The OCBC 90-day SORA home loan is available to buyers with completed private properties, at a minimum loan size of $1 million.
SORA is a backward-looking overnight rate as compared to a forward-looking reference rate commonly used for floating home loan packages in Singapore, such as Singapore Interbank Offered Rate (SIBOR) where the interest rate is determined at the start of the interest period.
Unlike the three-month SIBOR home loan package, where rates are reviewed every three months, and instalments to increase or decrease depending on the rates, rates are calculated based on the simple average of the daily SORA rates over the past 90 calendar days.
At the start of every interest period - customers are given advance notice of the SORA-based interest rate to be paid for the coming month.
See also: OCBC chairman says bank's 'one in 10 event' stress test meets market challenges
The loan package has a one-year lock-in period, where customers can opt to switch for another home loan package after the year-long period is up.
“With this launch, we are offering a more comprehensive range of home loan options. As this product is the first-of-its-kind in the market, we would like to give customers the opportunity to discover more about this product, and to better understand SORA as a new reference interest rate,” says Sunny Quek, head of consumer financial services Singapore, at OCBC Bank.
Shares in OCBC Bank closed 6 cents lower, or 0.6% down, at $9.19 on Monday.
