Retirement Savings + CPF Life (+ Inflation + Bequest) Calculator Online

In my previous post, I had made demonstrated how to use my online calculator, which you can find it here:
    http://make-money-secrets.blogspot.sg/p/retirement-savings-online-calculator.html
to calculate how much you need to have saved by the time you retire.

I had illustrated for this example using my online calculator, where you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  6000
Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01
Number of years you would like to make monthly withdrawals:  35 

Then, you can click on “Calculate” and the online calculator will give you the output as:
This is how much you need to have saved by the time you retire ($):   $2,125,506.18

I had concluded that: “So in conclusion, if a couple is able to accumulate $2.12 Millions dollars, they would be able to retire at 50 years old with pretty comfortable life-style!
Note that I have not taken CPF Life payout (starting at 65 years old) into account, so in practise a couple need less than $2.12M to retire comfortably if you take into consideration that they will be receiving $1300 pm for man and $1200 pm for women starting from the age of 65 years old!”

Ok, so the issue here is now regarding CPF Life payout.
I have friends enquiring about whether I can also factor CPF Life payout into account in my retirement savings calculator, since CPF Life (which is a form of life-time annuity scheme) is now part and parcel of every retirees in Singapore!

I am glad to say that I had managed to include not only CPF Life payout but also effect of inflation and also considering bequest (i.e. the amount you want to leave to your heirs) into my Retirement Savings online calculator!  You can access my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator here:
    https://make-money-secrets.blogspot.sg/p/retirement-savingscpf-life-calculator.html

Let’s just try my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator by keying in the following parameters:


Amount you would like to withdraw each month in retirement ($): 6,000.00
Annual Interest Rate you expect to earn on your savings (eg key in "3" for 3%): 1.0
Age you would like to retire (Years Old): 50
Amount you want to leave to your heirs (bequest) ($): 0.00
Annual living Inflation Rate you expect (eg key in "2" for 2%): 1.0
CPF Life Payout Amount per mth ($): 2,500.00
CPF Life Payout starting Age (Years Old): 65
Age you expect to live until (Years Old): 85

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire (before inflation) ($): Calc.  
$1,525,506.18
This is how much you need to have saved by the time you retire (inflation-adjusted) ($): Calc.  
$2,064,000.00

So, we can see that in order for a couple to retire at 50 years old and to have $6000 per month for retirement (for both’s expenses), you need to save $1.525M (before inflation) and if you factor in inflation (assuming just 1%), you would need to save $1.920M!

Note that I had made following assumptions:
• Assume that both the couple retiring at 50 years old will live only till 85 years old.
• Assume that CPF Life payout for the couple is $2500 per month (being $1300 pm for men and $1200 pm for women if both have the Full Retirement Sum of $161,000 at 55 years old) and that these figures (hopefully) will not be lowered in future.
• Assume that inflation is only 1% (which is on the low side, a more realistic figure should be 2% as used in CPF Escalating Payout plan).
• Assume that the interest/return you would get for your pot of savings to have an average of 1% (which is also on the low side, and I think a more realistic figure can be 2% and above if you have >$1M to invest).

You can play around and change the parameters to those values that suit your situation and you can then plan your own retirement!

With my Retirement Savings + CPF Life (+ Inflation + Bequest) Online Calculator, now you can plan your own finances independently without needing the help of financial planners! (Beware of financial planners! – because some are all out to sell their products rather than to help you plan your finances and advise you appropriately for your retirement!)

Again, you can access all the online calculators that I have developed from this web link URL:
    https://make-money-secrets.blogspot.sg/p/my-online-calculators.html

People who are doing useful/meaningful/important work that benefit the mankind & society have not being paid commensurately

It seem that in the past >10 years, some very unhealthy development has been happening in Singapore, and in many parts of the world.  The development is that:
          "People who are doing useful/meaningful/important work that benefit the mankind & society have not being paid commensurately!"

We are seeing these development when we see that engineers who are doing jobs to repair and maintain the aeroplanes, the MRTs, the buses, developing products that will save life or to help people to have better life etc are being paid a salary that have not increased as much as inflation over the past many years, while people who are doing what we would regard as "useless" jobs are racking in huge incomes, like traders, "pushed" salesmen (trying to sell things to force us to buy when we don't really want or need), and people trying to persuade others to join their MLM companies, and the many middle managers and administrators (don't know have so many layers of "managers" for what?)

