View Full Version : Need advice on choosing SOR or Sibor package
This is my first time taking mortgage. Please share your view on which package I should to select. Thanks! :)
Property: Freehold, uncompleted, TOP 2015, purchased for own stay
80% loan.
I've read that Sibor is more stable than SOR. I believe there's always a price to pay for stability, i.e. higher rates. SOR has been lower than Sibor for the past year. The US has indicated that they will keep interest rates low at least for the next 12 months. Singapore dollar looks to remain strong and has appreciated against USD. I expect SOR to remain low. MAS has announced an increase in bank reserve ratio so I expect Sibor rates to go up. But ultimately they are both linked, with Sibor adjusting to be higher than SOR when we look at periods of time (say, 5 years or 10 years) though SOR may be higher than Sibor at a fixed point in time (i.e. on a particular date). Assuming the Sibor rate of 0.4375% and SOR 0.202%, in year 1, I will pay the same interest amount on package A and B, I will pay less interest amount on package A in the 2nd and 3rd year. Package A gives full legal subsidy.
I have the ability to pay half my loan amount in cash at the moment. But the current interest rates are very low so I would rather keep the cash in investments (gold and SG blue chip stocks) which yields alot more than the current 1% mortgage interest.
Should interest rates become significantly higher like 4-5%, I might pay down the loan. I have the intention of refinancing after 3 or 4 years if I can get better rates at that time.
I can accept instability for possible gains/savings. I don't mind doing extra work/homework for a proportionate amount of savings. I am inclined to choose package A below. Bank A approved my loan 1 day after application but I have not signed offer letter.
A) 3M SOR No Lock Package:
Year 1 to 4: 3M SOR + 0.75%
Thereafter: 3M SOR + 1%
The SOR rate today is: 0.202%
- No Partial Prepayment Penalty
- No Redemption Penalty
- Cancellation Fee : 0.75% on undrawn amount
- Legal subsidy : Full legal subsidy (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
B) 3M Sibor No Lock Package
Yr 1: 3 mths sibor + 0.55%
Yr 2: 3 mths sibor + 0.60%
Yr 3: 3 mths sibor + 0.65%
Yr 4: 3 mths sibor + 1.25%
Thereafter: 3 mths sibor + 1.25%
The Sibor rate today is = 0.4375%
- Partial Prepayment penalty: Partial Repayment Up to 50% no prepaymt penalty, the balance will be 1.5% of Prepaid Amt
- Full redemption penalty: 1.5% of Outstanding Loan amount
- Cancellation fee: 1.5% on loan amount
- Legal subsidy: 0.5% (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
Package A. No brainer to me. Ur pty TOP only 2015, all the low rates in the 1 st 4 yrs irrelevant. U should look at flexibility instead. No partial and full redemption penalty and 0.75 cancellation fee is much better than the other one.
Package fm which bank?
This is my first time taking mortgage. Please share your view on which package I should to select. Thanks! :)
Property: Freehold, uncompleted, TOP 2015, purchased for own stay
80% loan.
I've read that Sibor is more stable than SOR. I believe there's always a price to pay for stability, i.e. higher rates. SOR has been lower than Sibor for the past year. The US has indicated that they will keep interest rates low at least for the next 12 months. Singapore dollar looks to remain strong and has appreciated against USD. I expect SOR to remain low. MAS has announced an increase in bank reserve ratio so I expect Sibor rates to go up. But ultimately they are both linked, with Sibor adjusting to be higher than SOR when we look at periods of time (say, 5 years or 10 years) though SOR may be higher than Sibor at a fixed point in time (i.e. on a particular date). Assuming the Sibor rate of 0.4375% and SOR 0.202%, in year 1, I will pay the same interest amount on package A and B, I will pay less interest amount on package A in the 2nd and 3rd year. Package A gives full legal subsidy.
I have the ability to pay half my loan amount in cash at the moment. But the current interest rates are very low so I would rather keep the cash in investments (gold and SG blue chip stocks) which yields alot more than the current 1% mortgage interest.
Should interest rates become significantly higher like 4-5%, I might pay down the loan. I have the intention of refinancing after 3 or 4 years if I can get better rates at that time.
I can accept instability for possible gains/savings. I don't mind doing extra work/homework for a proportionate amount of savings. I am inclined to choose package A below. Bank A approved my loan 1 day after application but I have not signed offer letter.
A) 3M SOR No Lock Package:
Year 1 to 4: 3M SOR + 0.75%
Thereafter: 3M SOR + 1%
The SOR rate today is: 0.202%
- No Partial Prepayment Penalty
- No Redemption Penalty
- Cancellation Fee : 0.75% on undrawn amount
- Legal subsidy : Full legal subsidy (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
B) 3M Sibor No Lock Package
Yr 1: 3 mths sibor + 0.55%
Yr 2: 3 mths sibor + 0.60%
Yr 3: 3 mths sibor + 0.65%
Yr 4: 3 mths sibor + 1.25%
Thereafter: 3 mths sibor + 1.25%
The Sibor rate today is = 0.4375%
- Partial Prepayment penalty: Partial Repayment Up to 50% no prepaymt penalty, the balance will be 1.5% of Prepaid Amt
- Full redemption penalty: 1.5% of Outstanding Loan amount
- Cancellation fee: 1.5% on loan amount
- Legal subsidy: 0.5% (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
flagship74
03-07-11, 10:48
This is my first time taking mortgage. Please share your view on which package I should to select. Thanks! :)
Property: Freehold, uncompleted, TOP 2015, purchased for own stay
80% loan.
