CIMB Singapore delays mortgage floor rate hike, but customers unmoved

Published Wed, Apr 29, 2020 · 09:50 PM

Singapore

FOLLOWING a pushback from irate customers, CIMB Bank Singapore will delay the start date - to Jan 1, 2021 - of its higher minimum rate for certain mortgages pegged to the Singapore inter-bank offered rate (Sibor) and Swap offer rate (Sor).

The hike in the bank's floor rate was to have taken effect from May 18, 2020, as reported by The Business Times last Saturday.

The bank's move to raise the floor rate raises the broader question of whether floating interest rate contracts provide enough certainty for customers as banks usually have clauses in their terms and conditions that allow them to change rates at their discretion.

CIMB Singapore drew flak from customers last week for raising the floor of its Sibor and Sor rates in its floating rate packages to 0.9 per cent, from 0.1 per cent previously. Most of the mortgage loans sold by CIMB here are linked to the one-month Sibor. But the one-month Sibor rate on April 29 w…