E.g., a corporate commodities trader, their job is to hedge against the company's physical commodity prices, yet I heard (from a friend working in commodity firm) that many such traders are really engaged in speculation rather than hedging.

Then there are the "pushed" salesmen getting a big cut of commission when their service are not really needed, like the insurance agents (like "salesmen") selling insurance in Singapore.  This has come to such bad shape that MAS, Singapore Monetary Authority of Singapore (the equivalent of Central Bank in other countries), having to step in and dictate by law that insurance companies must have direct sales channel to their potential customers to cut out these insurance salesmen who are not needed (if these people do not require the insurance agents advise).  I abstract part of the news article as below:
"
People in Singapore will be able to buy certain types of life insurance products directly from insurance companies starting next year, saving on commissions. This is according to the Monetary Authority of Singapore (MAS), which said on Wednesday (July 30) that all insurance companies that serve the retail market will have to offer the following direct purchase products:
(a) Term life insurance products with Total Permanent Disability (TPD) cover;
(b) Whole life insurance products with TPD cover; and
(c) Optional critical illness (CI) rider attached to term life or whole life insurance products.

Consumers who wish to buy direct purchase products will still be subject to underwriting by the insurer, MAS said. "When direct purchase products are introduced in early 2015, they will provide consumers who do not require advice with cheaper access to selected life insurance products," Mr Lee Boon Ngiap, Assistant Managing Director for Capital Markets at MAS, said in a statement. "Consumers will benefit from the greater price competition that will be introduced between the direct and commission-based channels." 
"

Remember the SMRT trains keep breaking down saga?  Why would the trains keep breaking down or keep getting delayed etc? One of the main reason (I heard) was that the engineers in SMRT had previously been treated as people who only “costs” SMRT money, since they only incur costs by maintaining the trains and tracks and equipments etc BUT do not help to bring in REVENUE! As such, they have been treated badly so much so that many knowledgeable, experience and skilful engineers left, which then led to SMRT trains keep breaking down etc while the remaining engineers (who are not as experience, knowledgeable and skilful) are unable to resolve the problems!

Things have become so bad that after that we read on the news such as:
“Government to hire 1,000 engineers this year”… “It will review salaries to match market rates, provide training and leadership grooming”

“Singapore needs more engineers, less short-term planning”

“New rail transformation advisor named amid 'serious refocus' on engineering”

“Engineering focus needed to help get Singapore's tech talent to return home, says PM Lee”

“S'pore 'must value engineers the way Silicon Valley does'”

However, the most important question the Government and companies (especially Government Statutory Boards and GLCs) have to ask themselves is this:
If you can’t even keep your existing tech talent (like those of SMRT knowledgeable and experienced engineers), then what makes you think you can persuade tech talent currently living and working overseas to come back to Singapore?

Retirement Savings Calculator Online - How much do you need to save before you can retire?

Ever thought of retiring early? (Yes, early, like at 50 years old, and not at 65 years old!)

Ever wonder how much you need to have before you can retire?

Have you started planning and figuring out what is the total amount of savings you will need before you can retire?

As a general guide, in order to calculate how much total amount of savings you will need before you can retire, you need to have an idea of how much you need to spend per month during retirement. Also, you would need to estimate how many years you will spend in retirement before you pass away and how much your accumulated capital can still grow while they are being draw-down.

In my previous post, as can be seen here,

http://make-money-secrets.blogspot.sg/2014/11/estimated-cost-of-basic-living-in.html

I estimated that a very basic no frail cost of living in Singapore for a couple would be about $1,348.00 per month, or $674 per person per month (I assume rental costs to be $0 because I assume the couple has a fully paid property).  

I have made available a “Retirement Savings Online Calculator“ here:

http://make-money-secrets.blogspot.sg/p/retirement-savings-online-calculator.html

where you can calculate how much total amount of savings you will need before you can afford to retire.

 Let’s start again with the couple who can survive with very basic no frail cost of living in Singapore for just $1,348.00 per month, so how much would the couple need if they wish to retire at 50 years old?