I've read that Sibor is more stable than SOR. I believe there's always a price to pay for stability, i.e. higher rates. SOR has been lower than Sibor for the past year. The US has indicated that they will keep interest rates low at least for the next 12 months. Singapore dollar looks to remain strong and has appreciated against USD. I expect SOR to remain low. MAS has announced an increase in bank reserve ratio so I expect Sibor rates to go up. But ultimately they are both linked, with Sibor adjusting to be higher than SOR when we look at periods of time (say, 5 years or 10 years) though SOR may be higher than Sibor at a fixed point in time (i.e. on a particular date). Assuming the Sibor rate of 0.4375% and SOR 0.202%, in year 1, I will pay the same interest amount on package A and B, I will pay less interest amount on package A in the 2nd and 3rd year. Package A gives full legal subsidy.
I have the ability to pay half my loan amount in cash at the moment. But the current interest rates are very low so I would rather keep the cash in investments (gold and SG blue chip stocks) which yields alot more than the current 1% mortgage interest.
Should interest rates become significantly higher like 4-5%, I might pay down the loan. I have the intention of refinancing after 3 or 4 years if I can get better rates at that time.
I can accept instability for possible gains/savings. I don't mind doing extra work/homework for a proportionate amount of savings. I am inclined to choose package A below. Bank A approved my loan 1 day after application but I have not signed offer letter.
A) 3M SOR No Lock Package:
Year 1 to 4: 3M SOR + 0.75%
Thereafter: 3M SOR + 1%
The SOR rate today is: 0.202%
- No Partial Prepayment Penalty
- No Redemption Penalty
- Cancellation Fee : 0.75% on undrawn amount
- Legal subsidy : Full legal subsidy (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
B) 3M Sibor No Lock Package
Yr 1: 3 mths sibor + 0.55%
Yr 2: 3 mths sibor + 0.60%
Yr 3: 3 mths sibor + 0.65%
Yr 4: 3 mths sibor + 1.25%
Thereafter: 3 mths sibor + 1.25%
The Sibor rate today is = 0.4375%
- Partial Prepayment penalty: Partial Repayment Up to 50% no prepaymt penalty, the balance will be 1.5% of Prepaid Amt
- Full redemption penalty: 1.5% of Outstanding Loan amount
- Cancellation fee: 1.5% on loan amount
- Legal subsidy: 0.5% (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
Pkg A is nice.:D
You may want to check with ANZ if they still have 0.75%+3month SOR throughout with no lock-in.
Package A. No brainer to me. Ur pty TOP only 2015, all the low rates in the 1 st 4 yrs irrelevant. U should look at flexibility instead. No partial and full redemption penalty and 0.75 cancellation fee is much better than the other one.
Pkg A is nice.:D
Thanks for your advice. :) I was wondering whether I missed out something important.
What's the quantum <500K
You may want to check with ANZ if they still have 0.75%+3month SOR throughout with no lock-in.
Foreign banks like ANZ don't want to finance my "shoebox" :(
Package fm which bank?
You also looking to finance?
the SOR will rise faster when USD appreciates against SGD...
also foreign banks tend to raise loan rates faster when interest rates rise, as compared to local banks...
rattydrama
03-07-11, 21:04
package A is nice. Heard citi offering 1m or 3m SIBOR +075% throughout with 2 yr lock in.
If you like to use SOR, Citi also has a package for 3mSOR+0.75% throughout entire term, not sure but probably with 2 years lock in. The spread may be reduced depending on your loan quantum.
This is my first time taking mortgage. Please share your view on which package I should to select. Thanks! :)
Property: Freehold, uncompleted, TOP 2015, purchased for own stay
80% loan.
A) 3M SOR No Lock Package:
Year 1 to 4: 3M SOR + 0.75%
Thereafter: 3M SOR + 1%
The SOR rate today is: 0.202%
- No Partial Prepayment Penalty
- No Redemption Penalty
- Cancellation Fee : 0.75% on undrawn amount
- Legal subsidy : Full legal subsidy (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
B) 3M Sibor No Lock Package
Yr 1: 3 mths sibor + 0.55%
Yr 2: 3 mths sibor + 0.60%
Yr 3: 3 mths sibor + 0.65%
Yr 4: 3 mths sibor + 1.25%
Thereafter: 3 mths sibor + 1.25%
The Sibor rate today is = 0.4375%
- Partial Prepayment penalty: Partial Repayment Up to 50% no prepaymt penalty, the balance will be 1.5% of Prepaid Amt
- Full redemption penalty: 1.5% of Outstanding Loan amount
- Cancellation fee: 1.5% on loan amount
- Legal subsidy: 0.5% (to be refunded if loan is redeemed within 3 years from 1st loan disbursement date)
Hi evergreen,
Can you share with me which bank offers the above packages? Thanks.
the SOR will rise faster when USD appreciates against SGD...
also foreign banks tend to raise loan rates faster when interest rates rise, as compared to local banks... Agree.
