Tue, Aug 18, 2020 – 7:22 PM
OCBC Bank has launched a new Sora-based home loan, which references the three-month compounded Singapore overnight rate average (Sora) that is published by the Monetary Authority of Singapore (MAS).
The three-month Compounded Sora Home Loan is available for all loan types – completed properties, properties under construction, new home loans and repricing of existing home loans. This comes as the industry is moving towards adopting Sora – the average rate of unsecured overnight interbank Sing dollar transactions brokered in Singapore – as the new interest rate benchmark for the SGD cash and derivatives market.
The new compounded Sora home loan by the bank will replace a Sora-based home loan that was launched by OCBC on July 13 which based interest rates on a simple average of the daily Sora rates in the preceding 90 calendar days. In the first two weeks of its launch, over S$50 million in loans were approved, said OCBC.
Like the three-month Singapore Interbank Offered Rate (Sibor) home loan package, the three-month Compounded Sora home loan package has a two-year lock-in period. Customers can make pre-payments of up to 50 per cent of the loan amount in the first two years with no penalty.
Sunny Quek, head of consumer financial services at OCBC Bank, said: “We received a positive response to the industrys first retail Sora-pegged home loan that was launched last month. This shows that consumers are receptive to Sora as the new interest rate benchmark for SGD markets. With MAS publication of the key features and calculation methodology of Sora as well as the actual compounded Sora rates, consumers should be even more open to adopting Sora as the transparency and data availability are further enhanced."
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In Singapore, the MAS publishes SoraRead More – Source