2026 New Year Mortgage Goals: Set Up Your Home Loan for Success

Executive Summary

As Singapore enters 2026, homeowners and property buyers face a unique financial opportunity. Interest rates have fallen to their lowest levels in three years, with fixed-rate mortgages now roughly half what they were just 12 months ago. This comprehensive guide establishes Homejourney as your definitive resource for understanding mortgage strategy, refinancing opportunities, and long-term financial planning for your home loan.

Whether you're a first-time buyer setting up your initial mortgage, an HDB owner considering a switch to bank financing, or an investor optimizing your portfolio, this guide provides the data-driven insights and actionable strategies you need to make 2026 your year of mortgage success. We'll explore current market conditions, help you understand your options, and show you how to align your mortgage decisions with your broader financial goals.

Table of Contents

• 1. The 2026 Mortgage Landscape: Understanding Current Conditions
• 2. Interest Rate Trends and What They Mean for Your Mortgage
• 3. Fixed vs. Floating: Choosing the Right Rate Structure for 2026
• 4. Strategic Refinancing: Is Now the Time to Switch?
• 5. HDB to Bank Loan Transition: The Numbers Behind the Switch
• 6. Accelerating Your Mortgage Payoff: Practical Strategies
• 7. New Year Mortgage Goals Framework: Setting Achievable Targets
• 8. Homejourney's Tools for Mortgage Success
• 9. Frequently Asked Questions About 2026 Mortgage Planning

1. The 2026 Mortgage Landscape: Understanding Current Conditions

Singapore's mortgage market has undergone a dramatic transformation over the past 12 months. At the start of 2025, fixed-rate home loans were priced at approximately 3.1%, reflecting a higher interest rate environment. Today, these same products are available at between 1.4% and 1.8%, representing a reduction of nearly 50%. This shift represents one of the most significant opportunities for homeowners in recent years, and understanding how we arrived here is crucial to making informed decisions about your 2026 mortgage strategy.

The primary driver of these rate reductions has been the U.S. Federal Reserve's policy pivot. Throughout 2025, the Fed delivered three rate cuts, signaling a shift away from the restrictive monetary policy that characterized 2022-2023. Singapore's mortgage rates, which are primarily determined by the movements of the U.S. Federal Reserve and Singapore's benchmark SORA rate, have followed this downward trajectory closely. This relationship between U.S. monetary policy and Singapore home loan rates is fundamental to understanding mortgage planning for 2026.

For context, SORA (Singapore Overnight Rate Average) has declined from 3% in early January 2025 to just 1.2% by December, marking its lowest level since August 2022. This compression in SORA rates directly translates to lower monthly mortgage payments for borrowers, particularly those on floating-rate loans or those refinancing into new fixed-rate packages.

The competitive environment among Singapore's major banks—including DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others—has intensified as lenders compete for market share. This competition has resulted in additional incentives beyond just lower rates, including legal subsidies, cash rebates, and flexible repayment terms. For borrowers planning their 2026 financial goals, this competitive landscape creates multiple pathways to optimize their mortgage costs.

2. Interest Rate Trends and What They Mean for Your Mortgage

Understanding where interest rates are headed is central to making sound mortgage decisions in 2026. Current market forecasts, based on the latest signals from the U.S. Federal Reserve and Singapore's banking sector, suggest a specific trajectory that should inform your planning.

The 2026 Rate Outlook

The Federal Reserve has signaled that the era of aggressive rate cuts has concluded. New Fed projections indicate only one-quarter percentage-point cut is expected for 2026, representing a significant slowdown from the three cuts delivered in 2025. Fed Chair Jerome Powell has explicitly stated that rate hikes are unlikely in the near term, but the message from the central bank is clear: the period of pre-emptive easing is over. The Fed is now operating in a "wait-and-see" mode, taking a meeting-by-meeting approach to policy decisions.

For Singapore borrowers, this translates to a specific expectation: interest rates will likely stabilize rather than continue their sharp downward trajectory. UOB, one of Singapore's largest financial institutions, forecasts that SORA will bottom out around 1% in Q2 2026, before gradually rising to approximately 1.39% by the end of the year. This represents a modest increase from current levels but remains historically low.

The chart below shows recent interest rate trends in Singapore to help you understand how rates have moved and what forecasts suggest for the remainder of 2026:

What does this mean practically? If you're considering a mortgage decision, the window for locking in historically low rates is narrowing. While rates are unlikely to spike dramatically, the trajectory suggests that rates available in Q1 2026 may represent some of the lowest you'll see for the remainder of the year. This is particularly relevant for those considering refinancing or switching from HDB loans to bank financing.

