DBS Bank has launched Singapore’s first SORA-pegged business property mortgage loan, which provides business property owners with additional property financing options and covers all property loan types.
The loan marks another milestone in Singapore’s transition towards the adoption of the Singapore Overnight Rate Average (SORA) as its main interest rate benchmark.
The loan is specially tailored for small and medium-sized enterprises looking to finance their commercial and industrial properties.
The loan, which will be available from September 3, allows SME business property owners to borrow up to 80% of their property value and stretch their repayment tenor to up to 25 years.
Interest rates on the loan will be based on the three-month compounded SORA published by the Monetary Authority of Singapore (MAS), as well as an applicable margin.
“With the bank’s recent launch of various SORA-based products, we have also seen some interest among SME owners in SORA-pegged loans. With the industry moving towards a phased discontinuation of SIBOR and adoption of SORA, we are now giving business property owners the option of taking up a SORA-pegged package ahead of time to save them the hassle of repapering their loans down the road," says Joyce Tee, group head of SME banking at DBS.
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Shares in DBS closed flat at $20.87 on September 2.
