Can someone share with me what are the pros and cons of SIBOR or SWAP for a mortgage? I am unsure which to go for. - Seedly
 

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Asked by Anonymous

Asked on 24 May 2019

Can someone share with me what are the pros and cons of SIBOR or SWAP for a mortgage? I am unsure which to go for.

They are always asking me if I prefer SIBOR or SWAP, which should I go for?

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Hi, Douglas here. 2nd Keynote speaker.

The main difference between the two is that SIBOR is more steady while SOR (Swap offer rate) is more volatile.

SIBOR stands for Singapore Interbank Offered Rate. It is simply an interest rate that banks in Singapore charge to each other. So it's pretty Stable.

If the SGD strengthens against the USD, there will be a downward pressure on SOR, decreasing its value. The opposite happens if the greenback strengthens against the SGD. As the SGD/US exchange rate fluctuate, you can expect SOR Rate to fluctuate in tandem.

If SGD weakens against USD (to boost Singapore's export), you can expect SOR rate to go up. Of cos, with the trade dispute between US and China now, it's impossible to predict with accuracy how the USD/SGD exchange rate will play out since MAS pegs SGD to a basket of currency.

For more stability and peace of mind you can opt for SIBOR which is what i did for my first property loan more than 10 years ago! And u can refinance when the circumstances dictate.​​​

You can always connect with me via https://www.facebook.com/douglas.chow.908 or simply whatsapp/sms my company 24/7 hotline @83324283

Remember, plan your finances properly, don’t overstretch, do your homework and enjoy your property investment journey.

Regards

Douglas Chow

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