Ask Dr Mortgage: Is Base Rate the same for all banks?


I would like to ask what is the difference between interest rate of 3.84+0.66 and 3.2+1.3 given by different bank

On first glance you will know that both the Effective Lending Rate is 4.5%. What lingers in your mind is which bank should I choose. Both interest rates are the same.

If you look further based on the new interest rate which is called Base Rate (BR) it is not the same for every bank. I can be a different of 1% among banks. You want to know more about Base Rate read at Base Rate Explained


The best answer I can give is to choose the more stable bank. Why? Today, the effective lending rate can be the lowest, it can be the highest next year. You will be paying much more. There are more determining factors in determining the effective lending rate under BR regime as compared to Base Lending rate.

The next question is which is more stable bank

Well you will have to do your research. If you favor this banks more than you choose.

From the desk of

Miichael Yeoh



3 Comments on Ask Dr Mortgage: Is Base Rate the same for all banks?

  1. 30 year fixed mortgage rates // 13/08/2015 at 8:09 am // Reply

    Excellent blog you have got here.. It’s hard to find good quality writing like
    yours these days. I truly appreciate people like
    you! Take care!!

  2. Hi, if the spread is higher, does that mean the risk is higher? Since the spread is fixed.Thanks.

    • The spread is determine by a few factors. The risk of the borrowers is also a determining factor.

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