Refinancing 602

June 02, the day my housing loan re-pricing was effected. Buried under a pile of letters that i have forgotten to look through was a letter from my bank that says “the interest rate chargeable on your loan account will be revised 2.850000% to 2.018050% per annum on a monthly rest basis”. Finally the savings i have been anticipating have materialized!

The 3 month SOR fixing seems to have fallen quite a bit to 1.33% after surging to 1.55% a few days ago. Interestingly this seems to be correlate well with the Fed Funds Rate Predictions which is showing a higher probability for the interest rate to remain at 2% for both the June and August meetings. Looks like good news for home owners. Nevertheless, there is ever the need to monitor interest rate movements and to act on it quick where possible.

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Singapore Interest Rates Surge

The Swap Offer Rate (SOR) which i have been tracking has surged to 1.55 and 1.98 respectively for 3 months and 6 months fixing respectively. This is indeed alarming for those who have taken up home loans that are linked to SIBOR or SOR. How are interest rates going to move in the coming year? That is the million dollar question.

I thought i had better do some research to have a sense of bearing. First stop, what do analysts think? There are a few trains of thoughts:

  • The Federal Reserve is unlikely to raise rates ahead of the election
  • The Federal Reserve is unlikely to raise rates soon given the weak job and housing market
  • The Federal Reserve will raise rates to fight inflation

There has been repeated talks by Federal Reserve representatives, including Ben Bernanke himself, that fighting inflation is going to take priority. This had quite an effect on the market, sending the dollar, short term bond yields and also interbank lending rates higher in anticipation of a possible rate hike. The SIBOR and SOR is probably reacting likewise.

Many analysts however maintain that the Feds will keep rates at current levels until there is more evidence of economic stability. Meanwhile, India has raised its interest rates, and there is a possibility that ECB may raise rates.

So what does this mean for home owners? Probably a sigh of relief for now, at the same time a wake-up call to keep a very close watch on possible interest rate movements.

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Building a cheap (and decent) Hi-Fi


I want a cheap and decent Hi-Fi. I was wondering, can i get something better with what people normally pay for a Hi-Fi? I know the off-the-shelf home theatre systems can go as low as S$250, but the itch to go the DIY way was just too hard to overcome. So, without actually evaluating any ready-made home theatre system, i decided to go ahead and build one!

The whole idea of a DIY Hi-Fi actually came from stumbling upon the T-Amp on ThinkGeek site. It is touted to be a US$30 amplifier that sounds like something 100 times its price (review here). Now that’ll fit my criteria for cheap and decent!

The next thing i acquired was the Creative USB Sound Blaster Digital Music SX. What caught my attention was the ability of this product to act as a pre-amp which is basically the equivalent of a receiver. I managed to get this piece of hardware at S$107, which is much cheaper than what receivers typically cost. I foresee that i wouldn’t have more than 2 or 3 sources of sound input so this will work just fine. It even comes with a remote control which is handy for controlling sound volume. The built in USB sound card was just an extra feature that i eventually used for sound output from my laptop.

Finally, to complete the set-up, i needed speakers. Again my search is based on “best among the budget”. Very quickly i settled my choice on the Monitor Audio Bronze BR2 as well as the Wharfedale SW150 subwoofer, both of which had been What Hi-Fi award recipients.

All in all, i spent around S$1300. Not cheap compared to the ready-made home theatre systems, but relatively cheap for a real Hi-Fi system. Amplifiers can easily cost S$1300. So how does my Hi-Fi sound? It is superb! Now i’m no audiophile, but i know it when i’m hearing clean and clear sound, with details exposed i never knew existed before. In fact, it reveals so much detail, i found out that some familiar tracks don’t sound as good as i thought they did..

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Building a cheap (and decent) home media PC


Objective: cheap, excellent sound quality, quiet, decent looking, cheap. One option is to go for the small form factor barebone pc which can be cheap (~S$160) but it will probably mean you have to use the onboard sound which is not going to satisfy my criteria for excellence in sound quality. The solution is to use standard form factor components housed in a compact casing.