Here's my opinion, open for discussion:
Sibor appears to "lag" SOR, i.e. rise slower than SOR and also fall slower than SOR. But Sibor will catch up eventually. Since we are looking at spans of time rather than a price/rate at a particular point in time, I believe the need for stability concerns borrowers who have tight cash flow.
Sibor has been higher than SOR by about 0.2% for the past 1 year. Effectively, the banks are collecting 0.2% more beforehand. If the rates go up, they have the ability to absorb some of the increase, otherwise the extra money goes into their profit.
Loan rates offered by local banks are usually higher than foreign banks so they have the ability to absorb slight increased in interest rates.
package A is nice. Heard citi offering 1m or 3m SIBOR +075% throughout with 2 yr lock in.
If you like to use SOR, Citi also has a package for 3mSOR+0.75% throughout entire term, not sure but probably with 2 years lock in. The spread may be reduced depending on your loan quantum.
Citibank, like ANZ, doesn't finance "shoebox".:o
devilplate
04-07-11, 10:59
Citibank, like ANZ, doesn't finance "shoebox".:o
serious? really? even for those who bot from developers? how small is ur shoebox? 366sqft?
citibank cfm ok wif 4xxsqft units....
btw, banks earns on the loading....they dun earn on sibor/sor rates
the tiny wee bit difference on the loading doesnt really matter....its the lock-in, redemption clauses etc tats impt....and for me, service level aso vy impt!
Loan rates offered by local banks are usually higher than foreign banks so they have the ability to absorb slight increased in interest rates.
don't understand what you mean here.
are you talking about spread? like 3M SIBOR + xx?
if based on SIBOR, SOR, it is fixed at a particular date for mortgages.
if your fixing date falls on 1 july 2011, then local and foreign will determine your mortgage rate to be the rate that particular day + spread.
I dont understand your statement about absorption of interest rates by local banks.
devilplate
04-07-11, 11:04
don't understand what you mean here.
are you talking about spread? like 3M SIBOR + xx?
if based on SIBOR, SOR, it is fixed at a particular date for mortgages.
if your fixing date falls on 1 july 2011, then local and foreign will determine your mortgage rate to be the rate that particular day + spread.
I dont understand your statement about absorption of interest rates by local banks.
i am sure he is toking abt the spread or i usually call it 'loading'
and yes, dun understand 'banks abosrb slight increase'....hahaha
tot only for fixed rates....sibor/sor rates up, they LL 'absorb' during the fixed tenure
serious? really? even for those who bot from developers? how small is ur shoebox? 366sqft?
citibank cfm ok wif 4xxsqft units....
btw, banks earns on the loading....they dun earn on sibor/sor rates
the tiny wee bit difference on the loading doesnt really matter....its the lock-in, redemption clauses etc tats impt....
Citibank said they don't finance <500 sq ft units.
Since sibor is the SG inter-bank lending rate, doesn't somebody earn something from it?
I don't mind lock-in package because I won't be cancelling the loan in the next 3 years but it appears that the lock-in packages aren't any better than the no-lock-in ones.
Yes, I agree service is important. One of the banks threw me their standard spreadsheet and told me to go calculate everything myself.
To answer your question, maybe I have to ask dnomyarw what he meant:
also foreign banks tend to raise loan rates faster when interest rates rise, as compared to local banks...
How about
3M SIBOR / 3M SOR + 0.75%
free switch of 3M SIBOR or SOR every year
Free fire insurance for 2 years
1 Time Free conversion upon TOP for BUC
PM me for details.
devilplate
04-07-11, 11:23
Citibank said they don't finance <500 sq ft units.
Since sibor is the SG inter-bank lending rate, doesn't somebody earn something from it?
I don't mind lock-in package because I won't be cancelling the loan in the next 3 years but it appears that the lock-in packages aren't any better than the no-lock-in ones.
Yes, I agree service is important. One of the banks threw me their standard spreadsheet and told me to go calculate everything myself.
To answer your question, maybe I have to ask dnomyarw what he meant:
nvr know citibank dun finance <500sqft!! since when?!?! or subject to individual citi bankers?!?! shocking to noe tat....hehe
i tink he meant those olden days floating board rates.....sibor/sor rates very transparent oredi
devilplate
04-07-11, 11:25
How about
3M SIBOR / 3M SOR + 0.75%
free switch of 3M SIBOR or SOR every year
Free fire insurance for 2 years
1 Time Free conversion upon TOP for BUC
PM me for details.
cancellation fees on undrawn amt(if u wana sell b4/upon TOP), redemption fees(in case u wana refinance to other banks) more impt....
How about
3M SIBOR / 3M SOR + 0.75%
free switch of 3M SIBOR or SOR every year
Free fire insurance for 2 years
1 Time Free conversion upon TOP for BUC
PM me for details.
cancellation fees on undrawn amt(if u wana sell b4/upon TOP), redemption fees(in case u wana refinance to other banks) more impt....
Can you share what are the charges and fees are? As devilplate mentioned, those fees are a major consideration.
For 3M sibor packages, banks are offering for 1st 3 years: 0.55%, 0.6%, 0.65%. I think people who prefer "stability" of sibor should just go for sibor package instead of get distracted by the option to switch.
