People who know me would know that I have never been a proponent of taking up "floating rate" property loans. It is for the worry of causing "disruptions" (inconvenience) to the monthly cash flows, particularly when rates go up. Having a fixed rate eliminates the need to monitor and worse, if you have to watch the rates going up (in despair, literally) while still serving a "lock-in" obligation period (if there is any).
However, in one of my recent cases for a client in refinancing, due to some reasons, leaves us not much choice but to really look into it.
I went on to find out about the Singapore Overnight Rate Average (SORA), calculated the standard deviation, average etc and found it worth a consideration, amongst the rising fixed rates and tightening screening criteria and rules now.
My personal take: 3-mth SIBOR + 1%
References:
Standard Chartered SIBOR-pegged Home Loan (3-mth SIBOR), DBS SIBOR Package, ERA Singapore
Based on SCB's, as of June2008 : 1.19% + 1% = 2.19%
Worst case scenario is 3.39% + 1% = 4.39% within next 24 mths
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