For more than 40 years, the London Interbank Offered Rate—commonly known as

Libor—was a key benchmark for setting the interest rates charged on adjustable-rate
loans, mortgages and corporate debt.

Over the last decade, Libor has been burdened by scandals and crises. Effective
December 31, 2021, Libor will no longer be used to issue new loans in the U.S. It is being
replaced by the Secured Overnight Financing Rate (SOFR), which many experts
consider a more accurate and more secure pricing benchmark.
SIBOR rates as of 23 October 2020
1-month SIBOR 0.25000%
3-month SIBOR 0.40532%
6-month SIBOR 0.59300%
1-year SIBOR 0.81200%
Of course, even for SIBOR-pegged home loans, banks aren’t just going to give
you the exact SIBOR rate. They’ll add a spread to it (X%), which is the amount
they’d earn out of lending you money. Banks compete to offer consumers the
best SIBOR home loan rates by adjusting their spread.

Take note that because SIBOR rates change every month, the
monthly interest portion for your home loan will also vary.

(Also, take note that some banks only offer SIBOR rates for private property
home loans.)

Let’s take the example of a 3-month SIBOR home loan rate:

3M SIBOR + X%

3M SIBOR is short for 3-month SIBOR and refers to how often your home
loan rate is refreshed. In this case, it’s every three months.

That means that, every three months, on the first business day of the month,
the bank will check what the latest rate is and update your home loan package
accordingly.

Currently, 3-month SIBOR and 1-month SIBOR home loan packages are the
most common in the industry today.