CIMB Singapore scraps mortgage loan hike following customer backlash

CEO Victor Lee expressed his apology to affected customers.

CIMB Singapore announced that it will retain the floor rate of its existing customer mortgage loans tied to the SIBOR/SOR rate at 0.1%.

In a statement, chief executive officer Victor Lee said that the market’s cost of deposits has fallen, which he said allowed CIMB to lower their deposit rates and cost of deposits. This, in turn, enabled the bank to maintain its floor rate at 0.1%.

“We thank our customers for their feedback, and we sincerely apologise for the inconvenience caused,” Lee said in a statement.

On 2 June, Singapore Business Review reported that customers have banded together to challenge the bank’s decision to raise its floor rate from 0.1% to 0.9% beginning 1 January 2021. CIMB Singapore earlier announced that it will raise its floor rate beginning 18 May, but later delayed the start date by almost eight months.

In their website HonestMortgage.sg, the group—which has now risen to more than 100 members—acknowledged CIMB’s apology.

“We accept CIMB's apology. Homeownership is not possible without fair and honest mortgages. We look forward to CIMB reviewing their terms and conditions to ensure their mortgages are indeed honest. Our website HonestMortgages.sg will remain accessible as a learning point for consumers going forward,” the statement read.

Further, CIMB’s Lee said that they are offering their impacted Singapore residential mortgage loan customers either a 2-year fixed rate package of 0.9% or a 3-year fixed rate loan package of 1.10% to mitigate the fluctuations of the volatile interest rates environment, for a limited time.

“This will give our customers peace of mind for the next three years, allowing them to plan their finances accordingly for the immediate three years. We are offering the lowest fixed rates for our existing customers on the SIBOR and SOR packages as of today,” concluded Lee.