I wonder whether I'll get to use up 1 year insurance but of course I won't reject 2 years free ;)
nvr know citibank dun finance <500sqft!! since when?!?! or subject to individual citi bankers?!?! shocking to noe tat....hehe
i tink he meant those olden days floating board rates.....sibor/sor rates very transparent oredi
Maybe since KBW cautioned buyers about shoeboxes...
cancellation fees on undrawn amt(if u wana sell b4/upon TOP), redemption fees(in case u wana refinance to other banks) more impt....
1.5% of outstanding amount if facility is fully repaid within 2 years lock-in period.
1.5% on amount cancelled or left undrawn after acceptance or upon expiry of the availability period
devilplate
04-07-11, 12:00
1.5% of outstanding amount if facility is fully repaid within 2 years lock-in period.
1.5% on amount cancelled or left undrawn after acceptance or upon expiry of the availability period
quite high...tot usually 1% rite....
tat package A still da best la...0.75% cancellation fees
nvr know citibank dun finance <500sqft!! since when?!?! or subject to individual citi bankers?!?! shocking to noe tat....hehe
i tink he meant those olden days floating board rates.....sibor/sor rates very transparent oredi
yes i meant those packages with board rates...
quite high...tot usually 1% rite....
tat package A still da best la...0.75% cancellation fees
Most charge 0.75% of undrawn amount.
It can be 1.5% of loan amount.
Have to read carefully...:2cents:
I don't have any reason not to choose package A.
Package A bank service is also the best.
CondoSearch
05-07-11, 13:00
Evergreen,
i have gone thru this about a month ago for my new property purchase and have to say, it is really a huge and so much information to digest and decide.
I finally engaged a person whom provide mortgage assistance and realised they can be a very good helping hand and feed you with a best information of package avialable in town and help in making decision, you may want to give a try. Sometime you might be surprised by what other option might be out there for you to consider...
just a penny of thought to share over the 2 packages you provided(if this is the best option avialable for you). A package would be a better choice because:
1. lower spread after 4th year and for new BUC property loan, most of disbursement at TOP and after.
2. No patial and redemption fee
I would suggest you to go around and do more shopping perhaps might be more choice for you to decide... HSBC can be a good one to try too if you have yet to check with them, another one is DBS or CIMB...
Good luck!
Hi CondoSearch,
Thanks for sharing!
I asked for rates from all the banks (I'm kiasu :o ), compared the rates and learnt the terms myself by reading blogs and forums like these.
You were lucky to meet a mortgage broker who knows his stuff. I tried contacting one but he appeared to be just a middleman who passes on my documents to the banks, and after that I have to liaise with the banks myself.
hsbc has a loan package at 0.65% + 3 mth sibor two months ago with no lock-in and has legal subsidy.
Evergreen,
i have gone thru this about a month ago for my new property purchase and have to say, it is really a huge and so much information to digest and decide.
I finally engaged a person whom provide mortgage assistance and realised they can be a very good helping hand and feed you with a best information of package avialable in town and help in making decision, you may want to give a try. Sometime you might be surprised by what other option might be out there for you to consider...
just a penny of thought to share over the 2 packages you provided(if this is the best option avialable for you). A package would be a better choice because:
1. lower spread after 4th year and for new BUC property loan, most of disbursement at TOP and after.
2. No patial and redemption fee
I would suggest you to go around and do more shopping perhaps might be more choice for you to decide... HSBC can be a good one to try too if you have yet to check with them, another one is DBS or CIMB...
Good luck!
some banks have raised their spread slightly.
This Bank of China package which give u flexibility of switching between SOR and SIBOR, look quite attractive:
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
1st year: 3M SIBOR/SOR +0.55%
2nd year thereafter: 3M SIBOR/SOR+0.75%
Free fire insurance, legal subsidy,etc
2years lock in...
Very aggressive...., worth a look
rattydrama
09-07-11, 10:53
can anyone share what is the best rate now with no lock in?
This Bank of China package which give u flexibility of switching between SOR and SIBOR, look quite attractive:
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
1st year: 3M SIBOR/SOR +0.55%
2nd year thereafter: 3M SIBOR/SOR+0.75%
Free fire insurance, legal subsidy,etc
2years lock in...
Very aggressive...., worth a look
Thanks for the info!
If we only consider the rates, it's competitive. The rate you stated is for loans >$0.5M.
For <$0.5M, the rate is 3M sibor/sor + 0.75% which is the same as Package A. But package A has no lock in so I'd rather go for Package A.
I don't know whether the CIMB rates applicable for uncompleted property.
The article also doesn't state the cancellation and pre-payment charge.
can anyone share what is the best rate now with no lock in? For floating rate, uncompleted property, <$0.5M loan, given the SOR and Sibor rates as of today, it would be Package A.
Lock-in for SOR and SIBOR is too risky.
Lock-in for SOR and SIBOR is too risky.
Why ? What's wrong with benchmark rates ?
Hi CondoSearch,
Thanks for sharing!
I asked for rates from all the banks (I'm kiasu :o ), compared the rates and learnt the terms myself by reading blogs and forums like these.
You were lucky to meet a mortgage broker who knows his stuff. I tried contacting one but he appeared to be just a middleman who passes on my documents to the banks, and after that I have to liaise with the banks myself.
yup nowadys so many of these refinancing agents middleman around just pass ur documents to the bank...:(
One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.
yup nowadys so many of these refinancing agents middleman around just pass ur documents to the bank...:(
CondoSearch
11-07-11, 22:12
Hi CondoSearch,
Thanks for sharing!