Ok, using my online calculator, you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  1348

Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01

Number of years you would like to make monthly withdrawals:    35 

 

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire ($):   $477,530.39 

So in conclusion, the couple would need about $477 Thousand dollars to be able to retire at 50 years old for a basic no frail cost of living!

Note that in the above, for erring on the safe side, I assume:

(a)    The interest rate you would expect to earn on your savings to be just 1% (something like just fixed deposit interest rate).

(b)    The age by which the last of the couple can live till passing away to be 85 years old (since average age of man is only 80 while average age of woman is 85), so the “Number of years you would like to make monthly withdrawals” = 85 – 50 = 35.

Next, let’s calculate for another scenario, this is the one which most Singaporeans would like to have, a comfortable retirement (not luxury) life-style which most Singaporeans would deem to be pretty good enough for them!

According to Singapore’s household income statistics 2014 (from http://www.singstat.gov.sg/), your household would be top 20% earners if your household income is about $14500 and above.

Also, according to Singapore’s household expenditure statistics 2013, household with that kind of income spends on average about $7000 per month. However, this $7000 pm figure includes spendings on kids and/or parents, so I would say a figure of $6000 per month for the couple’s retirement would allow them to maintain their comfortable life-style.

Ok, using my online calculator again, you need to key in the following:

Amount you would like to withdraw each month in retirement ($):  6000

Annual Interest Rate you expect to earn on savings (in dec., eg 0.03 for 3%):  0.01

Number of years you would like to make monthly withdrawals:  35 

 

Then, you can click on “Calculate” and the online calculator will give you the output as:

This is how much you need to have saved by the time you retire ($):   $2,125,506.18

So in conclusion, if a couple is able to accumulate $2.12 Millions dollars, they would be able to retire at 50 years old with pretty comfortable life-style!

Note that I have not taken CPF Life payout (starting at 65 years old) into account, so in practise a couple need less than $2.12M to retire comfortably if you take into consideration that they will be receiving $1300 pm for man and $1200 pm for women starting from the age of 65 years old!

Also, for somebody who has $2.12M, they can afford to invest diversely and probably can get much better return than 1% from fixed deposit!

I have also made available some other online calculators which you may find them useful, and you can access them at this webpage:

http://make-money-secrets.blogspot.sg/p/my-online-calculators.html

Can Citibank unilaterally increase SIBOR loan’s spread? (8) – Citibank goes scot-free, because MAS and CASE unable/unwilling to do anything

The afore-mentioned case regarding Citibank unilaterally increase SIBOR loan’s spread is interesting indeed!  Is this even allowed?

According to the news, there are Citibank’s customers whose property loan contract agreement has agreed term stating that their loan interest is “SIBOR + 0.70%”.  However, now Citibank has unilaterally changed the property loan interest they charge to “SIBOR + 0.85%”, thus increasing the fixed spread rate by 0.15%, and thereby dishonouring the agreed term (“SIBOR + 0.70%”) in the main contract agreement!

Let’s Look at the most crucial terms of the Citibank’s loan mortgage agreement again:

"
(d) Contractual period 1 (for 1st year from date of disbursement) - 3 mths Sibor + 0.7%
Contractual period 2 (Thereafter) - 3 mths Sibor + 0.7%

(e) The minimum effective interest rate shall be 0.8% p.a.. 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 notices to the Borrower for any changes in the interest rate.
"

Does the wordings above state that Citibank can unilaterally change the “0.7%”, which is a fixed number in the mortgage loan agreement, to anything else they like? (Note that the 0.7% is usually also known as the “spread”).
I don’t think so!

However, some people believed that Citibank is actually unilaterally invoking their “catch-all” clauses in their “Terms and Conditions” to change the property loan interest they charge “SIBOR + 0.85%”, thus increasing the rate by 0.15%, and thereby dishonouring the agreed term (“SIBOR + 0.70%”) in the main contract agreement!

If this the case, it doesn’t look fair-play to me too, considering that the main contract agreement is what had been agreed by the bank, and few consumers will look through their accompanying terms and conditions documents that run for 10-15 pages that are super wordy, in very small fonts (old people can’t even read them!), and written so cryptically and full of legal jargons and catch-all phrases that there will always be some clauses in these Terms and Conditions that contradict the main contract agreement!

