Fixed Rate vs Floating Rate Mortgage Which to Choose: Bank Rate Comparison Guide
Choose a fixed rate mortgage if you prioritize payment stability and budgeting certainty; opt for a floating rate loan if you're comfortable with fluctuations to potentially save on interest when rates fall. This fixed vs floating rate decision is crucial for Singapore homebuyers in 2026, with rates at 3-year lows. Homejourney helps you compare options safely via our verified bank rates page, ensuring transparent decisions in a trusted environment.
Understanding Fixed Rate Mortgages in Singapore
A fixed rate mortgage locks your interest rate for a set period, typically 1-5 years, before converting to floating. This provides predictable monthly payments, ideal for first-time HDB buyers or families budgeting for upgrades. Banks like DBS, OCBC, and UOB offer competitive fixed packages, with rates now close to floating options amid falling SORA.
Fixed rates protect against hikes, as seen when SORA peaked at 3% earlier. However, they often start slightly higher and may include lock-in penalties for early exit. At Homejourney, track these on our bank rates page for real-time comparisons across DBS (1.50% fixed for 3 years), OCBC, UOB, HSBC, and more.
Floating Rate Loans: Pegged to SORA
A floating rate loan, or interest rate type tied to SORA (Singapore Overnight Rate Average), adjusts with market conditions. SORA, the MAS-recommended benchmark since SIBOR's phase-out, reflects actual interbank transactions for greater transparency. 3M SORA has dropped to 1.2% as of late 2025, making floating packages cheaper upfront.
Floating loans suit risk-tolerant investors or those expecting rate cuts, like the projected drop to 2.6% by end-2025. Types include 3M/6M SORA + bank spread (e.g., +0.32% at DBS). Monitor live 3M and 6M SORA on Homejourney's dashboard to time your application perfectly.
The chart below shows recent interest rate trends in Singapore, highlighting SORA movements and bank package shifts:
As the chart illustrates, SORA's decline has narrowed the gap between fixed and floating, boosting floating appeal for savvy borrowers.
Fixed vs Floating Rate: Pros, Cons & Comparison Table
Fixed offers stability but misses rate drops; floating saves money in low-rate environments but risks surges. In 2026, four in five OCBC customers chose fixed for peace of mind, per bank data. Use this mortgage rate comparison to decide:
| Feature | Fixed Rate Mortgage | Floating Rate Loan |
|---|---|---|
| Rate Stability | Fixed for 1-5 years | Fluctuates with SORA |
| Current Rates (2026) | ~1.5-2.5% (e.g., DBS 1.50% 3yr) | 3M SORA + 0.3-0.5% (~1.5-1.8%) |
| Best For | Budgeters, risk-averse | Rate optimizers |
| Risk | Missed savings if rates fall | Higher payments if rates rise |
For a S$500,000 loan, switching to fixed could save S$4,100 yearly vs older floating, says OCBC. Compare side-by-side on Homejourney for DBS, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and others.
Current Bank Rates: Singapore 2026 Comparison
Major banks' packages: DBS offers 1.50% fixed 3yrs (switchable to 3M SORA +0.32%), OCBC fixed with growing demand for 5-year terms, UOB competitive SORA floats. Spreads range 0.3-0.5% over SORA; fixed starts higher but evens out. Refinancers saved via shorter lock-ins amid lows.
- DBS: 1.50% fixed, up to $2,800 cash rebate on refinance.
- OCBC: Popular 5yr fixed, 7x refinance surge in 2025.
- UOB/HSBC: SORA + low spreads, penalty waivers.
Visit Homejourney bank rates for live updates—no need to shop around. Our multi-bank submission sends one app via Singpass for personalized offers.
Decision Framework: Which to Choose?
- Assess Risk Tolerance: Conservative? Fixed. Optimistic on cuts? Floating.
- Review Economic Outlook: Low SORA favors floating; expect hikes? Lock fixed.
- Calculate Affordability: Use Homejourney's mortgage calculator for scenarios.
- Factor Fees: Lock-in penalties (30-day notice for some); refinancing costs.
- Plan Long-Term: HDB upgraders prioritize stability; investors chase yields.
Insider tip: Time floating apps post-Fed cuts, as Singapore tracks US trends. For full pillar coverage, see our Fixed vs Floating Rate Mortgages: Singapore Guide | Homejourney ">Fixed vs Floating Rate Mortgages: Singapore Guide.
FAQ: Fixed vs Floating Rate Mortgages
What is the current 3M SORA rate?
At 1.2% (Dec 2025 lows), plus bank spreads of 0.3-0.5% for floating loans. Track daily on Homejourney.
Fixed or floating better in 2026?
Fixed rules for stability (80% preference), but floating gains if rates stay low. Compare your profile first.
Can I switch from floating to fixed?
Yes, via refinance—Homejourney simplifies with one app to partners like DBS, OCBC. Check eligibility instantly.
How does SORA affect payments?
Directly: S$1M loan at 3M SORA +0.4% = ~S$4,200/month. Use our calculator for precision.
Is refinancing worth it now?
Yes for higher-rate holders; save thousands yearly. Apply securely via Homejourney with Singpass.
Disclaimer: Rates fluctuate; this is not financial advice. Consult Homejourney mortgage brokers or advisors. Data from MAS, banks (2026).
Ready to choose? Start your safe mortgage rate comparison on Homejourney bank rates, calculate payments, and apply to all major banks in minutes. Find budget-friendly properties via property search. Trust Homejourney for verified, transparent home financing.
