Bank of China home loan interest rates
Bank of China was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China in service today. From its establishment until 1942, it was one of the authorised institutions to issue banknotes on behalf of the Chinese Government, and initially functioning as the central bank of China. Since 1928, the BOC became a purely commercial bank with its headquarters now in Beijing. As of 2009, BOC is the 5th largest bank in the world by market capitalization value. Locally, it holds over 70 years of experience serving the Singapore community. While it does have a personal banking segment, its core business remains to be in the corporate banking sector, providing expertise and specialising in China-related trade financing and settlements, and remittance services.
The mortgage loans from Bank of China are applicable for private properties as well as HDB and Executive Condominiums. The packages are based on 3 month Sibor or 3 month SOR rate and a special characteristic of their variable rate packages is that they offer the flexibility to switch between SOR and Sibor rates without any charges for the home owner.
While most of us are already familiar with the Sibor rate, you may want to know more about the SOR rate as it is also a popular benchmark rate that banks here use. SOR represents the Swap offer rate, which is fixed by the Association of Banks in Singapore. It represents the average cost of funds used by banks in Singapore for commercial lending. There are usually a few different SIBOR and SOR options available. You have 1 month, 3 month, 6 month, 9 month and 12 month SIBOR and SOR Rates respectively. Generally, longer term rates are higher than the shorter term rates but are less volatile. Some borrowers may prefer this option as it gives them more certainty to the rates and allow them to plan out their finance in a more predictable manner. For instance, 1 month SIBOR could be at 0.4%, and 12 month SIBOR could be at 1.2%. The best option between stability and lower rates is perhaps the 3-month SIBOR or 3-month SOR option.
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