Because of this news, I went to take a look at my property loan main agreement and when I looked at the bank’s “Terms and Conditions” document, I shook my head!  It runs for something like more than 10 pages in super small fonts and I feel that my eyes are very painful to read them, not to mention that they are so general and ambiguous (to me at least) and catch-all for the banks that the banks practically can interpret in any way to their advantage!

After so many complaints and big hoo ha, what is the final update?

Well, at the end of the day, it seems that there it goes, Citibank goes scot-free (because MAS and CASE who are supposed to be helping their citizens (from unfair financial dealings) and consumers (who are supposed to fight to protect consumers against unfair trades under “Consumer Protection Fair Trade Act”) said they are unable to do anything about it)!

Really??? MAS cannot do anything to banks under their supervision even if they engage in unfair trading practise and dishonour their contractual agreement???

Can Citibank unilaterally increase SIBOR loan’s spread? (7) – Citibank engaged in unfair practise? Netizens' demolition of Citibank’s justification...

And more pointing out that Citibank is believed to have engaged in unfair practise against consumers:

“

http://singaporelegaladvice.com/unfair-contract-terms-act-ucta-in-singapore/

Contractual liability – Section 3 of UCTA

In the case of a consumer dealing with a business entity, if the transaction is entered into using the latter’s standard form (for instance, when you sign up with a telco on their standard contract), section 3 applies. This section disallows the business from using its standard contractual terms to: 

• Exclude its own liability for breaches of terms;
• Excluding or limiting its own liability for breaches of terms, and
• Relying on a term to render a different kind of service from that which was reasonably expected of him, or not service at all,

unless the standard contractual term is reasonable. Once again, reasonableness rears its amorphous head!

"

"

Is Citibank term/action "reasonably"? I believe that is also implicitly in the reply from MAS on this issue.

Citibank did not explain, just says the term in the contract. Is this term "unfair"?

“

And more comments that point to loophole in Citibank’s argument they have right raise the loan spread unilaterally: 

“

That was already mentioned in the news

"Mr Peng said all the terms and conditions have been carefully outlined and that interest-rate definitions are clearly stated.

He encouraged affected customers to contact the bank, adding that any decision they make regarding their loans will not be bound by any penalty or fees."

My 2cents:

There is a clause in the Citibank Main Contract.

"The Citibank Home Saver Terms and Conditions annexed hereto shall apply. In the event of any inconsistency between the terms herein and that set out in the Citibank Home Saver Terms and Conditions, the terms herein shall prevail."

What does that mean? it means The Main Contract will override the Annex if there is any inconsistency.

So Citibank cannot be relying on the catch-all clause in the T&C (the Annex) to change the spread because the Main Contract already specify the spread. Catch-all clause also no use if inconsistent with Main Contract.

Remember this: Main Contract will override the Annex if there is any inconsistency.

To change the spread, Citibank need to rely on the Main Contract, and not on the Annex.

The clause citibank are using is in 1(e) The minimum Effective Interest Rate shall be 0.80% pa. 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 in the interest rates.

Now there are 2 terms: "Interest rate" and "Effective Interest Rate" used in Clause 1(e)

Definition of "Effective Interest Rate" is 1 month SIBOR rate for the relevant Interest Period plus 0.65%

What then is the definition of interest rates?

The nearest definition comes to:

"The actual monthly payment shall be computed based on the Effective Interest Rate set out below and may vary depending on amongst other factors the prevailing interest rate, outstanding principal and remaining tenor of the Credit Facilities. The interest rate quoted to you is benchmarked against the Singapore Interbank Offered Rate ("SIBOR") and is accordingly subject to any fluctuations in SIBOR rate. Please note that the Bank is not required to give advance notice of the SIBOR rate which are applicable to the Term Loan."

Do you see how the the last sentences in Clause 1(e) and the above paragraph are similar.

Clause 1(e): The Bank will not be giving advance notice to the Borrower for any changes in the interest rates.

Above paragraph: Please note that the Bank is not required to give advance notice of the SIBOR rate which are applicable to the Term Loan.

