A slight disappointment this week, my 3 month SOR pegged home loan repricing kicked in on 2nd Dec rather than 1st Dec as i thought was going to be the case. That meant the SOR rate was 0.98% instead of 0.8% that i had hoped for. Nevertheless, my SOR pegged home loan rate was slashed from 1.86% to 1.63%.
Lesson learned: the repricing date for SOR or Sibor pegged loans is always exactly 3 months after the previous repricing date. Since the previous round of repricing took place on 2nd Sep, the date for the current round has to be 2nd Dec, unless 2nd Dec falls on a weekend (which it doesn’t) in which case the repricing date will fall on the next working day. So if your SOR or Sibor pegged home loan began on the 1st of the month, you may see subsequent repricing date pushed to later days in the month as time goes by.
In the past week, SOR and Sibor have been steadily rising, and one wonders, how does this correlate with the interest rate cuts implemented by central banks worldwide? Going by the two determinant factors of SOR – USD interest rate and USD/SGD exchange rate, and given that USD interest rate is generally trending lower, this could be pointing to current expectations of higher USD/SGD forward exchange rates.
There is another huge trend that is taking place now – the flight to treasuries. More on this later..