SORA: The Benchmark Behind Your Rate

Most floating-rate mortgages in Singapore are pegged to SORA plus a bank spread (typically ranging from 0.25% to 0.50%). Understanding SORA movements is therefore essential to predicting your mortgage costs. SORA is determined by overnight interbank lending rates and moves in response to the same factors that influence the Fed's policy—primarily inflation, employment data, and economic growth expectations.

The current SORA level of approximately 1.2% is significant because it represents a floor for most floating-rate mortgages. Even with a 0.25% spread (the lowest available), borrowers would face an all-in rate of 1.45%. For comparison, HDB concessionary loans remain fixed at 2.6%, making the rate differential particularly attractive for those considering a switch from HDB to bank financing.

3. Fixed vs. Floating: Choosing the Right Rate Structure for 2026

One of the most critical decisions for your 2026 mortgage strategy is whether to lock in a fixed rate or maintain exposure to floating rates. This choice depends on your risk tolerance, financial situation, and long-term planning horizon. Both options have distinct advantages in the current environment.

The Case for Fixed-Rate Mortgages in 2026

Fixed-rate mortgages offer certainty and peace of mind. With rates currently available at 1.4% to 1.8% for lock-in periods of 2-5 years, borrowers can guarantee their monthly repayments will remain unchanged regardless of what happens to broader interest rates. This is particularly valuable if you believe rates will rise in the future—which most forecasters expect after 2026.

The psychological benefit of fixed-rate mortgages should not be underestimated. Knowing exactly what your mortgage payment will be allows for more precise financial planning and reduces anxiety about rate movements. For first-time buyers establishing their 2026 financial goals, this predictability is often worth the potential cost of locking in a slightly higher rate.

Banks are currently offering competitive fixed-rate packages, particularly in Q1 2026 as they compete for market share. Many packages include attractive features such as penalty-free partial repayment options within lock-in periods, allowing you to make additional payments without incurring fees if your financial situation improves.

The Case for Floating-Rate Mortgages in 2026

Floating-rate mortgages offer lower initial rates and potential savings if rates continue to decline or remain stable. Currently, the lowest floating rates available are approximately 1M SORA + 0.25% (equivalent to around 1.36%), which is lower than most fixed-rate options. If you believe rates will remain low or decline further, floating rates could provide substantial savings over your loan tenure.

However, floating-rate mortgages carry interest rate risk. If SORA rises significantly—particularly if economic conditions deteriorate and the Fed reverses course—your monthly payments could increase substantially. Mortgage experts caution that borrowers selecting floating rates must be prepared for economic volatility and potential rate increases in future cycles.

Decision Framework: Which Option Suits Your Situation?

The consensus among mortgage experts is that the current environment—with rates at 3-year lows and forecasts suggesting modest increases—favors fixed-rate mortgages for most borrowers. However, your personal circumstances should ultimately guide this decision. Use Homejourney's mortgage calculator to model both scenarios and see which aligns better with your financial goals.

4. Strategic Refinancing: Is Now the Time to Switch?

If you obtained your mortgage in 2022 or 2023 when rates were significantly higher, refinancing in 2026 could result in substantial savings. This is particularly true for borrowers currently on older fixed-rate packages or those still servicing mortgages at higher rates. However, refinancing involves costs and requires careful analysis to ensure the savings justify the transaction.

The Refinancing Opportunity

Consider a concrete example: A borrower with a S$500,000 mortgage obtained in 2022 at 3.2% could refinance into a current 5-year fixed package at 1.55%. Over a 25-year loan tenure, this reduction in interest rate translates to approximately S$4,100 in annual interest savings, or roughly S$342 per month. Over the 5-year fixed period, this borrower would save approximately S$20,500 in total interest payments.

OCBC Bank reported that the number of HDB flat owners switching from HDB loans to bank financing grew seven times in the first 11 months of 2025, driven precisely by this refinancing opportunity. DBS similarly saw a 13-fold increase in take-up for its POSB HDB loan in October and November compared to the start of the year. These statistics demonstrate that refinancing is not merely a theoretical opportunity—it's an active strategy being pursued by thousands of Singapore homeowners.

Understanding Refinancing Costs

Before refinancing, you must understand the associated costs. These typically include:

• Early Repayment Penalty: Some mortgages include penalties for early repayment, particularly during fixed-rate lock-in periods. Check your current loan documents to understand any penalties you might incur.
• Legal Fees: Refinancing requires new legal documentation, typically costing S$500-S$1,500 depending on the bank and property value.
• Valuation Fees: Banks typically require a property revaluation, costing S$300-S$500.
• Stamp Duty: While refinancing doesn't incur the same stamp duty as a property purchase, there are modest documentation fees.
• Processing Fees: Some banks charge application or processing fees, though many waive these during promotional periods.