Now do we have the definition of what is "Interest rate" ? 

The case to be made is that "interest rate" quoted in Clause 1(e) is that it is the 1 month SIBOR rate and NOT the spread.

so clause 1(e) can read as: 

1(e) The minimum Effective Interest Rate shall be 0.80% pa. Interest rates/(1month SIBOR rate) 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 in the interest rates/(1month SIBOR rate).

If you demolish 1(e), there is less wriggle room for citibank to change spread.

Come to think of it, which is why perhaps they are relying on word games, like:

"Mr Peng Chun Hsien, Citibank Singapore's head of secured finance solutions, also stressed that the "current revision is only applicable to clients outside the lock-in period".

"Mr Peng told The Straits Times: "The word 'throughout' is a term the industry uses, and refers to the tenure and period that we are covering."

"Finance industry experts say reviewing spreads is standard bank practice, but in practice, changing the spread during the loan period is uncommon."

to AMK and the rest affected, 

1) please check with your friend's contract are similar to mine, i also have citibank letter of offer 

2) please ask your friend to ask the banker to point out which clause they are using to change spread. This is very important. Insist on finding out which clause. Take no shit for an answer.

3) remember, in any consistency, Main Contract overrides Annex (T&C) if there is such a clause in your friend's contract.

 “

“

again, there are 2 terms used "Effective interest rates" and "interest rates" used in contract.

"effective interest rates" is NOT EQUAL to "interest rates"!

from the para

"The actual monthly payment shall be computed based on the Effective Interest Rate set out below and may vary depending on amongst other factors the prevailing interest rate, outstanding principal and remaining tenor of the Credit Facilities. The interest rate quoted to you is benchmarked against the Singapore Interbank Offered Rate ("SIBOR") and is accordingly subject to any fluctuations in SIBOR rate. Please note that the Bank is not required to give advance notice of the SIBOR rate which are applicable to the Term Loan."

clause 1(d) already have formula for Effective Interest Rate

Effective Interest Rate = 1 month SIBOR rate for the relevant Interest Period plus 0.65%.

if they wanted to use clause 1(e) as basis for change:

it should have read as

1(e) The minimum Effective Interest Rate shall be 0.80% pa. Effective 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 in the Effective Interest Rates.

If the bank has used the above terms instead, then i think citibank has all the rights in the world. unfortunately it omits the word Effective.

What mortgagees are paying is the Effective Interest Rate, and not the Interest Rate. Dont mixed up the 2 terms.

and formulation of "effective interest rate" is in clause 1(d) (mentioned above)

once again, like a broken tape recorder, those affected please ask the bank(er) to point out which clause they invoke to change the spread.

“

And more stinging comments again:

“

The way I see it is that Citibank is playing with words, and is oppressively trying to mislead their clients into believing they have the right to raise the spread unilaterally. There is clear violation of CPFTA, yet CASE and MAS are both not doing anything!

“

And finally the most important question to force Citibank to answer directly (which Citibank seems determined to be vague and beating around the bush without telling which clause they justify to hike the SIBOR loan’s spread):

“

1) I don't believe Citibank has right to hike the spread. You may want Citibank to point out which clause in your Mortgage Loan Contract they uses to justify to hike the spread.

“

And a latter update at the forum:

“

an update on this story. 

to hopeful: according to my friend, yes, Citi insists that "interest rate subjected to change" is the one that allows them to change the spread. I dun know if he will use your argument to play with words with them. but he is already doing refinance now so he doesn't care much now.

He gave me the MAS email details. You all can write to MAS directly: consumers@mas.gov.sg, attention Chan Wei Sze who is the "case officer". (I did. This is public interest. )

to gavan: collective loan deal is not doable. each one has his own relationship and preference for a bank. these are not homogeneous "fungible" products. the real issue here should be to get MAS to "deal with" Citibank, for everybody's interest.

Btw I'm actually quite surprised no ST Forum articles on this subject appeared. I am sure many ppl wrote to Forum. If Today can publish, why not Straits Times ?

“

“

It is a pity. Personally  i think citibank has a rather weak case (not that i am a legal eagle). since mortgagee is paying "effective interest rate" rather than "interest rate" and formula for "effective interest rate" is already well defined as 1 month SIBOR + 0.65%.