I asked for rates from all the banks (I'm kiasu :o ), compared the rates and learnt the terms myself by reading blogs and forums like these.
You were lucky to meet a mortgage broker who knows his stuff. I tried contacting one but he appeared to be just a middleman who passes on my documents to the banks, and after that I have to liaise with the banks myself.
yes, i did the same initially but not from all bank though nonetheless still fell overwhelmed by the information furthermore I'm not very savy come to T&C. and almost left out some good deal if not because talking to the guy i mentioned. luckily he is not a postman :)..he very responsive till i felt paiseh cos i have a time constraint for my option exercise, so keep shooting email to him till 1am+ and he just responded to my messages even late at night and patiently explain to me the information, i really slut him and really got a good deal thru him...
hmh! sorry guys, you may have thought i promoting this middleman but just want to share with you alll as he really did a good job for me...
Anyway, I believe you decided with the package by now, seems your package A still the best so far unless the Bank of China offer the package for <0.5mil ...
btw, different person or banker somehow might result in a bit different of the offer package even from the same bank from what i have learnt...if have time search as much as info you can...good luck!
CondoSearch
11-07-11, 22:16
One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.
haha! hope you are not agent and you might be right but my agent somehow good in what she is doing, come to bank loan my agent mearly a postman...:doh:
thats bcos agents are different..thats their rice bowl. i am a mortgage broker, so i know what is gd service. and thats the difference i make. otherwise i might as well become a prop agent. refer, shake leg, get comm.
This Bank of China package which give u flexibility of switching between SOR and SIBOR, look quite attractive:
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
1st year: 3M SIBOR/SOR +0.55%
2nd year thereafter: 3M SIBOR/SOR+0.75%
Free fire insurance, legal subsidy,etc
2years lock in...
Very aggressive...., worth a look
i got better spread for my client with >1m loan.
i got better spread for my client with >1m loan.
yes, probably 2nd year and after 0.65%
One can get better deal if work with the real estate agent on loan package as banker will give the agent a cut on commission if you go through them rather than to the banker directly.
I don't understand the logic. :confused: If the banker needs to give the agent a cut, why would the bank give you a better rate.
yes, i did the same initially but not from all bank though nonetheless still fell overwhelmed by the information furthermore I'm not very savy come to T&C. and almost left out some good deal if not because talking to the guy i mentioned. luckily he is not a postman :)..he very responsive till i felt paiseh cos i have a time constraint for my option exercise, so keep shooting email to him till 1am+ and he just responded to my messages even late at night and patiently explain to me the information, i really slut him and really got a good deal thru him...
hmh! sorry guys, you may have thought i promoting this middleman but just want to share with you alll as he really did a good job for me...
Anyway, I believe you decided with the package by now, seems your package A still the best so far unless the Bank of China offer the package for <0.5mil ...
btw, different person or banker somehow might result in a bit different of the offer package even from the same bank from what i have learnt...if have time search as much as info you can...good luck!
I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.
Agent co-share the commission with the owner as owner brought a deal to the agent. Did not read the earlier mails. Which bank is offering Package A?
I don't understand the logic. :confused: If the banker needs to give the agent a cut, why would the bank give you a better rate.
I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.
That's a one-off "rebate" privately arranged between agent and borrower, not a better (interest) rate offered by bank. Not the same.
Just need to put in money to be a private banking customer and you can get better deal.
That's a one-off "rebate" privately arranged between agent and borrower, not a better (interest) rate offered by bank. Not the same.
CondoSearch
19-07-11, 02:46
I don't understand the logic. :confused: If the banker needs to give the agent a cut, why would the bank give you a better rate.
I was underwhelmed by the lack of T&C's! Especially cancellation charges and prepayment penalties, clawbacks, closing fees, etc.
I confirmed on Package A. I couldn't find anything better.
I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....
Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...
During times like this when interest rates will probably remain low for another 12 months (maybe only), buyers can risk getting 1 yr lock in with low interest rates. But during more uncertain times and volatile moments, always go for the no lock-in and actively keep a look out for cheaper deals once interest rates fluctuates... more trouble lah but can potentially save that little bit more to spend on self or family! :D
There may be opportunity for refinancing even during BUC property mortgage. T&C must be read carefully.
I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....
Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...
I hope you get all the T&Cs information before signing your bankloan... anyway, I personally think for BUC all charges likely to be irrelevant as it likely taking 3-4 years to complete unless you got lot of cash in hand to paid off before TOP....
I asked the banker to give me the entire document a few days before meeting the lawyer. All the charges and conditions are important to me. E.g. the bank states that I have to buy insurance from a particular insurer otherwise I need to pay the bank admin fee for insuring with another insurer.
I only need to loan half the amount but I loaned as much as I can because I prefer to keep my cash for investment.
Termination clauses are extremely important - they should be understood/negotiated upfront because when you want to terminate the agreement, you have no bargaining power.
Anyway, since already confirmed then shall move on...keep track of your dream home or invetment home progress and wait for next challenge come to renovation...your one would probably top almost the same time with mine...can share info again for the reno... haha...
