Act now and switch from SIBOR (Standard Interest Rate) to SORA prior to the deadline on April 30 so that you have more time to select the right home loan

Talk to your bank as quickly as you can to identify a package that suits your requirements, whether it is a fixed rate loan, floater or SORA Conversion Program.

Sophia Tan, a finance professional (not her actual name) along with her sister took out a new mortgage for their three-bedroom condo at the end last year.

They had previously been on an adjustable-rate home loan that was based on the Singapore Interbank Offered Rate (SIBOR) but switched after their bank told them SIBOR would be canceled after Dec 31, 2024.

After talking to their bank’s repricing home loan specialist and options, the sisters settled on a two-year fixed-rate home loan that was 3 percent per year. Because the need to revise their loan with their bank arose due to the imminent end of SIBOR, they did not have to pay the usual repricing costs nor did they need any change in their Total Debt Service Ratio (TDSR) and Loan-To-Value (LTV), and Mortgage Servicing Ratio (MSR) requirements.

“The entire process was simple and hassle-free,” says Ms Tan. It took us two weeks to finish the entire procedure. The process included an initial conversation with the repricing of home loans expert at the bank, the consideration of our options, and finally the final repricing.

“And as our relevant details were already with the bank, the specialist was able to calculate the math and simulate monthly repayments for the various loans for us at home.”

Ms. Tan is among over 70,000 homeowners who have taken the active steps to switch out of their loans based on SIBOR ahead of the discontinuation of SIBOR at the end of this year. Nearly 50,000 homeowners are still waiting to make the change. It is strongly recommended that they contact their bank before the end of April this year in order to fully comprehend their options and ensure a smooth transfer.

Transition to SIBOR and SORA

  • In 2020, the elimination of SIBOR (an interest rate derived using estimates given to banks) started. This follows the global trend toward benchmarks that make use of actual transactions to calculate their rates.
  • SORA (Singapore Overnight Rate Average) is the benchmark rate of interest that Singapore banks use today to determine the cost of floating-rate loans. The amount that banks charge each other to borrow money and then return it the following day is used as the basis to calculate the SORA.
  • Singapore banks will not offer new SIBOR based housing loans until the end of October in 2021. They are now helping homeowners who have existing SIBOR based loans switch to an alternative loan. The options for clients are the SORA Conversion Package as well as other floating rate plans, fixed rate packages and hybrid loan options.
  • Banks wrote letters to homeowners in the affected areas between August 2023 and late January 2024.


Find out more about: The LakeGarden Residences Pricing


There are many options available before April 30.

The homeowners affected who go to their banks before the end of April will be allowed to select from a selection of loan options, which includes the SORA Conversion Package, which is designed to minimize the impact of home loan borrowers’ all-in loan payment at the point at which the loan is converted.

The Singapore Overnight Rate average (SORA) is the benchmark interest rate that Singapore banks use today for pricing floating rate loans. The Monetary Authority of Singapore publishes SORA on its website each day along with the average SORA multiplied over the past three, one, and six months, which is more stable than daily figures. The 3-month Compounded SORA is the most widely used standard rate of reference for floating-rate home loan packages provided by banks in Singapore.

Customers will not incur any fees for switching so long as they are with the same bank.

“If we hadn’t taken any action this year, we would not have realized that repricing to a different home loan could lead to lower monthly instalments. A small amount can go a long way and I’m happy we started early,” Ms Tan says noting that the 3 per cent interest rate she’s currently paying is less than the 3 month Compounded SORA rate at that time.

“The certainty of fixed monthly mortgage payments gives us peace of mind, and the shorter lock-in period gives us some flexibility as we can consider repricing again in two years’ time,” she adds.

What happens if I don’t change my SIBOR-based mortgage by the 30th April in 2024?

  • Starting June 1, homeowners who do not contact their bank before April 30 will automatically be able to have their loan transformed to the SORA conversion package.
  • In the months prior to the 31st of December. 31, 2024, homeowners whose loans are automatically converted to SORA Conversion Packages can switch at no cost to any current plan provided by their bank.

Act quickly

Mrs Ong-Ang Ai Boon, director of The Association of Banks in Singapore (ABS), says borrowers of SIBOR-based home loans should speak with their banks and think about the various options as soon as they are able, just as Ms Tan as well as her sister had done.

Borrowers should contact their bank proactively, especially when mortgage payments constitute a large part of their monthly expenses.

“The end of SIBOR offers borrowers of SIBOR-based home loans to look at an alternative loan program without paying any fees,” she adds.

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