SAIBOR: Saudi Interbank Offered Rate

SAIBOR - the Saudi Arabian Interbank Offered Rate - is a daily reference rate published by the Saudi Central Bank (SAMA). It represents the average cost at which major Saudi panel banks indicate they can obtain unsecured short-term funding from other banks in the Saudi Riyal interbank market. Rates are submitted by contributing banks at 11:00 am Riyadh time, and the benchmark is calculated as the arithmetic average of those submissions after the two highest and lowest rates are discarded.\n\nSAIBOR serves as the key interbank rate in Saudi Arabia and acts as the benchmark for a wide range of commercial and consumer lending products, including variable-rate mortgages. LSEG (formerly Thomson Reuters) is the official administrator and calculation agent for SAIBOR, a role approved by SAMA in November 2016. SAMA's Rulebook defines SAIBOR formally as an indicative offer rate at which contributor panel banks would be able to borrow unsecured funds in reasonable market size.\n\nNote that SAIBOR is sometimes abbreviated as SIBOR in a Saudi context, but this should not be confused with SIBOR - the Singapore Interbank Offered Rate - which is an entirely separate benchmark for a different market and currency.

For expats taking out a variable-rate home finance product in Saudi Arabia, SAIBOR is the number that drives your monthly payment. Most Sharia-compliant and conventional variable mortgage products in the Kingdom are priced as SAIBOR plus a fixed margin set by the lender. When SAIBOR rises, your repayment rises at the next reset date - typically every three or six months - regardless of whether your income has changed. Always confirm the reset frequency and the applicable SAIBOR tenor (commonly three-month or six-month) before signing any finance agreement.\n\nSAMA oversees both the benchmark itself and the lenders who reference it, so any complaint about how a rate reset has been applied to your mortgage should be directed to SAMA. If you are comparing mortgage offers in Saudi Arabia, the SAIBOR margin - not the headline rate quoted on a single day - is the figure that allows a like-for-like comparison between lenders, since the SAIBOR component will move identically for all of them.