FAQ Retail Transition from SIBOR to SORA

RHB SINGAPORE – Frequently Asked Questions on SIBOR Transition to SORA

1. I currently have a property loan referencing SIBOR. How does the discontinuation of SIBOR affect my property loan?

As SIBOR will be discontinued on 31 December 2024, the switch out of SIBOR loans is necessary to avoid inconvenience to our customers by any possible disruption to your loan when the SIBOR ceases, e.g. interest on the loan cannot be computed.

2. Can I choose not to switch out of my property loan referencing SIBOR? Should I convert now or wait for the SIBOR-SORA Conversion Package (“SIBOR-SCP”)? If I switch out to a prevailing loan package now, will I be able to switch to the SIBOR-SCP to be announced in Q3 2023?

Customers are encouraged to assess from the suite of loan packages available at the point in time which you are ready to switch out from your existing SIBOR retail loan and select one which best meets your needs.

Please note that once you have switched out of your SIBOR-based loan to a prevailing loan package, you will not be able to switch to a SIBOR-SCP. The SIBOR-SCP will only be offered to customers, who at the point of the SIBOR-SCP’s introduction, still have retail loans that are referencing SIBOR.

3. Would I be charged any fees for making a switch now?

As part of the industry-wide initiative to facilitate customers to switch out of their SIBOR-based retail loan early, RHB is offering a one-time fee-free switch to any prevailing packages offered by us from 1 February 2023. This includes waivers of all conversion-related fees, e.g. repricing fees, administrative fees. Please take note that wavier of fees are only applicable to repricing customers.

Specific Scenario FAQ

Scenario                                     

Response
Customer loan is out of lock-in period and not bound by any subsidies
(such as legal or valuation subsidies)
One-time fee-free switch to any prevailing package is provided.
Customer loan is still within subsidies clawback period
e.g. within 3 years from date of loan disbursement.
One-time fee-free switch to any prevailing package is provided.
You need not repay the subsidies received under your current loan by switching to any prevailing packages. However, the clawback period of your subsidies will be carried through to your re-priced loan. If you decide to redeem your loan, the clawback of all subsidies will apply.
If the prevailing loan comes with a separate clawback period (e.g. 3 years), this will run concurrently with the clawback period that was ported over from the SIBOR loan (e.g. 1 year).
Please note that the clawback period is independent of the lock-in period of the new loan, i.e. one does not impact the other.
Customer loan is still within lock-in period subject to redemption fees
e.g. within 3 years from date of loan disbursement.
One-time fee-free switch to any prevailing package is provided.
There will be no prepayment fees charged by switching to any prevailing packages. However, if you decide to redeem your loan, the prepayment fees will apply.
If the prevailing loan comes with a fresh lock-in period (e.g. 3 years), the customer will only be subject to this fresh lock-in period, even if he is still within the lock-in period of his SIBOR loan.
Please note that the clawback period is independent of the lock-in period of the new loan, i.e. one does not impact the other.
Customer loan is still undisbursed/partial disbursed.
One-time fee-free switch to any prevailing package is provided.
There will be no prepayment or cancellation fees charged for this switch.
However, if you decide to redeem your loan, the prepayment fees will apply.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Will I be subject to re-computation of the Total Debt Servicing Ratio (TDSR), Loan-To-Value (LTV), and Mortgage Servicing Ratio (MSR) requirements when I switch from my SIBOR loan to an alternate package offered by the same bank?

As this is an industry-wide exercise, MAS will not require financial institutions to re-compute the TDSR, LTV, and MSR requirements for affected customers (including investment property loan borrowers) making the switch with the same financial institution. This is a one-time exception to facilitate customers’ switch to alternative loan packages offered by each bank.

If you initiate a refinancing of your property loan with another financial institution, you will be subject to the prevailing property loan rules (e.g. TDSR, LTV, and MSR). However, you should check with that financial institution if you are eligible for any of the existing exemptions that are provided. For example, currently, borrowers are exempted from TDSR when refinancing their owner-occupied property loans.

5. Will I be subject to re-computation of TDSR if I switch out to a prevailing loan package and at the same time:

(i) apply for a (new or additional) mortgage withdrawal loan,

(ii) request for the loan tenure to be extended

For request(s) other than the switching out of your SIBOR-based loan to a prevailing loan package, you would be subject to credit assessment and thus, the re-computation of TDSR shall apply. Please inform us if you have requests beyond package switching.

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