MortgageGuru
09-01-18, 16:48
The current OHR rate is at 1%.
It works by using the long term average 1 & 3 month sibor for the past 12 years.
Past rate:
END OF
PERIOD INTERBANK
1-MONTH INTERBANK
3-MONTH
2006 3.44 3.44
2007 2.00 2.38
2008 0.75 1.00
2009 0.44 0.69
2010 0.31 0.44
2011 0.31 0.38
2012 0.31 0.38
2013 0.37 0.40
The past 12 years meaning OCBC derived their 1% OHR from 2006-2017.
2006 average is at 3.44%
2007 at 2.19%
2008 at 0.875%
2009 at 0.565%
2010 at 0.375%
2011 at 0.345%
2012 at 0.345%
2013 at 0.385%
Grand total of these 8 years = 8.52%
This means that 2014-2017 total is 3.48% in order for the 1% P.A theory to stand because 12% / 12 years = 1%
Current 1 & 3SIBOR average stands at approximate 1.41%, highest in recent time with 0.3% increment in two month span.
The highest spike for SIBOR was at 0.88% during a one month period from 2008 August to September. If you remember, this happened during the financial crisis period.
forecast:
Assuming 1 & 3 month sibor steadily increase 0.3% for the 3 years we will see it like this
2018: 1.41%
2019: 1.71%
2020: 2.01%
Grand total of 5.13% increment for the next 3 year while 2006-2008 phased out at 6.505%. This still result in 1.375% drop from 12% to 10.625%, averaging it out to be 0.88% for OHR for your 3rd year.
real 3 years forecast
2018 1&3 month sibor conservative to be at 1.5%
2006 phased out 3.44%
Average rate to stand at 12% + 1.5% less off 3.44% = 10.06% divide 12 = 0.838%
Expected EIR to be 0.838% + 0.5%(deviated based 1st year) = 1.338%
2019 another 0.5% increment will result in 2%.
2007 phased out 2.19%.
Average rate 10.06% + 2% less off 2.19% = 9.87% divide 12 = 0.823%
Expected EIR to be at 0.823% + 0.5% = 1.323%
2020 another 0.5% to make it 2.5%
2008 phased out 0.875%.
Average rate 9.87% + 2.5% less off 0.875% = 11.495% divide 12 = 0.958%
Expected EIR to be at 0.958% + 0.7% = 1.658%
Basically, this is almost a fixed rate and you'll be going in for this rate at:
1st year: 1.6%
2nd year: 1.338%
3rd year: 1.323%
4th year: 1.658%
This is assuming sibor at a ascending order of 0.5% each year for the next 3 years, if it's lower than 0.5% increment each year, your savings will be even higher!
Now, do you agree OCBC OHR rate is the best in market now?��
It works by using the long term average 1 & 3 month sibor for the past 12 years.
Past rate:
END OF
PERIOD INTERBANK
1-MONTH INTERBANK
3-MONTH
2006 3.44 3.44
2007 2.00 2.38
2008 0.75 1.00
2009 0.44 0.69
2010 0.31 0.44
2011 0.31 0.38
2012 0.31 0.38
2013 0.37 0.40
The past 12 years meaning OCBC derived their 1% OHR from 2006-2017.
2006 average is at 3.44%
2007 at 2.19%
2008 at 0.875%
2009 at 0.565%
2010 at 0.375%
2011 at 0.345%
2012 at 0.345%
2013 at 0.385%
Grand total of these 8 years = 8.52%
This means that 2014-2017 total is 3.48% in order for the 1% P.A theory to stand because 12% / 12 years = 1%
Current 1 & 3SIBOR average stands at approximate 1.41%, highest in recent time with 0.3% increment in two month span.
The highest spike for SIBOR was at 0.88% during a one month period from 2008 August to September. If you remember, this happened during the financial crisis period.
forecast:
Assuming 1 & 3 month sibor steadily increase 0.3% for the 3 years we will see it like this
2018: 1.41%
2019: 1.71%
2020: 2.01%
Grand total of 5.13% increment for the next 3 year while 2006-2008 phased out at 6.505%. This still result in 1.375% drop from 12% to 10.625%, averaging it out to be 0.88% for OHR for your 3rd year.
real 3 years forecast
2018 1&3 month sibor conservative to be at 1.5%
2006 phased out 3.44%
Average rate to stand at 12% + 1.5% less off 3.44% = 10.06% divide 12 = 0.838%
Expected EIR to be 0.838% + 0.5%(deviated based 1st year) = 1.338%
2019 another 0.5% increment will result in 2%.
2007 phased out 2.19%.
Average rate 10.06% + 2% less off 2.19% = 9.87% divide 12 = 0.823%
Expected EIR to be at 0.823% + 0.5% = 1.323%
2020 another 0.5% to make it 2.5%
2008 phased out 0.875%.
Average rate 9.87% + 2.5% less off 0.875% = 11.495% divide 12 = 0.958%
Expected EIR to be at 0.958% + 0.7% = 1.658%
Basically, this is almost a fixed rate and you'll be going in for this rate at:
1st year: 1.6%
2nd year: 1.338%
3rd year: 1.323%
4th year: 1.658%
This is assuming sibor at a ascending order of 0.5% each year for the next 3 years, if it's lower than 0.5% increment each year, your savings will be even higher!
Now, do you agree OCBC OHR rate is the best in market now?��