

Need some quick advice. Just bought a private property and been shopping around for a home loan package. I have been offered the following:

1. 1M SIBOR + 0.75% throughout (legal subsidy up to $3000)
2. 3M SIBOR + 0.65% for 1st 2 years, then 3M SIBOR + 0.7% thereafter (legal subsidy up to $2500)

Assuming all other terms being equal, which one is better? Thanks in advance :)


Depending if you are buying resale unit or BUC (Building Under Construction) cos some projects do have special packages bundled with the purchase.

If you do need help to clarify.. Feel free to pm me.

[irisng]

yes, both are based on same valuation. package 1 is from hsbc and package 2 is from dbs. to me, both banks are more or less the same.

Wow, that means the interest rate has actually dropped instead of rising. I got a package from DBS around 3 months ago (3M Sibor + 0.75% throughout). No lock in period and the legal fee is fully subsidized if loan more than $400K.

I understand from one of the bankers that if Sibor rate goes up, Sor rate will go up even faster. It is okay for short-term like 1-2 yrs but not advisable for long-term as it is pegged to overseas market. No sure whether true or not.:beats-me-man:

[DC33_2008]

Anz does not offer 0.75 + SOR anymore?
Generall, SOR pegged package only come from UOB. The rest of the banks recurrently working on Sibor including OCBC. However, DBS also do offers SOR thought at is not their preferred package to offer to most buyers. ANZ also does offers an median SOR+Sibor package.

Cheers!