Many banks currently offer refinancing incentives to attract borrowers. These may include legal fee subsidies (S$2,000-S$2,800), cash rebates, or waived processing fees. These incentives can substantially offset refinancing costs, making the decision to refinance more attractive.

The Refinancing Decision Framework

To determine if refinancing makes sense for your situation, calculate your break-even point: How long will it take for your monthly savings to exceed the upfront costs of refinancing? Generally, if you plan to remain in your home for at least 2-3 years after refinancing, the savings will exceed the costs. Given that most borrowers remain in their homes for significantly longer, refinancing typically makes financial sense in the current environment.

Homejourney's mortgage brokers can help you evaluate refinancing options across multiple banks. By comparing offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others, you can identify the refinancing package that delivers the greatest net savings after accounting for all costs and incentives.

5. HDB to Bank Loan Transition: The Numbers Behind the Switch

One of the most significant opportunities in the current market is the ability for HDB flat owners to refinance from HDB concessionary loans into bank mortgages. This transition has become increasingly attractive as bank rates have fallen below the HDB rate.

Understanding the Rate Differential

HDB concessionary loans are fixed at 2.6%, pegged at 0.1% above the Central Provident Fund (CPF) Ordinary Account rate. This rate has remained stable for decades, providing consistency but also inflexibility. Bank mortgages, by contrast, move with market conditions. Currently, the lowest bank mortgage rates available are approximately 1.35% for large loans, with typical rates for standard loan amounts ranging from 1.4% to 1.8%.

This creates a rate differential of 0.8% to 1.25% between HDB loans and bank mortgages—a substantial gap that translates directly to monthly savings. For a S$500,000 loan, this differential means monthly savings of approximately S$333 to S$520, or S$4,000 to S$6,240 annually.

Important Considerations for HDB to Bank Transitions

While the rate savings are compelling, there are important considerations before making this switch:

• Irreversibility: Once you switch from an HDB loan to a bank mortgage, you cannot return to HDB financing in the future. This is a permanent decision that should be made carefully.
• Rate Risk: Bank mortgages expose you to interest rate risk. While current rates are low, they could rise in future cycles. HDB loans provide certainty that rates will remain fixed at 2.6%.
• Loan Flexibility: Bank mortgages often offer greater flexibility in terms of partial repayment options, refinancing capabilities, and loan restructuring. HDB loans are more rigid in their terms.
• CPF Usage: Switching to a bank mortgage may affect how you can use your CPF for mortgage payments. Ensure you understand the implications for your retirement planning.

Mortgage experts recommend that HDB owners considering this switch should be confident that they can withstand potential rate increases in future economic cycles. If you're budget-constrained and cannot absorb higher payments if rates rise to 3-4% in future years, maintaining your HDB loan may be the prudent choice despite current savings opportunities.

However, for borrowers with financial flexibility and a long-term perspective, the current rate environment presents a compelling opportunity to lock in substantial savings. Many financial advisors suggest that borrowers should take advantage of this gap "so long as they are aware that they cannot go back to taking an HDB loan in future and are prepared for volatility."

6. Accelerating Your Mortgage Payoff: Practical Strategies

Beyond just securing a favorable interest rate, your 2026 financial goals should include strategies to accelerate your mortgage payoff and reduce the total interest paid over your loan tenure. Several practical strategies can help achieve this objective.

Strategy 1: Increase Your Monthly Payments

The most straightforward way to pay off your mortgage faster is to increase your monthly payments beyond the minimum required amount. Even modest increases can have dramatic effects over a 25-30 year loan tenure. For example, increasing your monthly payment by S$500 on a S$500,000 mortgage could reduce your total interest paid by S$50,000-S$75,000 and shorten your loan tenure by 3-5 years.

Many modern bank mortgages offer penalty-free partial repayment options, allowing you to make additional payments without incurring fees. This flexibility makes it easier to implement this strategy when your financial situation improves—such as when you receive a bonus, inheritance, or salary increase.

Strategy 2: Make Lump-Sum Payments When Possible

Rather than spreading additional payments throughout the year, consider making lump-sum payments at specific times—such as when you receive your annual bonus or year-end gratuity. A single lump-sum payment of S$10,000-S$20,000 can reduce your loan tenure by several months and save thousands in interest.

