The fastest way to decide between a fixed rate vs floating rate mortgage in Singapore is to match the interest rate type to your risk tolerance and holding period: choose a fixed rate mortgage if you prioritise stability and predictable monthly instalments for the next 2–5 years, and choose a floating rate loan if you can tolerate fluctuations and want to potentially save more if rates fall further.
This tactical guide supports Homejourney’s main mortgage pillar content on Fixed Rate vs Floating Rate Mortgage: Which to Choose in Singapore Fixed vs Floating Rate Mortgage: Which to Choose in Singapore | Homejourney by going deeper into bank rate comparison, SORA-linked packages, and a clear decision framework tailored to Singapore buyers and investors.
What is a fixed vs floating rate home loan in Singapore?
Fixed rate mortgage: Your interest rate is locked in (typically 2–5 years). During this lock-in, the rate and your monthly instalment do not change, even if market rates move.[1] After the fixed period, the package usually converts to a floating rate linked to the bank’s board rate, fixed deposit rate, or SORA.[1]
Floating rate loan: Your interest rate moves when the benchmark it is pegged to changes (e.g. 3M SORA + bank spread). Monthly instalments can go up or down depending on the interest rate environment.[1][4]
In Singapore today, most new bank mortgages are either:
- Fixed rate packages (2–3 year lock-in, then float)
- SORA-pegged floating rate packages (3M or 6M SORA + bank spread)
You can compare both types side-by-side on Homejourney’s bank rates page: Bank Rates .
How SORA works and why it matters for floating loans
The Monetary Authority of Singapore (MAS) replaced SIBOR/SOR with SORA (Singapore Overnight Rate Average), a volume-weighted average rate of actual overnight interbank SGD transactions.[1] This makes it more transparent and less prone to manipulation than old benchmarks.
3M vs 6M SORA: what’s the difference?
For home loans, banks commonly use:
- 3M SORA: Rate resets every 3 months
- 6M SORA: Rate resets every 6 months
In practice:
- 3M SORA packages react faster to interest rate changes – you benefit sooner when rates fall, but you also feel increases earlier.
- 6M SORA packages change less frequently, which can feel slightly more stable, but you might be “stuck” with a higher rate for longer if rates are dropping.
Most floating packages are quoted as “3M SORA + spread”. For example, if 3M SORA is 1.40% and the bank spread is 0.70%, your effective interest rate is 2.10% p.a. until the next reset.
Homejourney lets you track live 3M and 6M SORA daily and see how changes would affect your instalments on Bank Rates . This is especially useful if you’re timing a refinance from fixed to floating, or vice versa.
Fixed vs floating: key pros, cons and risk profiles
The core trade-off is stability vs potential savings. Here’s a concise comparison for Singapore borrowers:
According to recent coverage on Singapore’s housing loans, fixed rates at the start of 2025 were near multi‑year lows but have been trending down together with floating packages, prompting many borrowers to compare stability versus further downside potential in SORA-pegged loans.[4]
Current bank rate landscape in 2025 (illustrative)
As of late 2025, promotional home loan rates in Singapore often cluster in a relatively narrow band, with:
- Fixed rate packages for completed private properties sometimes advertised in the ~1.45%–1.70% p.a. range for Years 1–2, depending on bank, tenure and loan size.[3]
- Floating SORA packages using 3M SORA plus a bank spread, where the effective first-year rate may be similar or slightly lower than fixed packages, especially when 3M SORA is depressed.[1][3]
Individual banks (DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank, Citibank) run monthly promotions, so headline rates change frequently.[3] Instead of chasing one-off promos from each bank, Homejourney’s Bank Rates consolidates current rates so you can compare at a glance, including:
- Fixed rate vs floating rate package comparisons
- HDB vs private property loan options
- Refinancing vs new purchase packages
Note: Rates above are indicative and for education only. Always refer to MAS-regulated banks and official bank websites for current packages, and verify via Homejourney’s live bank rate comparison.
How to compare fixed vs floating using real numbers
Consider a typical example many Singapore buyers face: a $800,000 loan, 25‑year tenure, for a 4‑room resale flat in a mature estate like Toa Payoh or Queenstown, bought at around $900,000–$1 million (not uncommon for well-renovated units near MRT).
Step 1: Compare expected first‑year instalments
Assume two simplified packages (illustrative only):
- Package A – Fixed: 1.60% p.a. fixed for 2 years
- Package B – Floating: 3M SORA 1.30% + 0.50% spread = 1.80% p.a. (reset every 3 months)
On Homejourney’s mortgage calculator Mortgage Rates (also accessible via ), you can key these in and see that:
- At 1.60%, monthly instalment is roughly in the low‑to‑mid $3,200s.
- At 1.80%, monthly instalment is roughly in the mid‑$3,300s.
The floating rate starts slightly higher in this example, but if you reverse the assumption (say 1.45% floating vs 1.70% fixed), the floating instalment might be ~$80–$120 cheaper per month initially. Over 2 years, that difference adds up to a few thousand dollars.
Step 2: Stress‑test rate changes
Using Homejourney’s calculator, adjust the floating rate upwards by 1–2 percentage points to see whether you can still comfortably service the loan (e.g. simulate 3.00% or 3.50%). This is crucial if your household income is tight or you’re planning future expenses like children or a car.