And what is 0.65%? Is it "Interest rate"? That is highly questionable.

as mentioned earlier, the only definition of "interest rate" in LOI is:

"The interest rate quoted to you is benchmarked against the Singapore Interbank Offered Rate ("SIBOR") and is accordingly subject to any fluctuations in SIBOR rate".

so 0.65% is not the "interest rate". 

SIBOR rate is the "interest rate" and are subject to change (ie subject to any fluctuations in SIBOR rate), not the 0.65%.

“

“

if you look at what hopeful posted right above, Mr Peng's argument is weak, and is pushing the limits of interpretation. This is just despicable. 

look at the posted doc here http://forums.hardwarezone.com.sg/eat-drink-man-woman-16/breaking-banks-changing-terms-existing-property-loan-4984471.html, the "Thereafter" spread is clearly a fixed number.

If Citi insist he never meant to sell it as throughout spread, then Citi would have been doing a deliberate and intentional mis-selling in 2011. That sounds very illegal to me.

(It's a different matter if Citi said, "at the time we did intend to sell it as throughout, but today business change, and I INVOKE MY CATCHALL CLAUSE to rescind it". For that we are back to the real issue why banks are allowed to have such clauses.)

As hopeful pointed out, Citi clearly try not to say " under T&C I can change anyway", but instead say "the main contract already allows me to change, you never read your problem". never mind pushing the limit of word playing game.

hopeful, my friend is not as cynical as you think. he is not arguing with Citi anymore because he is afraid he would be blacklisted by the bank as he has other business with Citi. Since he can refinance out, he said just move on.

To me MAS is the party that should take on Citi. MAS has all the details, and MAS is not afraid of "offending" a bank on *consumer loans*. This is why I urge every one to write to MAS directly. No need to be a freerider as it is of no cost to you.

“

“

The rule of the game is to get an OFFICIAL reply from Citibank (in black and white) on which clause they specifically use to change the spread (don't take verbal reply)!

"

“

my friend got a letter by post telling him it is that clause ("interest rate subjected to change"). it's very official.

“

“

As hopeful said, and I agreed, that fixed figure say "0.60%" cannot be the "interest rate" that they referred to that they can change, since SIBOR is the actual interest rate that can change, so if they insist that that particular clause refers to "0.60%" which they can change rather than SIBOR (which almost all of us will interpret as such), then it is obviously a very weak argument. A fixed spread is a fixed margin, their profit margin, it is not an "interest rate"! Citibank want to bullshit who???????

“

Can Citibank unilaterally increase SIBOR loan’s spread? (6) – Tearing down of Citibank’s justification

And more forum discussions and complaints here about People who are affected by Citibank UNILATERALLY changing their SIBOR loan spread:

“

Took up a bank loan back in 2011 where the terms are 0.7% + 3 mths sibor perpetually. The bank just recently "notify" me that going forward, the rate will be 0.85% + 3 mths sibor instead.

Do check your loan carefully. The banks seems to be pulling a stunt on borrowers.

The Tnc as follows (I cut down on some unnecessary wordings which has no impact)

(d)

Contractual period 1 (for 1st year from date of disbursement) - 3 mths Sibor + 0.7%

Contractual period 2 (Thereafter) - 3 mths Sibor + 0.7%

(e) The minimum effective interest rate whall be 0.8% p.a.. 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 notices to the Borrower for any changes in the interest rate

They are saying that even if they decide to change the spread to 10% or even 100% tomorrow, they can still do it.

Edit: Will be writing in to MAS and ABS on this matter. For those affected person, please PM me and see how we can submit a joint petition letter. In particular, on clause (e):

It is interesting to note that the second sentence "Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions." does not refer to Citibank at all. Thus, reading strictly by the rule, Citibank does not have the right to change the interest rate. The interest rate that will be changed is referring to Sibor.

Please see the images on the flyer and the loan agreement. there are other supporting documents which I will not be uploading at this point of time.

“

The housing/mortgage loan in question appears to be “Citibank Home Saver” which is a SIBOR-pegged loan with fixed spread of 0.65% or 0.70% (as in above scanned page).

