Fixed vs Floating Rate Mortgage: Which to Choose & Homejourney Benefits
In Singapore's 2026 housing market, choose a fixed rate mortgage for payment stability during lock-in periods (typically 2-5 years), ideal if you prioritize budgeting certainty amid low rates around 1.65%-1.75%.Floating rate loans, pegged to SORA (now at 1.2%), suit risk-tolerant buyers expecting further drops to 1.3%-1.5%, offering potential savings but repayment fluctuations.
This cluster article dives into fixed vs floating rate comparisons, helping you decide based on risk appetite and market outlook. It links to our pillar guide on Singapore mortgage types for full coverage. Homejourney simplifies choices with safe, verified bank comparisons at https://www.homejourney.sg/bank-rates, prioritizing your trust and security.
Understanding Fixed Rate Mortgages in Singapore
A fixed rate mortgage locks your interest rate for a set period, shielding you from hikes. For example, DBS or OCBC might offer 1.65% p.a. for 2-3 years on a $800,000 HDB loan in areas like Punggol, keeping monthly payments at ~$4,200 regardless of SORA rises.
Post-lock-in, it converts to floating, but this predictability aids first-time buyers under TDSR limits. Fixed rates are slightly higher upfront but provide peace of mind, especially with SORA at 3-year lows of 1.2% as of late 2025[2].
Insider tip: For HDB upgraders from Toa Payoh flats (~$600k resale), fixed rates align with stable family budgets during school terms.
What is a Floating Rate Loan & SORA Explained
A floating rate loan (or interest rate type tied to benchmarks) adjusts with market conditions, mainly SORA—the Singapore Overnight Rate Average, a transparent volume-weighted interbank rate replacing SIBOR.
3M SORA (compounded quarterly) powers most packages; e.g., UOB's 3M SORA + 0.5% spread yields ~1.7% at current 1.2% SORA. If SORA falls to 1.0%, your $800k loan drops to ~$4,000/month, saving $200 monthly[1][3].
6M SORA offers slightly more stability for less frequent changes. Track live 3M/6M SORA on Homejourney's bank rates page for daily updates, ensuring informed decisions in a trusted environment.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA's drop from 3% to 1.2% favors floating for savvy investors eyeing condos in Tengah.
Fixed vs Floating Rate: Pros, Cons & Mortgage Rate Comparison
Fixed suits conservative buyers; floating fits optimists betting on rate cuts. Current 2026 rates: Fixed ~1.65%-1.75% (HSBC, Standard Chartered); Floating 1.3%-1.5% (Maybank, CIMB + low spreads)[1][3].
| Aspect | Fixed Rate | Floating Rate (SORA) |
|---|---|---|
| Rate Stability | Locked 2-5 years | Fluctuates quarterly |
| Current Rates (2026) | 1.65%-1.75% p.a. | 1.2% SORA + 0.3%-0.7% |
| Best For | Budget certainty | Rate drop potential |
| Risk | Miss savings if rates fall | Higher payments if rates rise |
Floating often edges out long-term due to lower averages, but fixed rules for caution post-volatility[6]. Compare all banks (DBS, OCBC, UOB, HSBC, etc.) side-by-side on Homejourney.
Who Should Choose Which: Decision Framework
- Assess Risk Tolerance: Fixed for low-risk (e.g., families); floating for high-risk (investors).
- Check Economic Outlook: With SORA projected at 2.6% end-2025[1], floating wins if cuts continue.
- Run Numbers: Use Homejourney's calculator at https://www.homejourney.sg/bank-rates#calculator for your $500k EC loan scenario.
- Factor Flexibility: Prefer no-lock-in floating? Banks like RHB offer penalty-free prepayments.
- Refinance Later: Start floating, switch if rates spike—Homejourney streamlines this.
For a $1M private condo, fixed saves budgeting stress; floating could cut costs 10-15% if SORA dips further. Always verify TDSR eligibility first.
Benefits of Applying via Homejourney: Safety & Efficiency
Homejourney prioritizes user safety with verified rates from DBS to Public Bank, one application via Singpass for instant multi-bank offers—no endless forms.
- Compare mortgage rate comparison instantly: All partners side-by-side.
- Live SORA tracking + calculator for precise payments.
- Singpass auto-fills income data for 80% faster approvals.
- Connect with Homejourney Mortgage Brokers for personalized advice in a trusted space.
- Post-approval, search budget-fit properties at https://www.homejourney.sg/search.
Unlike scattered bank sites, Homejourney's transparency builds confidence—read our user feedback-driven updates. See related: Fixed vs Floating Rate Mortgages: Which to Choose in 2026 | Homejourney .
FAQ: Fixed vs Floating Rate Mortgages
Q: Is fixed or floating better in 2026?
A: Floating for potential savings if SORA stays low (1.2%); fixed for stability. Use Homejourney's tools to simulate[1][2].
Q: What is 3M vs 6M SORA?
A: 3M compounds quarterly (more responsive); 6M semi-annually (smoother). Track both on Homejourney.
Q: Can I switch from fixed to floating?
A: Yes, post-lock-in without penalties on flexible packages. Refinance via https://www.homejourney.sg/bank-rates.
Q: How does TDSR affect my choice?
A: Both count payments at stress rate (3.5% now). Fixed aids consistent TDSR compliance for HDB buyers.
Q: Are Homejourney applications safe?
A: Yes, Singpass-secured with verified bank partners—your data protected, decisions confident.
Ready to choose? Start your fixed vs floating rate journey safely at https://www.homejourney.sg/bank-rates. For full mortgage insights, visit our pillar on Singapore home loans. Homejourney: Trust, verified, secure.
