SORA has replaced the Singapore Interbank Offered Rate (SIBOR) and Swap Offer Rate (SOR) as the key interest rate benchmark for Singapore dollar (S$) interest rate contracts.

Published by the Monetary Authority of Singapore (MAS) since 1 July 2005, SORA is a robust and transparent benchmark anchored on actual market transactions and underpinned by a deep and liquid overnight interbank funding market. It is determined based on the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank Singapore dollar cash market in Singapore between 8.00am and 6.15pm.

SORA is published as a daily rate and a series of 1-month, 3-month and 6-month compounded rates on the MAS website. The Compounded SORA rates are calculated as the compounded average of daily SORA readings over the relevant 1-month, 3-months or 6-months periods before each publication date, reducing the effects of rate volatility.

A SIBOR-based home loan is one that has interest payments:

• currently based on SIBOR rates (e.g. SIBOR + 0.50%); or

• will be based on SIBOR rates after the current period (e.g. a fixed rate loan of 3.00% for 2 years, and SIBOR + 0.50% after the end of the fixed tenure)

If you are unsure whether your loan is a SIBOR-based home loan, please contact your bank to find out more.

SIBOR home loan borrowers have until 30 April 2024 to switch to a preferred alternative home loan package. As such, you are strongly encouraged to contact your bank early to explore your available options:

• Option 1: Prevailing home loan package offered by your bank

• Option 2: SORA Conversion Package (SCP) at the spot-spread

• Option 3: Wait for automatic conversion to the SCP in June 2024 at the historical median spread

If you do not switch out your SIBOR-based home loan to an alternative loan package by 30 April 2024, your bank will automatically convert it to the SCP at the historical median spread in June 2024 (i.e. Option 3), approximately six months ahead of SIBOR discontinuation at end-2024.

The six-month period is to allow time for an orderly transition out of SIBOR loans by banks and customers, given the large number of outstanding SIBOR loan contracts, and to ensure that all outstanding SIBOR loans are converted before SIBOR is discontinued.

Banks are offering customers with existing SIBOR home loans a switch to the SCP at no additional fees and no additional lock-in period.

The SCP seeks to directly convert your existing SIBOR-based loan to a SORA-based loan. The key components of the SCP are:

• Your existing SIBOR loan margin will remain unchanged;

• 3-month Compounded SORA is a floating interest rate benchmark published by MAS;

• Adjustment Spread will be added to account for the difference between SIBOR and 3-month compounded SORA.

For more information, please refer to FAQs and/or the letter sent by your bank, and contact your bank to find out more.

The financing needs and preferences would differ among homeowners. As such, you are strongly encouraged to contact your bank early to discuss your options which are tailored to you.

There are no fees for switching out of your SIBOR-based loan to the SCP or any prevailing packages offered by your bank.

However, fees may apply according to the terms of your existing loan package should you decide to refinance your loan with another financial institution. Reaching out to your bank early will furnish more time for you to assess your options and understand any terms and conditions that may apply.

If you take up the SCP, you may still switch once on or before 31 December 2024, from the SCP to a prevailing loan package offered by your bank, at no administrative fee.