And more comments by forumers: 

“

“Quote Originally Posted by MortgageGuru

borrowers can only blame itself for signing the loan with them when they took up the loan back then.

I'm sorry but you are wrong here. “

You still do not get it: all banks' T&C have rights that allow them to change all rates, whatever the main doc says.

The diff thus far is, only Citibank actually is doing it now.

This practice alone must be condemned. and the public must be educated that banks T&C indeed allow them to do whatever they want.

what teddybear is championing, and I agree, is to force MAS to impose ABS to stop such unfair terms.

"blame yourself for signing the loan" ? There is no option to customers today. At most you say "blame yourself for trusting Citibank".

You are a mortgage broker. You do represent Citi too, do you ? Imagine one day your client tell you "how come you sold me this fixed rate mortgage 2yrs ago now bank say it can change the rate now", and you say "blame yourself for signing the loan" ?

You did not see the severity of this situation. This is a precedence that should really be prominently flashed out and stopped.

“

And more stings that seems to make sense: 

“

Wah, such general overtly one-sided unfair clause that allows the bank the right to do anything single-sided unilaterally, that I think Singapore is the only so-called developed country where the monetary authority allows the bank to insert such clause in their so-called Terms & Conditions (that their clients don't even sign and agreed to) and then enforce them on their clients!

Asking their clients to accept such unfair treatment to the total disregard that the mortgage loan agreement (the actual agreement signed by both parties) clearly states "SIBOR + 0.70%" and then the bank can change the "0.70%" to any figure they like really makes a fool of Singaporeans! 

It is time that Singaporeans wish up to such unfair treatment by bullying companies like these banks, and to think that Singapore only has their CPFTA only not too long ago, and it makes a mockery that no government agency even bothers to look into such clearly disregard of CPFTA!!!!!!!!!!!!

And you analogy doesn't even make sense! Don't understand what you mean by "you go into other people's premises, please don't deem yourself as having the rights of anything."???

We are talking about a contract, where almost every bank tried to insert the same aggressively 1-sided clause vaguely, and then point to the clause to say they have the right to do anything anyhow they like (based on their own interpretation)???

“

And more sensible stings on Citibank: 

 “

You raised a very good example about property rental.

Imagine you are the landlord granting renting out the property (like the bank granting the loan), both of you sign a contract, and you only want a contract where you could insert a clause saying that "This tenancy is for 2 fixed years,...,.....the landlord reserves the absolute right to adjust the rental per month from time to time, depending on prevailing market conditions....."???? 

And what choice you are talking about when all banks are resorting to bullying tactic and put the same clauses in the contract? Fair clauses? CPFTA for what? The banks loan contracts/T&Cs violates the following regulations in CPFTA:

* Taking advantage of a consumer by including in an agreement terms or conditions that are harsh, oppressive or excessively one-sided so as to be unconscionable.

“

“

I will rally all Singaporean consumers to be aware of such unfair and oppressive clauses in mortgage loan contract, Citibank UNILATERALLY changing the spread by invoking those unfair oppressive clause, and that they should not VOTE FOR PAP if the MAS / CASE currently under them is NOT GOING TO DO ANYTHING TO PROTECT CONSUMERS LIKE US! Simple as that, understand????

And by the way, you as a mortgage broker, is your fudiciary duty towards the banks you represent or towards the clients you introduce to the banks?

Seems like you have no regard to the oppression of your clients by the banks? Is that because it is the banks that pay you commissions and not your clients? 

“

And more scorns on Citibank:

“

But actually, it is not because the bank's loan clients know about it, it is because the contract is written in such as way as to MISLEAD their clients, and so VAGUELY so as not raise to their clients attention, until the Citibank issue now then we knew about it! In all my life, I never knew that banks can unilaterally change the interest rate figure already agreed upon, because NO bank has started such precedence before, until Citibank now!

Let me challenge Citibank:

If they want to change the spread UNILATERALLY, then they should not mislead their clients, they should just write:

Effective Interest Rate:

Year 3 and thereafter: SIBOR + spread to be determined by the bank who has the absolute right to adjust from time to time depending on prevailing market conditions.

Don't try to write:

Year 3 and thereafter: SIBOR + 0.70%

to mislead people if they are going to change that "0.70%" to any value they like!

