Sibor is the rate at which banks in Singapore lend to one another, whereas SOR refers to the average cost of funds used by banks here for commercial lending.
As most housing loan interest rates track movements in the Sibor or SOR, this means that when the respective rates shift upwards or downwards, the interest rates of the home package will move in the same direction.
Analysts say that for homeowners buying properties over long-term periods, it is advisable to choose a loan with fixed rates or Sibor-pegged home package, as Sibor rates are known to be relatively more stable than SOR rates.
However, for home buyers with more aggressive risk appetite and who are investing over a shorter time horizon, they may consider the SOR-pegged packages at a time when the SOR rates are lower and more attractively-priced than Sibor rates.
May 17, 1-mth SIBOR = 0.32078; 1-mth SOR = 0.22832
