And you continue to miss the point, and perpetuate false fallacies - will OHR ALWAYS take the long term average? you seem intent to emphasize the advantageous calculation of OHR, without even taking into account the fact that the manner in which OHR is calculated
Yes, I am questioning your ethics, and I am questioning your motivations whereby you continue to sing the virtues of OHR, without disclosing the downsides.
If its up to the banker to explain the downsides, then why not leave the banker to explain the upsides as well? What exactly do you stand to gain by continuing to preach the virtues of OHR without disclosing the downsides?
conscience is perfectly clear. I do not choose a username like "MortgageSingapore" which with such a nick at least gives the impression you are in the industry, and have some knowledge and expertise in this area. Why?
Just because you do not have any financial gain or derive any benefit from your posts or have forumers approach you to broker their loans(which I strongly doubt) does not give you carte blanche to blithely point out only the benefits of a product and leave out the downsides (which may have the effect of totally erasing whatever benefits you are pointing out). Similarly being responsive and vocal does not give you the right to mislead and deceive people here.
Since you brought up free speech, I totally agree, and I am exercising my right to call you out as I see fit.
Nope, your "advice" is much more absolute than that. on top of that, you do not disclose the fact that the manner in which OHR is calculated can be changed anytime (and is thus subject to instability). You allude to the stability and the almost "fixed" nature of OHR and also make the point that OHR is going to stay at or below current OHR rate.
This takes the cake - so how can a rate be said to be "safer"? Are you guaranteeing that the OCBC board rate will remain lower than all other competing rates? You also make forward looking predictions as to where the rate is headed - which institution do you come from as I would like to get the benefit of such predictions.
This again, is how one sided and absolute your advice is. You hide the downsides of the OHR, and brush it off after being called out with the statement that the banker will explain everything.
In that case, since the banker does the explaining, then why do you need to continue with your one-sided praise of OHR? Leave the job to the bankers as well then!
Below is what I posted back on January which I'm sure some definitely have seen it before be it here or elsewhere.
Why OCBC OHR rate is the best in market!
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?
I believe I have explained it clearly on how OHR works. If you need me to state a clause that every bank has the rights to change their t&c.
I'm sorry for not stating that then as I assumed members in the forum here are long enough to know this. My bad, I apologise and hope it makes your day and weekend.