Mortgage FAQs

SIBOR is a key interest rate benchmark in Singapore that is widely used in retail mortgages and corporate loans. In July 2020, the Association Banks of Singapore (ABS), the Singapore Foreign Exchange Market Committee (SFEMC), and the Steering Committee for SOR Transition to SORA (SC-STS) published the report (SIBOR Reform and the Future Landscape of SGD Interest Rate Benchmarks), recommending the discontinuation of SIBOR, and to shift to the use of SORA as the main interest rate benchmark for SGD financial markets.

This shift will support the deepening of SORA markets. It will also provide greater pricing transparency for borrowers and more efficient risk management for lenders. The report assessed that it will be beneficial in the long run for SGD financial markets to shift to a SORA-centered SGD interest rate market. The benefits include avoidance of market fragmentation, facilitating transparency and easier comparison of loan pricing and promoting the development of deep and efficient SGD financial markets.

The Singapore Overnight Rate Average (SORA) is the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8am and 6.15pm. It is computed based on actual transactions performed and meets the standards of international best practice as set out in the IOSCO Principles for Financial Benchmarks. Monetary Authority of Singapore (MAS) is the benchmark administrator and SORA has been published by MAS since 1 July 2005.

You may refer to below link for the key features and calculation methodology of SORA:
https://www.mas.gov.sg/-/media/MAS/SORA/Methodology-document.pdf?la=en&hash=76D9DE4B8FED3DD9661BCCDB47F4A59C29AA0CB1

The Singapore Interbank Offered Rates (SIBOR) is the rate at which an individual Contributor Bank could borrow funds, were it to do so by asking for and then accepting the interbank offers in reasonable market size, just prior to 11:00 a.m. Singapore time. ABS Benchmarks Administration Co. Pte Ltd is the benchmark administrator.

You may refer to the below link for the calculation methodology of the SIBOR:
https://abs.org.sg/docs/library/calculation-methodology-abs-benchmarks.pdf

Summary of the differences between SORA and SIBOR

Source:
The Association of Banks in Singapore (ABS)
Monetary Authority of Singapore (MAS)

Compounded SORA is calculated using the compounded methodology of daily SORA rate. In addition to SORA, the MAS also publishes daily Compounded SORA of 1-month, 3-month and 6-month tenors. The 1-month, 3-month and 6-month Compounded SORA provides reference rates for unsecured interbank SGD transactions in Singapore, compounded over historical 1-month, 3-month and 6-month periods.

You may refer to below links for the historical data of
SIBOR: https://abs.org.sg/benchmark-rates/rates-sibor
Compounded SORA: https://eservices.mas.gov.sg/statistics/dir/DomesticInterestRates.aspx

There is no immediate action required from you. We will contact you in due course to provide more information and guide you through the transition to another alternative rate.

Yes, you can call up our mortgage client care hotline at 6238 8838. Our dedicated Mortgage Client Care team will be able to assist you. Kindly note that all repricing requests are subject to review and approval.

In calculating your maximum home loan amount, the bank will take into account the ratio of your debt to your income. This is called the Total Debt Servicing Ratio (TDSR) and this ratio is capped at 55% of all borrowers' gross monthly income. If you are purchasing a HDB flat, the bank will also have to calculate your Mortgage Servicing Ratio (MSR). MSR is capped at 30% of all borrowers' gross monthly income. Calculation of MSR is based on loan amount and combined monthly gross income.
Calculate how much you can borrow with our home loan calculator > link to calculator page
(https://www.citibank.com.sg/loans/mortgage/mortgage-calculator)

We offer a range of fixed and variable interest rate packages to suit your financing needs. Our variable interest rate packages are pegged to Compounded SORA.

For borrowers who have cash savings and wish to reduce mortgage interest payment while retaining the flexibility of cash flow, the bank also offers the Cash Management Account which contains a mortgage loan interest offset feature. The mortgage loan interest offset feature involves the crediting of a sum derived from applying an adjustment rate to the lower of the credit balances in the borrower's Cash Management Account and the principal amount outstanding on the borrower's home loan to off-set the mortgage loan interest.

For private property purchase, you can have a loan tenure of up to 30 years (or 65 years of age, whichever is earlier). If you would like to extend to 35 years (or 75 years of age, whichever is earlier), the Loan-to-valuation (LTV) will be reduced.

For HDB property purchase, you can have a loan tenure of up to 25 years (or 65 years of age, whichever is earlier). If you would like to extend to 30 years (or 75 years of age, whichever is earlier), the Loan-to-valuation (LTV) will be reduced.

In order to be eligible to get a home loan, the unexpired lease term at the end of the loan tenure must be at least 30 years for private property and 20 years for HDB property.

IPA is an approved loan amount given by the bank based on the credit report and affordability of the borrower. It is not a binding document and is subject to the property valuation and other checks in the application process. An IPA is valid for 60 days from approval date.

Buying a home involves a range of upfront costs that you will need to factor into your budget. Examples of these costs are:

The duration for getting your mortgage loan application approved can be anywhere from 2 working days upwards, depending on the completeness of your documents and complexity of the application.

Bridging loan can be obtained for the required cash down payment for the new property before cash proceeds are received from the sale of the existing property.

All the property owners have an equal interest, regardless of how much each one contributes. Upon the demise of any joint owner, his/her interest would be passed on to the remaining co-owners.

The relationship between the amount of the mortgage loan and the appraised value of the property, expressed as a percentage. A LTV ratio of 75 means that a borrower is borrowing 75% of the value of the property and paying 25% as down payment.

Mortgage done in advance and is signed by the borrower against borrowing before the property title deed is issued. Applies to building under construction ("BUC") projects.

An Option to Purchase is a right or option given by the seller of the property to the buyer to buy the property at a specified price within a specified period of time (the validity period of the option). If the buyer decides to buy the property, he/she has to exercise the Option to Purchase within its validity period by signing the Sale & Purchase Agreement and paying the down-payment. The buyer must pay a booking / option fee for this right or option, which will be forfeited if the Option to Purchase is not exercised within its validity period.

Sale & Purchase Agreement refers to a private contract between the seller and the buyer for the sale and purchase of a property.

A temporary occupancy permit issued to indicate a property development has complied with certain requirements and that homeowners can safely occupy the property.

A certificate issued when the authorities are satisfied that all aspects of the building works have complied with statutory requirements and are built according to the approved building plan. If only certain requisites are complied with, a Temporary Occupation Permit (TOP) may be granted first before finally complying with all requirements and obtaining a CSC.