Choosing between a fixed rate and a floating rate mortgage in Singapore comes down to how much certainty you want in your monthly payments versus how comfortable you are with interest rate fluctuations. In 2026’s lower-rate environment, floating packages often start cheaper, but fixed rates can still make sense if you prioritise stability and clear budgeting.
This article is a focused companion to Homejourney’s main mortgage pillar guide on Singapore home loans . Here, we dive specifically into “Fixed Rate vs Floating Rate Mortgage Which to Choose: Benefits of Applying via Homejourney”, so you can make a confident, safe decision supported by transparent data and tools.
Fixed vs Floating Rate: Simple Definitions for Singapore Borrowers
In Singapore, most bank home loans for HDB and private properties are either fixed rate or floating rate packages.
Fixed rate mortgage (Singapore context)
A fixed rate home loan is where the interest rate stays the same during a fixed “lock-in” period, usually 2 to 5 years.[3][5] Your monthly instalment does not change within this period, even if market rates go up or down.[3][5] After the fixed period ends, the loan usually converts to a floating package based on a bank’s board rate, fixed deposit rate, or SORA.[3][5]
In early 2025, many fixed-rate packages in Singapore were about 3.1%, but by late 2025 and into 2026, some fell to roughly 1.4–1.8% as interest rates declined.[1] Fixed packages tend to be slightly higher than equivalent floating packages, but offer certainty and easier budgeting.[1][3]
Floating rate mortgage (Singapore context)
A floating (or variable) rate mortgage is where the interest rate changes over time based on a benchmark.[2][3] In Singapore currently, most new packages are pegged to:
- 3M or 6M SORA (Singapore Overnight Rate Average)
- or bank-determined rates like Board Rate or Fixed Deposit Home Rate (FHR)
SORA-based packages typically use a formula like 3M SORA + bank spread. When SORA moves, your instalment adjusts accordingly.[3] In late 2025, 3M SORA fell from around 3% at the start of the year to about 1.2–1.34%, its lowest level in about three years, making floating packages significantly cheaper for many borrowers.[1][4]
Understanding SORA and How It Affects Your Mortgage
What is SORA?
SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of overnight interbank SGD transactions, published by MAS (Monetary Authority of Singapore) as the main benchmark for Singapore dollar interest rate products.[3] It is based on actual transactions, not quotes, and is considered transparent and robust.
Most home loans use 3M SORA or 6M SORA, referring to the 3‑month or 6‑month compounded SORA values. When you take a SORA-pegged mortgage, your rate is often:
- 3M SORA + a fixed spread (for example, 0.7–1.0% p.a.)
- 6M SORA + a fixed spread
3M vs 6M SORA: What’s the difference?
- 3M SORA: resets every 3 months; reacts faster to rate changes; more volatile instalments but closer to the current market level.
- 6M SORA: resets every 6 months; slower to adjust; instalments are more stable in the short term but can lag when rates fall or rise.
In late 2025, 3M SORA dropped to around 1.2–1.34%, spurring many HDB owners to refinance from HDB’s fixed 2.6% rate to cheaper bank loans.[1][4] This trend continues to shape 2026 packages, with many banks including DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank and others offering competitive SORA-based mortgages.[1][2][4]
The chart below shows recent interest rate trends in Singapore to help you visualise how quickly SORA-linked mortgage costs can move:
Use this trend view together with Homejourney’s real-time rate tracking to understand whether you are entering the market in a relatively low or high SORA phase.
Fixed vs Floating Rate: Pros, Cons and Risk Profiles
Here is a quick comparison tailored to Singapore home buyers and investors:
Who usually prefers fixed rates?
- Young families upgrading from a 4-room HDB in Punggol to a 5-room flat in Tampines, where monthly cash flow is tight and any surprise increase in instalment is stressful.
- Owners planning to stay long-term (e.g., 10+ years in a Bukit Panjang BTO) and not actively monitoring interest rate news.
- Borrowers with variable income (e.g., self-employed in F&B at Tiong Bahru) who value predictable housing costs.
Who usually prefers floating rates?
- Investors buying a 1‑bedroom condo near Redhill MRT, expecting rental to cover fluctuations and aiming to minimise average interest cost in a low-rate environment.
- Existing HDB owners refinancing from a 2.6% HDB loan to a SORA-based bank loan around 1.4–1.8% equivalent, looking for substantial interest savings.[1][4]
- Owners planning to sell or upgrade within a few years (e.g., moving from a Jurong West HDB to an OCR condo in Tengah), and who are comfortable tracking rates via MAS and Homejourney.
Real 2026 Rate Landscape: What Borrowers Are Seeing
Based on 2025–2026 market coverage, fixed home loan rates in Singapore fell from around 3.1% at the start of 2025 to roughly 1.4–1.8% by year end, moving broadly in tandem with floating SORA-based packages.[1] Some independent comparisons in early 2026 quote promotional fixed packages near 1.45–1.70% and floating packages around or slightly below that, depending on bank spreads and lock-in periods.[2]
This low-rate environment has led many HDB flat owners to refinance from HDB’s fixed 2.6% loan to cheaper bank loans, especially floating SORA packages at ~1.3–1.8% levels, saving hundreds of dollars a month on typical loan sizes.[4] However, professionals caution that borrowers should also consider lock-in clauses, penalties, and long-term rate expectations, not just headline rates.[1]
Important disclaimer: The examples above are indicative and may not reflect the exact rates you see today. Always check live rates on Homejourney’s bank rates page Bank Rates and refer to MAS or bank disclosures before committing. This article is educational and does not constitute personalised financial advice.