CPF members can also use their CPF savings to make lump-sum mortgage payments, effectively using retirement savings to reduce home loan interest. This strategy requires careful consideration of retirement planning implications, but for many borrowers, the interest savings justify the approach.

Strategy 3: Refinance into a Shorter Loan Tenure

When refinancing, consider shortening your loan tenure from 25-30 years to 20-25 years. While this increases your monthly payment, the reduction in total interest paid is substantial. A borrower refinancing a S$500,000 mortgage from a 30-year tenure to a 25-year tenure would pay approximately S$50,000-S$75,000 less in total interest, depending on the interest rate.

In the current environment with low rates, this strategy is particularly attractive. Locking in a 1.5% rate on a 25-year tenure is significantly more favorable than the 3.2% rates that were available just a few years ago.

Strategy 4: Optimize Your Loan Structure

Some borrowers benefit from splitting their mortgage into multiple loans with different structures—for example, 60% on a 3-year fixed rate and 40% on a floating rate. This approach allows you to benefit from both rate certainty and rate flexibility, while also providing optionality as rates move. When your fixed-rate period expires, you can refinance based on the prevailing rate environment.

Your Homejourney mortgage broker can help you model different loan structures and identify the combination that best serves your 2026 financial goals.

7. New Year Mortgage Goals Framework: Setting Achievable Targets

As you enter 2026, establishing specific, measurable mortgage goals will help you stay focused and motivated throughout the year. Rather than vague aspirations like "pay off my mortgage faster," set concrete targets that align with your broader financial situation.

Goal-Setting Framework

Goal Type 1: Rate Optimization Goals

If you're currently on a high-rate mortgage or HDB loan, set a specific target to refinance into a lower-rate product by a particular date. For example: "Refinance my HDB loan into a bank mortgage at 1.55% or lower by March 31, 2026." This goal leverages the current market window and the competitive environment among banks.

Goal Type 2: Payment Acceleration Goals

Set a target for additional mortgage payments beyond your minimum required amount. For example: "Make S$500 additional monthly payments and S$5,000 lump-sum payments twice per year." This goal is specific, measurable, and aligned with your cashflow.

Goal Type 3: Tenure Reduction Goals

Establish a target for how many years you want to reduce your loan tenure. For example: "Reduce my loan tenure from 30 years to 25 years by refinancing in Q1 2026." This goal provides clarity about your long-term financial planning.

Goal Type 4: Interest Savings Goals

Calculate your target for total interest savings over your remaining loan tenure. For example: "Save S$100,000 in total interest payments through refinancing and accelerated payments." This goal connects your mortgage strategy to tangible financial outcomes.

Implementing Your Goals

Once you've established your goals, create an action plan with specific steps and timelines:

1. Month 1 (January): Compare current mortgage rates across major banks using Homejourney's bank rates page. Calculate your refinancing break-even point and determine if refinancing aligns with your goals.
2. Month 1-2 (January-February): If refinancing makes sense, submit applications to 2-3 banks offering the most competitive rates and incentives. Use Homejourney's multi-bank application feature to streamline this process.
3. Month 2-3 (February-March): Review offers from banks, negotiate terms if possible, and finalize your refinancing decision. Aim to complete refinancing by end of Q1 to lock in current rates before they potentially rise.
4. Month 3 onwards: Once refinanced (or if you decided not to refinance), implement your payment acceleration strategy. Set up automatic additional payments or schedule lump-sum payments at specific times during the year.
5. Quarterly Reviews: Every three months, review your progress against your goals. Adjust your strategy if your financial situation changes or if market conditions shift significantly.

By following this structured approach, you transform vague aspirations into concrete actions, significantly increasing the likelihood that you'll achieve your 2026 mortgage goals.

8. Homejourney's Tools for Mortgage Success

Homejourney is committed to creating a safe, trusted environment where Singapore homeowners can make confident mortgage decisions. Our platform provides several tools and resources specifically designed to support your 2026 financial goals.

Bank Rates Comparison Page

Our comprehensive bank rates page displays current mortgage rates from all major Singapore banks—DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB Bank, Public Bank, Hong Leong Bank, and Citibank. Rather than visiting each bank individually, you can compare rates, loan terms, and incentives in one place. This transparency helps you identify the most competitive options and make informed decisions based on complete information.

Our rates are updated regularly to reflect current market conditions, ensuring you always have access to the latest information. We verify all rates and terms directly from banks, prioritizing accuracy and trustworthiness in everything we present.

