Free Advice/Discussion on Bank Mortgage loan

Property_Broker

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Thanks for the kind words.

On 1) I thought can siam engaging lawyer as I thought lawyer only needed if need to fully redeem/repay the loan one shot. So what I did was pre-pay but still left 1 or 2 month monthly payment, and finish paying like that. So you mean even if I fully pay back, I still need to engage lawyer to "redeem" the loan and get title ah?

2)Yes, the insurance that covers if I uplorry, then insurance company will pay up the remaining loan. By right they should just auto collecting my premiums.

3) I thought its good to continue having this fire insurance even after loan is fully paid? Was wondering if it will continue to be in effect.
1) Yes correct. This is based on my understanding.. Cannot run one.. Even if you are on HDB loan, i know you will have to engage HDB solicitor to redeem it. haha!

2) Usually for such mortgage insurance (Term insurance), there is a cease date one. You will need to check on your policy.

3) It should pegged to your loan one. If you finish paying the loan, it should cease. No worries! U can get from outside. Dont buy from bank. It is more exp from bank. haha!
 

Property_Broker

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Hi all, need some advice on whether should refinance my mortgage loan. Currently am paying 0.6%+1m SIBOR and already out of lock-in period. Have looked at current packages and so far, best offer received is 0.6%+1m SORA (2 years lock-in and 3 years clawback). Is this a good offer? Or rather, is this a good time to refinance?

Also, any idea if there will be penalty fee to refinance with another bank?
Hi @Anpanman7 ,


I will recommend you to look through the previous post by the forum folks! There are a few people asking on this questions previously.



19 May 2022
1m Sibor: 0.86464%
3m Sibor: 1.22500%

26/5/2022
1m SORA: 0.8984%
3m SORA: 0.5048%

I will choose SORA over SIBOR for sure. Based on 2 reason
1) SORA is backward looking and SIBOR is forward looking. So it is more transparent for SORA
2) SORA is lower rate as compare to SIBOR.

I will recommend you to look at 3m SORA rather than 1m SORA. In a raising interest rate environment, it is better to go with 3m Sora. So your rate will change quarterly rather than monthly.

If you are within lock in period or clawback period with your existing bank, you will incur penalty for refinancing. Please call in your existing bank to check on it. You can ask them for repricing package so you can do comparison.
 

babytohox

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Hi anyone know when is the dbs 5yr fixed rate promotion will end? We are still waiting for our HDB valuation. Cant apply first right? TIA
 

Anpanman7

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Hi @Anpanman7 ,


I will recommend you to look through the previous post by the forum folks! There are a few people asking on this questions previously.



19 May 2022
1m Sibor: 0.86464%
3m Sibor: 1.22500%

26/5/2022
1m SORA: 0.8984%
3m SORA: 0.5048%

I will choose SORA over SIBOR for sure. Based on 2 reason
1) SORA is backward looking and SIBOR is forward looking. So it is more transparent for SORA
2) SORA is lower rate as compare to SIBOR.

I will recommend you to look at 3m SORA rather than 1m SORA. In a raising interest rate environment, it is better to go with 3m Sora. So your rate will change quarterly rather than monthly.

If you are within lock in period or clawback period with your existing bank, you will incur penalty for refinancing. Please call in your existing bank to check on it. You can ask them for repricing package so you can do comparison.
Thank you for your advice! It is my first mortgage loan and the advice provided by the banks and brokers are all so different so I was really confused over what option to go for. I guess I am considering whether it will be useful for me to stay on with my current agreement till it is time to switch over to SORA. The savings in monthly payments are not much at this point so I am wondering if it is wise to switch over now and get locked in for another 2 years?
 

wolverine23

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current on 3M SIBOR + 0.5% throughout

Worth it to reprice to 3M SORA + 0.65% (1st 2 years) / +0.7% (3rd year) / +1% throughout thereafter ?
 

Property_Broker

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Hi anyone know when is the dbs 5yr fixed rate promotion will end? We are still waiting for our HDB valuation. Cant apply first right? TIA
Hi @babytohox ,

Are you referring to the DBS 5 years fixed @ 2.05%? So far no news that it will be removing. Should be safe for your case.

You can apply the loan once you have gotten the valuation report. Then the banker can help you lock in the rates.

Do le met know if you need my help on the loan. Cheers.
 

Property_Broker

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Thank you for your advice! It is my first mortgage loan and the advice provided by the banks and brokers are all so different so I was really confused over what option to go for. I guess I am considering whether it will be useful for me to stay on with my current agreement till it is time to switch over to SORA. The savings in monthly payments are not much at this point so I am wondering if it is wise to switch over now and get locked in for another 2 years?
no problem! happy to help always~
Yea.. Everyone has their point of view. Hence i always let my client know the pros and cons for every package and decision. So that they can make the final decision based on their risk profile.

Fixed rate is more applicable for conservative client that prefer fixed monthly installment.

Floating rate is more applicable for client that willing to take a slight risk to have lower rate.. In return their rate will change on a monthly or quarterly basis.

If you feel that SIBOR is the better choice now.. you can stick with it..

but for me~ I think SORA is better than SIBOR at the moment..
 

Property_Broker

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current on 3M SIBOR + 0.5% throughout

Worth it to reprice to 3M SORA + 0.65% (1st 2 years) / +0.7% (3rd year) / +1% throughout thereafter ?
19 May 2022
1m Sibor: 0.86536%
3m Sibor: 1.22500%

27/5/2022
1m SORA: 0.9101%
3m SORA: 0.5080%

You should be paying around 1.7%+ soon based on your existing package.

