Board Rate (BR) or Internal Board Rate (IBR) Loans

  BR or IBR loans revolve around interest rates that the bank sets. For the majority of the time, banks will try and be competitive. They’ll keep the rates close to or potentially below what’s available on the market. Some banks haven’t changed their interest rates in many years, regardless of the rising interest rate environment. In some cases, you can seek out board rates that are far cheaper than what is available on the market.  Unlike the SIBOR rate, the interest rate movements of BRs and IBRs aren’t very transparent. What’s more, they’re also unilaterally controlled by the bank. This can raise rates at any time. Regarding BR loans, they’re all a matter of trust. It boils down to how much you trust your bank not to increase rates and to give you a suitable deal.  For the most part, BR loans should be the last thing you consider taking out. Banks, like any business, are driven by profit margins. Such profit margins are linked to the interest earned from home loan interest rates. When you decide to accept the bank’s rate, they have the ability to increase the home loan interest rates as a ‘business decision’ whenever they like. Unfortunately, this will be at your expense.