I took up a mortgage in 2011, with the effective interest rate being the one-month Singapore Interbank Offered Rate (SIBOR) plus 0.68 per cent for the first year and thereafter, as well as a minimum interest rate of 0.8 per cent.
The bank’s facility letter also stated: “Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions. The bank will not be giving advance notice to the borrower for any changes.”
Now, I have been informed that my mortgage interest rate “will be revised to one-month SIBOR plus 0.85 per cent” after March 31.
While I understand that my mortgage interest rate would be subject to SIBOR changes, this move by the bank seems contrary to the agreement in the facility letter.
The question for the Monetary Authority of Singapore is whether banks are allowed to adjust their margin at their total discretion.
Also, can such a clause as “the bank will not be giving advance notice to the borrower for any changes” in the interest rate be legally imposed by a financial institution?
The bank’s facility letter also stated: “Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions. The bank will not be giving advance notice to the borrower for any changes.”
Now, I have been informed that my mortgage interest rate “will be revised to one-month SIBOR plus 0.85 per cent” after March 31.
While I understand that my mortgage interest rate would be subject to SIBOR changes, this move by the bank seems contrary to the agreement in the facility letter.
The question for the Monetary Authority of Singapore is whether banks are allowed to adjust their margin at their total discretion.
Also, can such a clause as “the bank will not be giving advance notice to the borrower for any changes” in the interest rate be legally imposed by a financial institution?