If you reprice with SORA package, you will be paying around 1.15%.. I will say go for the SORA package is better..
Unless you will be selling your property soon and you dont want get caught in the lock in period. Then it is better to stick with current package.
 

wolverine23

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19 May 2022
1m Sibor: 0.86536%
3m Sibor: 1.22500%

27/5/2022
1m SORA: 0.9101%
3m SORA: 0.5080%

You should be paying around 1.7%+ soon based on your existing package.

If you reprice with SORA package, you will be paying around 1.15%.. I will say go for the SORA package is better..
Unless you will be selling your property soon and you dont want get caught in the lock in period. Then it is better to stick with current package.

Should I wait for a better spread?
 

Property_Broker

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Should I wait for a better spread?
Yup~ That is another option as well~

But do take note that while you are waiting for the better package, you are paying higher rate as compare to get 3m sora + 0.65% now.

Assuming you gotten 3m sora + 0.55% in the next 3 to 6 months? But you are paying higher rate all these while. Is it worth it? You will have to do the calculation~

This is assuming that you are able to get a lower spread package. Of course when SORA is going upward, the bank should give lower spread to attract client. But this is based on the assumption.. I am just worried that the bank refused to reduce the spread as for now.

Reason?
1) The fixed rate is around 2.4%(Fixed for 2 years) now. The SORA package is around 1.2~1.4%. The gap is still 1%+.. There is no reason to close the gap at the moment by reducing spread at the moment.

2) There are a lot of clients going for floating rather than fixed. Supply and demand?
 

wolverine23

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Yup~ That is another option as well~

But do take note that while you are waiting for the better package, you are paying higher rate as compare to get 3m sora + 0.65% now.

Assuming you gotten 3m sora + 0.55% in the next 3 to 6 months? But you are paying higher rate all these while. Is it worth it? You will have to do the calculation~

This is assuming that you are able to get a lower spread package. Of course when SORA is going upward, the bank should give lower spread to attract client. But this is based on the assumption.. I am just worried that the bank refused to reduce the spread as for now.

Reason?
1) The fixed rate is around 2.4%(Fixed for 2 years) now. The SORA package is around 1.2~1.4%. The gap is still 1%+.. There is no reason to close the gap at the moment by reducing spread at the moment.

2) There are a lot of clients going for floating rather than fixed. Supply and demand?
will spreads go to 0.2% thereabouts?
 

boroangel

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Hi @babytohox ,

Are you referring to the DBS 5 years fixed @ 2.05%? So far no news that it will be removing. Should be safe for your case.

You can apply the loan once you have gotten the valuation report. Then the banker can help you lock in the rates.

Do le met know if you need my help on the loan. Cheers.

PB, wasn't the 5 year fixed rate only at 1.9% or thereabouts 2 weeks ago? :eek:
 

Property_Broker

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will spreads go to 0.2% thereabouts?
haha! i got no crystal ball..

But based on last 10 years track records...

I got help client secured SIBOR + 0.3% package before.. It is around 1st quarter 2020..

SIBOR rate was around 1.5~1.7% by then.. But there are going downtrend..

So back to your questions~ I think it is possible if SORA hit 1.5~2%.. yes!
 

Property_Broker

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PB, wasn't the 5 year fixed rate only at 1.9% or thereabouts 2 weeks ago? :eek:
yup~ The local banks have been revising their package for every 2-3 weeks since March..

5 years fixed @ 2.05%

2 years fixed @ 2.45%
3 years fixed @ 2.6%

lol~ insane as compare to first quarter this year.
 

KayElf

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Which is better?

Bank D
Year 1 - 3 : 3 months SORA + 0.75%
Thereafter : 3 months SORA + 0.80%

Bank O - no need purchase fire insurance
Year 1: 0.70% + 3mth sora
Year 2: 0.70% + 3mth sora
Year 3: 0.75% + 3mth sora
Thereafter: 1.00% + 3mth sora
 

wolverine23

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haha! i got no crystal ball..

But based on last 10 years track records...

I got help client secured SIBOR + 0.3% package before.. It is around 1st quarter 2020..

SIBOR rate was around 1.5~1.7% by then.. But there are going downtrend..

So back to your questions~ I think it is possible if SORA hit 1.5~2%.. yes!

currently any banks offering 0.5% spread?
 

Property_Broker

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Which is better?

Bank D
Year 1 - 3 : 3 months SORA + 0.75%
Thereafter : 3 months SORA + 0.80%

Bank O - no need purchase fire insurance
Year 1: 0.70% + 3mth sora
Year 2: 0.70% + 3mth sora
Year 3: 0.75% + 3mth sora
Thereafter: 1.00% + 3mth sora
It look like a BUC rates..

If it is a BUC rate, it is important for you to factor in the TOP decision.

Once you TOP, you are eligible with fixed and floating rate.

E.g. If you gonna TOP within 2 years, it is better to go with OCBC.

If you gonna TOP within 4 years, it is better to go with DBS.


Anyway what is your loan amount? These package dont look very competitive.
 

LordEquniox

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whats the difference between for 5 year horizon between these packages:

0.75 + 3m sora (same rates for 5 years)

vs
0.75 + 3m sora (same rates for 2 years)
1.25 + 3m sora
1.75 + 3m sora
2.25 + 3m sora

i don't get why would someone choose (2) instead of (1).
 
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