What renovation are you going to do for a brand new condo unit :confused:
I'm going to fix up the lights, put up the blinds/curtains only. Of course you could do all those fancy and completely unnecessary carpentry stuff but I think money is better spent elsewhere - things that you can take along with you when you move such as nice moveable furniture, quality fabric for curtain and bed, large wall mirror with a nice frame, framed art pieces or posters, vases, unique lights, top quality bathroom accessories.
What renovation are you going to do for a brand new condo unit :confused:
I'm going to fix up the lights, put up the blinds/curtains only. Of course you could do all those fancy and completely unnecessary carpentry stuff but I think money is better spent elsewhere - things that you can take along with you when you move such as nice moveable furniture, quality fabric for curtain and bed, large wall mirror with a nice frame, framed art pieces or posters, vases, unique lights, top quality bathroom accessories.There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes? :scared-3:
iwantgizmos
21-07-11, 15:28
There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes? :scared-3:
Don't worry bout it. Perhaps the cost of the property has offset the cost of the wardrobe. Getting the unit @ low price is better than paying high price for a crappy wardrobe.:D
There are some developers who do not build the wardrobe for the condo units they sell so still need to engage contractor to build them! Or is it just my developer who do not build wardrobes? :scared-3:
Mine has wardrobe included.
Don't worry bout it. Perhaps the cost of the property has offset the cost of the wardrobe. Getting the unit @ low price is better than paying high price for a crappy wardrobe.:D
Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.
But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.
Mine has wardrobe included.
Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.
But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.
Aiyah... nobody used solid wood for cupboards anymore... maybe just for front if you're willing to pay, but the carcass is almost never solid these days, even for very very high end products.:)
Most provide it but the quality can be poor. Even those Far East Org high end developments cut corners on the materials used: laminate boards instead of solid wood, normal glass instead of tempered glass, etc.
But you don't need a contractor to do it. Go direct so that you get lower prices and your carpentry built to the correct specifications. Contractors always miscommunicate and try to make you accept the mistakes or pay for rectification.One must be selective in what he/she asks the contractor to do. For uniformity and theme, contractors are redundant. One can always walk into a good furniture shop and mix and match. However, there are really some carpentry which will only look much better with contractor's touch. Eg. a cupboard that flushes to the ceiling, weird designs or demanding requirements that are not readily available off the racks, etc. So it really depends on individual's taste, time and demand for perfection, as well as the available budget. :spliff:
Aiyah... nobody used solid wood for cupboards anymore... maybe just for front if you're willing to pay, but the carcass is almost never solid these days, even for very very high end products.:)
I was referring to quality. Even if people are willing to accept poor quality, it doesn't change the definition of what's good and what's poor.
Just like electronics nowadays. Poor quality but cheap :)
Sometimes it's a matter of safety too. Using normal glass that shatters upon breakage is very dangerous. Certain things, we shouldn't compromise on quality.
One must be selective in what he/she asks the contractor to do. For uniformity and theme, contractors are redundant. One can always walk into a good furniture shop and mix and match. However, there are really some carpentry which will only look much better with contractor's touch. Eg. a cupboard that flushes to the ceiling, weird designs or demanding requirements that are not readily available off the racks, etc. So it really depends on individual's taste, time and demand for perfection, as well as the available budget. :spliff:
By contractor, I meant renovation contractor - the type who gets the job, subcontracts to other people to do, is supposed to do the coordination and takes a cut.
If you go direct to the people who specialise in carpentry, there's a higher chance that they will understand what you want.
I've helped with 2 hdb flats complete overhaul. Contractors will always mess up something. The only variable is how bad it is and how long it will take to get it rectified.
Shopping for a mortgage loan in Singapore
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Tan Kin Lian, On Sunday 31 July 2011, 18:03 SGT
Many home buyers look for a mortgage loan with the lowest interest rate. They should look at the other details of the mortgage packages and choose a package that is most suitable for their needs.
Different types of mortgages
Here are three common packages:
• Floating rate package
• Fixed rate package
• SIBOR /SOR package
More details can be found at:
http://www.mortgagesense.com.sg/home-loan-packages (http://www.mortgagesense.com.sg/home-loan-packages)
Floating rate package
The interest can be adjusted at the bank's discretion. It is usually calculated on the board Mortgage Rate less a fixed discount (which can vary for each of the first three years). The board rate may be changed at the bank's discretion, which will change the interest rate payable by the borrower.
For example, if the board rate is 4.5% and the fixed discount in the first year is 3.82%, the borrower pays a discount interest rate of 0.68%. If the board rate is increased by 0.5%, the discounted rate will also increase by 0.5%
Fixed rate package
The Interest rate for the first few years is upfront fixed by the bank. The borrower is not affect by interest rate adjustment. The interest rate is usually higher compared to the floating rate package.
For example, the interest rate for the first three years can be fixed at 1.18%, 1.68% and 1.98% respectively and thereafter 3.75% for another three years with a 3 year lock-in period.
SIBOR / SOR package
The interest rate is calculated on the base rate plus a fixed spread. The base rate is available for 1, 3, 6, 9 or 12 months. At the end of each period, the interest rate is recalculated according to the market rate.
For example, the borrower may pay the 3 month SOR rate plus a fixed spread of 0.75%. If the SOR rate is 0.5%, the borrower pays 1.25% for 3 months. This rate will be revised every 3 months. There is no lock-in period under this arrangement.
