Singapore Interest Rate Trends and Mortgage Planning: Frequently Asked Questions
Singapore's interest rates have fallen sharply in 2025, with 3-month SORA at 1.2% as of late 2025 and fixed home loans between 1.4-1.8%, creating opportunities for buyers and refinancers.[3]
At Homejourney, we prioritize your financial safety by providing verified rate data and tools to compare DBS, OCBC, UOB, and more. This FAQ cluster connects to our pillar guide on Singapore Interest Rate Trends & Mortgage Planning 2026 Guide for deeper insights.Singapore Interest Rate Trends & Mortgage Planning 2026 Guide
What is SORA and How Does It Impact Your Mortgage?
SORA, or Singapore Overnight Rate Average, is the key benchmark for most floating home loans in Singapore. Published daily by the Monetary Authority of Singapore (MAS), it reflects the volume-weighted average rate of unsecured overnight interbank SGD cash market transactions from 8am to 6.15pm.[9]
Banks peg loans to 3-month or 6-month compounded SORA plus a spread (typically 0.25-0.7%). For example, with 3M SORA at 1.2%, a 0.5% spread means a total rate of 1.7%.[3]
This shift from older benchmarks like SOR and SWAP offers provides greater transparency. Track live 3M and 6M SORA rates updated daily on Homejourney's bank rates page to plan repayments accurately.
Singapore Interest Rate Trends: What the Data Shows
SORA dropped from 3% in early 2025 to 1.2% by December, driven by high domestic liquidity and US Fed rate cuts. Fixed rates followed, halving from 3.1% to 1.4-1.8%.[3]
Economists forecast SORA at around 1.00% in 2026 and 1.50% in 2027, with MAS likely maintaining policy amid 2.3% GDP growth and steady 1.5% inflation.[1][2]
The chart below shows recent interest rate trends in Singapore, highlighting 6-month SORA movements:
As visible, rates have stabilized at lows, but volatility could arise from global factors like US policy.[3]
Fixed vs Floating Rates: Which is Right for You?
Fixed rates lock in for 2-5 years (e.g., DBS 3-year fixed at 1.55%), ideal for risk-averse buyers.[3] Floating SORA loans offer flexibility but fluctuate monthly.
| Type | Pros | Cons | Best For |
|---|---|---|---|
| Fixed | Predictable payments; peace of mind | Higher initial rates; lock-in penalties | First-time HDB buyers |
| Floating (SORA) | Lower current rates; no lock-in | Rate rise risk | Refinancers, investors |
Compare current packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, and Citibank side-by-side on Homejourney.
Mortgage Rate Forecast for 2026: Rate Prediction
With Fed easing slowing to one quarter-point cut, SORA may floor at current lows, but MAS could tighten if inflation rises above 1.5%.[1][3]
CPF OA stays at 2.5% floor (Q1 2026), making bank loans cheaper than HDB's 2.6%.[3][5] Expect banks to compete with rebates in Q1.
Use Homejourney's mortgage calculator to model scenarios: For a $800,000 HDB loan at 1.7%, monthly payments are ~$3,500 over 25 years.
Actionable Mortgage Planning Steps
- Assess Risk Tolerance: Conservative? Opt fixed. Flexible? Choose SORA.
- Compare Rates: Visit Homejourney bank-rates for real-time quotes from all major banks.
- Calculate Affordability: Input income via Singpass on our calculator for instant eligibility.
- Apply Multi-Bank: Submit one form; get offers from partners. Brokers provide free guidance.
- Refinance if Eligible: Bank rates now beat HDB—switch before rates rebound. Note: No return to HDB loans.[3]
For properties in budget, search Homejourney property search. Post-purchase, check aircon services for maintenance.
Frequently Asked Questions
Will interest rates rise in 2026?
Likely stable at ~1.0% SORA, but MAS may adjust for inflation or growth. Track via Homejourney.[1][2]
Should I refinance from HDB to bank loan?
Yes, if rates stay below 2.6%. Savings: ~$300/month on $500k loan. Use our tools; consult brokers.[3]
How do I choose between 3M and 6M SORA?
3M more volatile but potentially lower; 6M smoother. Compare on bank-rates.[9]
What are current best mortgage rates?
Fixed: 1.4-1.8%; SORA floating: 1.45-1.95% (SORA + spread). Verified daily on Homejourney.[3]
Is now a good time to buy property?
Yes, with low rates and 2.3% growth forecast. Verify eligibility first via our calculator.[1]
Disclaimer: Rates fluctuate; this is not financial advice. Consult professionals. Homejourney verifies data for your trust and safety.
Ready to plan? Start with Homejourney bank-rates—compare, calculate, apply securely via Singpass. For full guidance, read our pillar: Singapore Interest Rate Trends & Mortgage Planning 2026.