Mortgage Eligibility Calculator

Our built-in calculator helps you determine your borrowing capacity based on your income, existing debts, and CPF savings. Rather than guessing about your eligibility, you can instantly see how much you can borrow, what your monthly payments would be at different interest rates, and how different loan tenures affect your total interest paid.

This calculator is particularly valuable when setting your 2026 financial goals. You can model different scenarios—such as increasing your down payment, reducing your loan tenure, or refinancing into a lower rate—and see exactly how each decision impacts your financial situation.

Multi-Bank Loan Application

Rather than submitting separate applications to each bank, Homejourney's multi-bank application system allows you to submit one comprehensive application that reaches all major lenders simultaneously. This streamlines the application process and helps you receive multiple offers for comparison.

Our Singpass/MyInfo integration further simplifies this process. Your income, employment, and CPF data are verified instantly through official government systems, reducing paperwork and accelerating approval timelines. This commitment to using verified data reflects our priority on user safety and trustworthiness.

Homejourney Mortgage Brokers

When you apply for a loan through our platform, you're connected with experienced Homejourney Mortgage Brokers who provide personalized guidance throughout the application and approval process. These brokers understand Singapore's unique mortgage landscape and can help you navigate refinancing decisions, optimize your loan structure, and identify the best options for your specific situation.

Our brokers actively listen to your concerns and priorities, ensuring that the mortgage solution we help you find aligns with your 2026 financial goals. We prioritize your safety and security, verifying all information and ensuring transparency at every step.

Real-Time SORA Tracking

For those considering floating-rate mortgages, our platform provides real-time tracking of 3M SORA and 6M SORA rates. This allows you to monitor the benchmark that determines your mortgage rate and make informed decisions about when to refinance or lock in a fixed rate.

Property Search Integration

Once you've determined your borrowing capacity and mortgage strategy, Homejourney's property search feature helps you find properties within your budget. Rather than searching broadly and then discovering you can't afford your dream property, you can search with confidence knowing exactly what you can borrow and what your monthly payments will be.

This integrated approach—from mortgage planning through property search to loan application—reflects Homejourney's commitment to creating a seamless, trustworthy experience for Singapore homeowners.

9. Frequently Asked Questions About 2026 Mortgage Planning

Q1: Should I lock in a fixed rate now, or wait to see if rates fall further?

Current forecasts suggest rates have likely found their floor around 1% in Q2 2026, with modest increases expected later in the year. While rates could decline slightly further, the risk of waiting is that you miss the opportunity to lock in historically low rates. Most mortgage experts recommend locking in a fixed rate in Q1 2026 rather than waiting for marginal additional declines. The certainty of a 1.5-1.8% fixed rate is generally worth more than the potential for saving 0.1-0.2% by waiting.

Q2: I have an HDB loan at 2.6%. Should I switch to a bank mortgage at 1.5%?

The rate differential is compelling—approximately S$4,000-S$6,000 in annual savings for a S$500,000 loan. However, this decision is irreversible, and you should only switch if you're confident you can withstand potential rate increases in future cycles. If you're budget-constrained and cannot absorb higher payments if rates rise to 3-4% in future years, maintaining your HDB loan may be prudent. For financially flexible borrowers, the current opportunity is attractive.

Q3: What's the difference between 1M SORA and 3M SORA for floating-rate mortgages?

Most mortgages are pegged to either 1M SORA (one-month) or 3M SORA (three-month). 1M SORA is more volatile and changes more frequently, while 3M SORA is more stable but typically slightly higher. For most borrowers, the difference is modest (typically 0.1-0.2%), and the choice depends on your preference for rate stability versus potential savings.

Q4: How much can I save by refinancing from my current 3.2% mortgage to a 1.55% mortgage?

For a S$500,000 mortgage on a 25-year tenure, the difference between 3.2% and 1.55% translates to approximately S$342 in monthly savings, or S$4,100 annually. Over a 5-year fixed period, this represents S$20,500 in interest savings. After accounting for refinancing costs (typically S$2,000-S$3,000 after bank incentives), your net savings would be approximately S$17,500-S$18,500 over the 5-year period.

Q5: Should I increase my loan tenure to reduce my monthly payment, or keep it short to pay off faster?

This depends on your financial priorities. A longer tenure (30 years) reduces monthly payments but increases total interest paid. A shorter tenure (20-25 years) increases monthly payments but saves substantially on total interest. In the current low-rate environment, many experts recommend keeping your tenure as short as your budget allows, as you're locking in favorable rates. Use Homejourney's mortgage calculator to model both scenarios and see which aligns with your financial goals.