Here’s the list of the components i have used and the estimated price (in S$):

MSI K8MM3-V Motherboard 100
AMD Sempron 2800+ CPU 50
512MB DDR RAM 30
WD 160GB Harddisk 80
Casing 60
HEC MiniQ 300 Power Supply 60
LG DVD Writer 50
Thermaltake Golden Orb 2 CPU Fan 50
ATI 9200SE Videocard 50
E-MU 0404 PCI Soundcard 140
Microsoft Wireless Optical Desktop 2000 45
Total 715

Ok, i have to admit it may not be cheap afterall, but this meets the minimum requirement i have for a media PC. Here’s the reasoning behind the choice:

Motherboard, CPU, RAM and Harddisk Any low cost combination will do (CPU should be >1GHz). Use any existing ones you have or even try looking out for those that are being phased out
Casing Use a horizontal casing so you can load your DVDs like it’s a DVD player
Power Supply Usually the most noisy part of a PC, choose one that is sufficiently quiet
DVD Writer Although you only need to read DVDs on a media PC, DVD writers are so cheap you might as well pay a little more to get them. Go for a quiet one
CPU Fan Stock fans are too loud, replace it with an 18dB or lower one. Make sure it can fit into your casing as many CPU Fans are enormous in size!
Videocard A basic card with DVI output will do. Consider going for a fanless one so it won’t be an additional source of noise
Soundcard It pays to get a decent soundcard which will make a world of difference to the sound quality. Don’t use the onboard sound!
Wireless keyboard and mouse Use wireless keyboard and mouse so you can sit back, relax and control your media PC from your couch. Make sure the range is the length of your living room

Check out the innards of my media PC. Note how little space there is for placing a CPU Fan so do note down the measurements of the space available (including height) before you buy one! The small size of the power supply helps.

MediaPCBare  MediaPCTop

Stay tuned for my follow up posting on building a Hi-Fi!

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Refinancing 101

Having in mind that i was approaching the end of 3 years with my current home loan package, i set off to check what was available in the market before the much higher 4th year rate kicks in. Now my loan package had no lock-in period at all, so i really should have done some investigation earlier to take advantage of lower home loan rates, if there was any. I looked, and lo and behold, home loan rates have indeed come down quite a bit. My original 3rd year rate was 2.85% which i thought was not a bad deal, but i found new home loan rates at 2.30% – 2.40% with 2 years lock-in. That means quite significant savings on interest payment.

So which is the best home loan package available? Market conditions are changing so quickly that the answer i put down here may be obsolete within a week. Eventually i decided to take up the SOR (Swap Offer Rate) linked loan package (some information available here).

At the time of this writing, the 3-month fixing SOR rate is 1.31%. The bank charges 0.65% on top of this rate, which means the overall rate is 1.96%. Yes, this is a very attractive rate (compared to 2.30%). In fact, the SOR had fallen to 1.17% at one point. I have started tracking the movement of the SOR (see my Daily SOR chart).

So what’s the catch to the SOR linked loan package? It is a floating rate package whereby the interest rate is changed every 3 months. You bear the risk of interest rates going higher (and it can potentially move by as much as 0.40% in a matter of a few days as can be seen in the SOR chart). Conversely, if interest rates move lower, you will stand to reap interest savings every 3 months. So can we have a sense of how the SOR rates will move?

For one, SOR is effectively SIBOR plus a bank’s lending costs, and SIBOR tends to track the United States Federal Reserve funds rate which is currently at 2.00%. Now i’m no expert in economic policies, but i do know the interest rate is a delicate instrument that can make or break the economy. Set the interest rate higher and it may curb spending and suppress inflation but suppress economic growth at the same time. Set the interest rate lower and it can stimulate the economy by encouraging spending but may also bring about the devaluation of currency and result in inflation.

Going by how the Federal Reserve funds rate adjustments have been, my gut feeling is that interest rates will be rather stagnant for a while (disclaimer: this is my personal opinion, please do not make any decision based on what i say). I’m going to try out the SOR linked home loan package for one year. Lets see what happens 🙂

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My first post, again

So here i am, almost two years since my last blog entry, starting to write again. Intending to continue posting where i left off, i discovered, to my horror, that my blog has been hijacked. It was probably during the time when google took over blogspot that someone with a google account was somehow able to pretend to own my blog. It is interesting to note that the blog entries that were added later probably came from some kind of bot. I figure i will just start over again, this time hosting it myself. Welcome to!

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