In recent news, there was a report about banks experiencing an increase in the number of home loan refinancing applications. This was because banks have lowered their interest rates on loans that are pegged to the Singapore Inter-Bank Offered Rate (SIBOR).
SIBOR is the rate at which banks borrow from one another and because of the coronavirus pandemic disrupting the global economy, it has been trending downwards in recent months.
While my mortgage loan with DBS is pegged to the bank’s fixed deposit interest rate, I was interested to find out if DBS has any new promotions for mortgage loan repricing.
Repricing is switching your mortgage loan to a new package within the same bank, while refinancing home loan is switching your mortgage loan for another at a different bank. It is cheaper to reprice than to refinance, especially when there’s no revaluation of the property as there are cost savings on the legal and valuation fees.