3 months or 12 months sibor better?

[beet007]

Hi Dennis, thanks again for taking the time to answer our questions.

I've read that some economists think that the economy may recover faster than some expect and thus the Fed may be forced to raise the interest rate faster than they have planned. In view of such possibility, should we peg the interest rate to 3 months or 12 months sibor for our housing loan? In your knowledge, what's the highest value Sibor has ever reached?

By the way, how do you decide when to sell a property and when to hold long term or for life? The concept you shared about unlocking the excess value of the property by taking another loan to acquire another property is interesting.

[Dennis Ng]

Hi Dennis, thanks again for taking the time to answer our questions.

I've read that some economists think that the economy may recover faster than some expect and thus the Fed may be forced to raise the interest rate faster than they have planned. In view of such possibility, should we peg the interest rate to 3 months or 12 months sibor for our housing loan? In your knowledge, what's the highest value Sibor has ever reached?

By the way, how do you decide when to sell a property and when to hold long term or for life? The concept you shared about unlocking the excess value of the property by taking another loan to acquire another property is interesting.

Hi beet007,
My personal opinion is that interest rates likely to remain low in the next 12 months or so.

With this in mind, I would personally choose the 3 month SIBOR which is about 0.3% lower than 12 months SIBOR.

SIBOR’s highest level in year 2007 was 3.58%, I think in next 2 to 3 years, unlikely to hit the same level, at most about 2% to 2.5% for SIBOR.


Property to hold long term preferably should be freehold as leasehold condos typically loses value after 15 to 20 years. Location is also key. So I would probably only hold properties long term provided it is in a good location and is Freehold. Just my personal opinion.

The concept I shared has been used by many Rich people to acquire more properties without using their own cash (NO money down strategy for subsequent properties), so it is a proven strategy, not theory.

For example, my (office) landlord owns a few commercial buildings in Singapore with value exceeding S$100 million and he started with owning just 1 property about 30 years ago.