Lock in period
The borrower should take note of the lock in period. If the loan is terminated earlier, e.g. due to sale of the property, the borrower has to pay a penalty, which is usually 1.5% of the outstanding home loan.
Clawback period
Many banks provide a subsidy to cover the legal fee, valuation fee and fire insurance, which could be as much as $4,000. If the loan is terminated within the claw back period of 3 years, the borrower usually has to repay the subsidy in full (i.e. not pro-rated) to the bank. The actual terms may vary from one bank to another.
Borrow what you need
You should borrow only the amount of loan that you need. If you borrow less, you will pay less in interest.
Keep some money for rainy days
You should have liquid savings at least 12 months of your installments. This may be needed to meet the mortgage payments, in case you lose your job.
Websites
Here are some websites for you to find the mortgage packages that are available. You may find it easier to go through to these aggregator websites, rather than try to call or visit the banks individually. You can engage the service of the website owner to advise you and help you to apply for the loan.
www.smartloans.sg (http://www.smartloans.sg)
This is a self-service website. The home seeker keys in the details and see the details of available home loan packages.
www.housingloansg.com (http://www.housingloansg.com)
The owner of the website is a pioneer of mortgage broking. He has given many seminars and talks.
www. (http://www.)mortgagesense.com.sg (http://us.lrd.yahoo.com/SIG=11gr7dsvv/EXP=1314091628/**http%3A//mortgagesense.com.sg/)
This website aims to provide a personal touch. It engages the clients and understand their needs before recommending any package. It educates the consumers and compares the packages for them. For every successful closure, it promises to makes a donation to charity.
Sibor Package 1 (No Lock)
INTERST RATES
Year 1
3M SIBOR + 0.625%
Year 2
3M SIBOR + 0.625%
Year 3
3M SIBOR + 0.625%
Thereafter
3M SIBOR + 0.625%
FEATURES
Commencement Date
3 months from the date of Letter of Offer or first disbursement of the
Minimum Loan Amount
$100,000
Minimum Loan Period
5 years
Commitment Period
3 years
BENEFITS
Legal Subsidy
• 0.40% of aggregated loan amount up to $2,500 (whichever is lower)
• Full legal subsidy for loan size >$400,000 (applicable for tie up law firms only)
Other Benefits
• Free fire insurance with home contents coverage for 5 years
• Free valuation
TERMS & CONDITIONS
• One time free conversion within 6 months from date of issuance of TOP
Commitment Fee
Nil
Prepayment Fee
Nil
Admin Fee
Nil
Cancellation Fee
0.75% on the loan amount cancelled or undisbursed at the end of the availability period
Clawback Period
To be refunded if loan is redeemed within 3 years from date of first disbursement
SIBOR Package 2
No Lock-In 3 Years Lock-In
Year 1 to Year 3: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 0.60%
Thereafter: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 1.25%
Terms Of Package:
· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only
· Nil for partial & full redemption (for no lock in package)
1.50% of amount applicable if prepaid of loan o/s is less than SGD$100k after partial repayment
(For no-lock in package, condition is imposed for 1 year)
· 3 Years Lock in package - partial redemption & full redemption 1.50% within 3 years
· Legal subsidy of 0.50% of loan amount, subject to cap of S$2,500. Refund applicable if loan is redeemed within 3 years from drawdown.
· Free valuation (For Pte only)& One Time Free Conversion; 6 Months from TOP
· 5 years fire insurance from TOP
· One month free coverage for HomeSurance Classic if a full year cover is taken up.
· First month premium waiver for MortgageProtector.
· Home Assist - 24-hour home assistance service for emergency repairs at no extra cost
Any suggestions between the two packages?
flagship74
20-08-11, 10:35
Sibor Package 1 (No Lock)
INTERST RATES
Year 1
3M SIBOR + 0.625%
Year 2
3M SIBOR + 0.625%
Year 3
3M SIBOR + 0.625%
Thereafter
3M SIBOR + 0.625%
FEATURES
Commencement Date
3 months from the date of Letter of Offer or first disbursement of the
Minimum Loan Amount
$100,000
Minimum Loan Period
5 years
Commitment Period
3 years
BENEFITS
Legal Subsidy
• 0.40% of aggregated loan amount up to $2,500 (whichever is lower)
• Full legal subsidy for loan size >$400,000 (applicable for tie up law firms only)
Other Benefits
• Free fire insurance with home contents coverage for 5 years
• Free valuation
TERMS & CONDITIONS
• One time free conversion within 6 months from date of issuance of TOP
Commitment Fee
Nil
Prepayment Fee
Nil
Admin Fee
Nil
Cancellation Fee
0.75% on the loan amount cancelled or undisbursed at the end of the availability period
Clawback Period
To be refunded if loan is redeemed within 3 years from date of first disbursement
SIBOR Package 2
No Lock-In 3 Years Lock-In
Year 1 to Year 3: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 0.60%
Thereafter: 1 Month or 3 Months SIBOR + 0.75% 1 Month or 3 Months SIBOR + 1.25%
Terms Of Package:
· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only
· Nil for partial & full redemption (for no lock in package)
1.50% of amount applicable if prepaid of loan o/s is less than SGD$100k after partial repayment
(For no-lock in package, condition is imposed for 1 year)
· 3 Years Lock in package - partial redemption & full redemption 1.50% within 3 years
· Legal subsidy of 0.50% of loan amount, subject to cap of S$2,500. Refund applicable if loan is redeemed within 3 years from drawdown.
