For most Singapore buyers, the choice between a fixed rate and floating rate mortgage comes down to one thing: do you value payment certainty more, or are you comfortable with some interest rate risk in exchange for potential savings. In 2026’s lower-rate environment, floating packages often start cheaper, but fixed packages still appeal to those who want stable monthly instalments and easier budgeting.[1][4]
This cluster article focuses on “Fixed Rate vs Floating Rate Mortgage Which to Choose: Frequently Asked Questions” for Singapore borrowers. It supports our broader Homejourney pillar guide on mortgage types and home loan planning, where you can dive deeper into HDB loans vs bank loans, CPF usage, TDSR and more HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney 房贷类型完整对比：银行利率比较 | Homejourney指南 .
What is the difference between fixed and floating rate mortgages in Singapore?
Fixed rate mortgage: Your interest rate is locked in for a set period (usually 2–5 years), and your monthly instalment stays the same during that lock-in.[1][3] In Singapore, 3-year fixed packages from major banks were around 1.7% p.a. in early 2026 for selected profiles.[1][2] After the fixed period, the loan usually converts to a floating rate based on the bank’s board rate, fixed deposit pegged rate or SORA.[3][5]
Floating rate loan: Your interest rate moves with a benchmark, most commonly 3M or 6M SORA plus a fixed bank spread.[1][3][4] When SORA falls, your instalment goes down; when it rises, your instalment increases. In late 2025, 3M SORA fell to about 1.3–1.4%, its lowest in three years, making floating packages very attractive for many borrowers.[1][4]
In practical terms, imagine a couple buying a 4-room resale HDB in Punggol for about $650,000, taking a $520,000 bank loan over 25 years. A 1.7% fixed rate might mean roughly stable instalments for 3 years, while a SORA-pegged floating package could start slightly lower but move every 3 or 6 months depending on the benchmark.
How are fixed and floating rates calculated in Singapore?
Fixed rate mortgage pricing:
- A promotional fixed rate (e.g. 1.55%–1.8% p.a.) for 2–5 years, depending on bank and package.[1][2]
- A lock-in period where penalties apply if you fully redeem or refinance early (typically 1.5–1.75% of outstanding loan).
- After lock-in, your loan reverts to a floating formula, often bank board rate + margin or FD-pegged rate + margin.[3][5]
Floating rate loan pricing in 2026 usually follows:
- SORA-based packages:
Compounded 3M or 6M SORA + bank spread(for example, 3M SORA + 0.6% p.a.).[3][4] - Occasionally board rate or fixed deposit home rate packages (FHR).[3][5]
- Rates are reset every 3 or 6 months according to the benchmark movement.
According to MAS, SORA is a volume‑weighted average rate of overnight interbank SGD transactions, and is considered more transparent and robust than older benchmarks like SIBOR.[3] You can check the official SORA fixings on MAS’ website daily and track live 3M and 6M SORA directly via Homejourney’s bank rates page Bank Rates .
The chart below shows recent interest rate trends in Singapore, helping you visualise how benchmarks like SORA have moved in the past 6 months and how that might impact floating packages:
In 2025–2026, mortgage rates have dropped to about three-year lows, with some fixed packages falling from around 3.1% to roughly 1.4–1.8%.[1] Floating packages linked to 3M SORA have also become cheaper, which is why many HDB owners in estates like Yishun, Sengkang and Jurong are actively refinancing to bank loans to save interest.[1][4]
SORA basics: 3M vs 6M SORA for floating rate loans
SORA (Singapore Overnight Rate Average) is now the main benchmark used for floating rate home loans in Singapore.[3][4] It is published by MAS and reflects the average overnight interbank lending rate in SGD. Most banks in Singapore — including DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB and RHB — now offer 3M or 6M SORA‑pegged packages.
3M SORA vs 6M SORA:
- 3M SORA packages: Rate is reset every 3 months. Your instalments respond faster to market changes, meaning you benefit more quickly when rates fall, but also feel increases sooner.
- 6M SORA packages: Rate is reset every 6 months. Smoother and slightly slower adjustments, which some borrowers find easier for budgeting.
In practice, if you live in a 3‑bedroom condo in Tampines and your 3M SORA package is currently at 1.7% (say, 1.1% SORA + 0.6% margin), a future rise in SORA to 1.6% would push your overall rate to 2.2% at the next reset. That could mean a few hundred dollars more per month, depending on your loan size. This is why understanding SORA trends and your own risk tolerance is critical.
You can track live 3M and 6M SORA and compare how each bank prices its spread via Homejourney’s bank rates comparison page Bank Rates , which consolidates rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank and more.
Fixed vs floating rate: key pros, cons, and who they suit
Below is a simplified mortgage rate comparison to help you assess which interest rate type aligns with your situation.
Who might choose fixed rate:
- First‑time buyers stretching their budget for a 4‑room BTO in Tengah or Tampines, who cannot risk big swings in instalments.
- Families with one primary income, where job security or cash buffer is limited.
- Owners committing to stay at least through the lock‑in period (e.g. 3–5 years).
Who might choose floating rate:
- Borrowers with strong cash reserves and stable income, such as dual‑income households in city fringe condos (e.g. Geylang, Queenstown).
- Investors buying a second property in areas like Jurong or Woodlands for rental, where they actively monitor rates and are prepared to refinance.
- Owners of properties under construction (e.g. new launch ECs) who may want no or short lock‑in to switch once the project TOPs.[2]
