LIBOR Transition

May 2023

Effective at the end of June 2023, the London Inter-Bank Offered Rate (LIBOR) reference rate, used to determine the interest rate charged for some adjustable-rate loans will no longer be available. Therefore, lenders must identify a replacement reference rate. This is a necessary change that impacts many loans with variable interest rates—including your adjustable rate mortgage (ARM) and Home Equity Line of Credit (HELOC). 

Congress has determined that replacement reference rates based on the Refinitiv USD IBOR Consumer Cash Fallback (Refinitiv Consumer Index) which are based on the Secured Overnight Financing Rate (SOFR) are comparable to LIBOR. We're working with regulators and consumer advocacy organizations to move existing accounts from LIBOR to the Refinitiv Consumer Index in a way that's fair and transparent.

Other than stated in your notification letter, this new reference rate does not impact any other terms or conditions of your ARM.

The information below may address additional questions you may have:

  • The reference rate used to calculate the variable interest rate of your mortgage or HELOC will change from the London Inter-Bank Offered Rate (LIBOR) to the Refinitiv USD Interbank Offered Rate IBOR Consumer Cash Fallback (Refinitiv Consumer Index), which is based on the Secured Overnight Financing Rate (SOFR). 
  • Following the direction of Congress, most LIBOR-based loans are transitioning to a SOFR-based reference rates. Since selecting a replacement rate is provided for under the terms of your promissory note, this is not a refinance of your mortgage or HELOC; it is merely a change to the benchmark we use to determine your variable interest rate. 
  • At the end of June 2023, when LIBOR is no longer available, the reference rate will change automatically to the Refinitiv Consumer Index, and you should not notice a difference in the way we service your loan. 
  • You aren’t alone. This change impacts millions of borrowers like you, with all lenders across the country.

  • In 2022, Congress passed a law that made SOFR-based reference rates the preferred alternative to LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight—it is comparable to LIBOR. It is collateralized (made secure) by U.S. Treasury securities in the financial market.  

  • You do not need to do anything related to this change. Additionally, other than is stated in your notification letter, no other terms of your mortgage or HELOC are changing. We will handle the transition for you.
  • The new Refinitiv Consumer Index published rate values can be found at Refinitiv’s website. Refinitiv is one of the world’s largest providers of financial markets data and PNC’s selected source for reliable rates.  You can see the most up to date Refinitiv Consumer Index reference rates by using the following link and clicking on “View consumer rates summary”:
    • The Refinitiv website states that until July 2023 the consumer rates being displayed are only prototypes for demonstration purposes. Starting in July 2023, the consumer rates displayed will become the official production benchmarks.

  • Your interest rate remains variable. It will change with the same frequency as it changed before, based on the terms and conditions of your loan. 
  • We will calculate your interest rate using your new reference rate plus whatever margin was stated in your promissory note. 

  • With any ARM loan, the interest rate (and therefore the payment) can increase, decrease, or stay the same whenever you have a scheduled interest rate adjustment, regardless of the index that's used
  • The actual impact on your payment cannot be determined until your next regularly scheduled Change Date as provided in your promissory note.
  • If you are enrolled in automatic payments and your payment amount changes due to the scheduled interest rate adjustment, PNC will automatically draw the required payment for the updated amount. No action is needed from you. 

  • If you have already terminated your line/loan or it has already been terminated by PNC, you may disregard the notice you received.

  • If you have other loans with PNC and they are impacted, you will receive a separate notification.

  • No. The interest rate on your HELOC fixed rate lock balance stays the same until it is paid in full so this change in index will not affect your interest rate.

  • If you have bankruptcy protections, we understand that you are in bankruptcy. We are sending this notification for informational and compliance purposes. 

  • If you have bankruptcy protections, we have copied your bankruptcy counsel on the correspondence.