Three-month compounded Sora crosses 3% for the first time since 2007

THE three-month compounded Singapore Overnight Rate Average (Sora) rate, which is pegged to most floating home loan packages in Singapore, has passed the 3 per cent mark for the first time since 2007.

The 3M Sora now stands at 3.0095 per cent, according to rates published on Monday (Dec 5).

This means a homeowner paying 3.4 per cent per annum in interest for a UOB floating home loan package two weeks ago would now have to pay 3.7 per cent.

Sora, which is the volume-weighted average borrowing rate in Singapore’s unsecured overnight interbank cash market, has been administered by the Monetary Authority of Singapore (MAS) since 2005.

It is on track to replace the Singapore dollar Swap Offer Rate (SOR) as the main interest rate benchmark in Singapore’s financial markets.

Data compiled by The Business Times, showed at least seven banks in Singapore offering floating home loan packages based on the three-month compounded Sora rates as at Nov 18.

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Meanwhile, the one-month compounded Sora crossed the 3 per cent mark as at the Oct 19 publication date. Several banks like RHB and HSBC offer floating home loan packages pegged to one-month compounded Sora rates.