Last updated on 14 October 2018.
If you are looking for housing loan in Singapore, you will realise that there are a few different types of loan packages to choose from. Home loan borrowers are spoilt for choice with a myriad of loan packages that are offered by banks.
More than a decade ago, you can only find housing loan packages that are pegged to bank’s mortgage board rates. Bank’s board rate is internal cost set by the bank. Around 2006-2007, banks introduced packages that are pegged to SIBOR (Singapore Interbank Offer Rate) or Swap Offer Rate (SOR)
which offers more transparency. SIBOR and SOR are considered market rates.
In 2014, we saw DBS launched home loan packages pegged to their SGD Fixed Deposit rate. Other banks, like UOB, OCBC, Maybank, Stanchart and HSBC also followed suit in offering mortgages pegged to banks' fixed deposit rates, ranging from 8 months fixed deposit rate to 48 months fixed deposit rate.
In early 2018, some banks, like UOB, OCBC and Maybank have however switched back to packages pegged to Mortgage Board Rates. Leaving with only 3 banks, namely DBS, Stanchart and HSBC still offering fixed deposit rate pegged packages.
With this, we came across more customers checking on the differences between property loan pegged to SIBOR, Fixed Deposit rates and Board rates.