· Free valuation (For Pte only)& One Time Free Conversion; 6 Months from TOP
· 5 years fire insurance from TOP
· One month free coverage for HomeSurance Classic if a full year cover is taken up.
· First month premium waiver for MortgageProtector.
· Home Assist - 24-hour home assistance service for emergency repairs at no extra cost
Any suggestions between the two packages?
any SOR package bo?:beats-me-man:
Are you taking a loan for completed or uncompleted/new launch property?
Are you taking a loan for completed or uncompleted/new launch property?
Uncompleted.
Shopping for a mortgage loan in Singapore
...
Borrow what you need
You should borrow only the amount of loan that you need. If you borrow less, you will pay less in interest.
I disagree. At 1% p.a. interest, I borrow the max amount and max term.
It's not the absolute number of dollars paid that matters; It's the effective amount after accounting for opportunity cost and inflation. Money today is worth more than money tomorrow (except if there's deflation).
Uncompleted.
First, I consider the risks:
1. From 2013, Sibor rates might increase significantly when the Fed's commitment to keep interest rates low expires. http://economicsnewspaper.com/world-economics/the-federal-reserve-will-keep-rates-low-until-2013-55148.html
2. From 2015, the bank reserve requirement will increase. This may cause banks to increase the spread %.
http://www.mas.gov.sg/news_room/press_releases/2011/MAS_Strengthens_Capital_Requirements_for_Singapore_incorporated_Banks.html
Based on the risks, I will choose package 1 - which I think is UOB's package.
- No legal fees if you use their tie-up law firm. This saves you at least 1K upfront. Unless you have a trusted lawyer that you want to use, this is a good deal. (In loan documents, the banks will always state that you have to pay all the legal fees and you have no idea how much it will cost you.)
- No pre-payment/redemption charge. Should interest rates increase significantly, you can pay down the loan with no penalty charges.
- Lowest rate among all for yr 4 onwards (small difference in rates from yr 1 to yr 2 result in small difference in interest amount in dollar because it's uncompleted property). You'll see the full effect of any interest rate difference in yr 3 and yr 4. If you choose package 2 with lock-in, and you want to re-finance in yr 4 (approx 2015), all the banks might have increased their spread to more than 1% so you might have no choice but stick with 1% spread. But of course if they reduce it, you can re-finance. With package 1, it's 0.625% from yr 4. You only pay 0.025% on the amount drawn for some certainty in 2015.
I disagree. At 1% p.a. interest, I borrow the max amount and max term.
It's not the absolute number of dollars paid that matters; It's the effective amount after accounting for opportunity cost and inflation. Money today is worth more than money tomorrow (except if there's deflation).
I'll do that too. When else do you get 1% interest rates? :beats-me-man:
Max the loan out. Keep the extra cash handy for other investments. Can always make lump sum pre-payments if you want to when rates go up.:D
Do check on the charge of the undisbursed amount of the loan amount as yours is BUC loan. It is about one year after TOP.
Any suggestions between the two packages?
whats your quantum and which project? perhaps I can source for alternative rates. you can email me at
[email protected]
Do check on the charge of the undisbursed amount of the loan amount as yours is BUC loan. It is about one year after TOP.
Are you referring to the undispursed amount after cancellation?
· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only
Care to explain? Thks.
This is correct.
Are you referring to the undispursed amount after cancellation?
· Cancellation Fees: 0.75% - this applies to undisbursed loan amt only
Care to explain? Thks.
Will SOR surpass SIBOR?
Date: 28 Oct 2011
No Key Closing Levels LastPrevious1SGD 3 month SIBOR Fixing0.38%0.38%2SGD 3 month SOR Fixing0.36%0.35%
With so many Bank offering loans, which one is the most competitive.?
I know that UOB if tie up with a UOL devlopment will be unbeatable rates.
Does anyone know how is standchart like as they seems reasonable at SIBOR + 0.5 and comes with the std freebies. I think we are paying for it but its still nice to consider it as a freebie.
This is for BUC.
With so many Bank offering loans, which one is the most competitive.?
I know that UOB if tie up with a UOL devlopment will be unbeatable rates.
Does anyone know how is standchart like as they seems reasonable at SIBOR + 0.5 and comes with the std freebies. I think we are paying for it but its still nice to consider it as a freebie.
With so many Bank offering loans, which one is the most competitive.?
I know that UOB if tie up with a UOL devlopment will be unbeatable rates.
Does anyone know how is standchart like as they seems reasonable at SIBOR + 0.5 and comes with the std freebies. I think we are paying for it but its still nice to consider it as a freebie.
Mine is BUC, 1 month Sibor+0.5% (1st year), 1 month Sibor+0.5% (2nd year) and 1 month Sibor+0.6% (3rd year). 5 years fire insurance. Legal subsidy is SG$3,500. I didnt buy my unit during launch so there was no special tie up with any banks.
4 nov:
No Key Closing Levels LastPrevious1SGD 3 month SIBOR Fixing0.38%0.38%2SGD 3 month SOR Fixing0.40%0.40%
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