“

“

Like I told you, I feel that Citibank's mortgage loan agreement (the main agreement signed by both parties) NEVER explicitly state that they have the right to change the spread!

Let's not argue for the sake of arguing, let's refer to the Citibank's loan agreement:

The contract contains the following (cut out unnecessary wordings which has no impact):

"

(d) Contractual period 1 (for 1st year from date of disbursement) - 3 mths Sibor + 0.7%

Contractual period 2 (Thereafter) - 3 mths Sibor + 0.7%

(e) The minimum effective interest rate shall be 0.8% p.a.. 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 notices to the Borrower for any changes in the interest rate.

"

When I read the above, my interpretation of "Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions" is that since Interest rate = 3mth Sibor + 0.7%, Citibank is just referring to the adjustment is for 3mth Sibor, because "0.7%" is a fixed figure. If they really want to change "0.7%", then the contract should write as:

"Contractual period 2 (Thereafter) - 3mths Sibor + spread to be determined solely at the discretion of the bank and to be adjusted from time to time depending on prevailing market conditions."

See, Citibank is just playing with words now and attempting to mislead, and what I said make more sense than what they tried to force you people to accept,..........

Unless they are saying that they are enforcing based on those small font clauses in their Terms & Conditions document, but heh, those cannot stand up to scrutiny because we never sign the T&C document, not to mention those clauses that are oppressively 1-sided!

“

Can Citibank unilaterally increase SIBOR loan’s spread? (5) – Netizens’ responses

Response from forumers:

“

In response to below letter writer's question:

Borrowers with such SIBOR packages have no recourse and are at the mercy of the bank, making a mockery of a “fixed spread” agreement. Would the Consumers Association of Singapore or any relevant authorities comment on such an unfair practice?

Sorry to tell the below letter writer that as of NOW (that we know so far),

MAS (Monetary Authority of Singapore) is NOT GOING TO DO ANYTHING!

CASE (Consumers Association of Singapore) is NOT GOING TO DO ANYTHING!

You Singaporeans have to go fight with the 800-pound GORILLA bank (who has all the lawyers at their beak and call)!!!!!!!!!!!!!!!!! You have enough money to sue the bank and win them????

Seems like a case of big bully at work????

Are all the letters referring to the same bank - Citibank?

So far, from other news articles, only Citibank had been mentioned as the BANK TO ADJUST THE SIBOR LOAN SPREAD!

“

And response from other forumers:

“

hopeful, teddybear, bargain hunter, and whoever who feel strongly Citi is not doing the right thing, please help to write to Today, StraitsTimes, Zaobao.

for the strait time article, I found the link, the email address of the reporter is there.

http://business.asiaone.com/news/bor...in-sibor-loans

Only a sufficiently large public outcry can bring some attention from MAS. (CASE, forget about CASE, it's toothless).

btw hopeful: it's only after the Lehman case when MAS stipulated what product can be said "Guaranteed" (i.e. needs to be "A" rated, must be 100%, etc), and "capital protected" is forbidden. So MAS can act if it feels necessary. We need MAS to tell ABS to adopt fair mortgage contracts.

“

And then there was also more discussions at another forum:

And stinging comments made against Citibank:

“

Be careful with Citibank housing loan

I thought I was safe to sign up a 1 month sibor+0.6% housing loan with Citibank in 2011 for 25 years not to worrying about keep refinancing every two three years.

Two weeks ago, I received a surprise Citibank letter advising me that they have raised the interest spread to sibor + 0.85%. I wrote to complain about their unilateral move to increase the spread without my consent. They told me that in the loan agreement, there was a fine-print saying that Citibank has the right to increase the spread at their discretion! I was shocked as I never realized that a bank can do that with our housing loan. I hope this is just Citibank and not all banks in Singapore...

Anyway, since I complained, they offered me 2 options: (i) a slight improved rate at sibor +0.75% for 3 years then jumping to sibor +1.1% after OR (ii) stay with their latest increased spread of sibor +0.85% "forever" but they made no commitment that they would not change their spread again in the near future. Any advice on which option I should take or I have better options to refinance out from Citibank?

Be careful if you want to sign up new loans with Citibank...

“