Lock in Fixed Rate Now 2026? Homejourney's Bank Rate Comparison Guide

Should You Lock in a Fixed Rate Mortgage Now in 2026? A Data-Driven Analysis

Yes, locking in a fixed rate mortgage in early 2026 remains strategically advantageous for most Singapore homeowners, as rates have fallen to three-year lows and further declines are expected to be modest. With fixed-rate packages now ranging from 1.4% to 1.8% depending on loan quantum—nearly half the 3.1% rates at the start of 2025—the window for securing predictable, long-term repayment certainty is particularly attractive before competition for market share normalizes beyond the first quarter of 2026.[1]

This cluster guide helps you understand the current mortgage landscape and provides a practical framework for deciding whether fixing your rate now aligns with your financial goals. Whether you're a first-time buyer, refinancing your HDB loan, or upgrading your property, the decision between fixed and floating rates depends on factors beyond just interest rates—including your risk tolerance, long-term financial plans, and individual circumstances.

Current Singapore Mortgage Rates: Where We Stand in 2026

Singapore's mortgage market has experienced a dramatic shift in 2025. Fixed-rate home loans have declined from approximately 3.1% at the start of the year to between 1.4% and 1.8% as of December 2025, representing a nearly 50% reduction.[1] This sharp downtrend reflects the US Federal Reserve's easing cycle, which Singapore banks closely follow.

The three-month compounded Singapore Overnight Rate Average (SORA)—which underpins floating-rate mortgages—has fallen from 3% in early January to 1.2% by mid-December, reaching its lowest level since August 2022.[1] For HDB borrowers, the concessionary HDB loan rate remains fixed at 2.6%, pegged at 0.1% above the CPF Ordinary Account rate, making bank financing increasingly attractive for refinancing existing HDB loans.

Looking ahead to 2026, the Federal Reserve's latest policy signals suggest only marginal easing. New projections indicate just one 0.25% rate cut in 2026, and Fed Chair Jerome Powell has indicated that rate hikes are unlikely.[1] This means further significant declines in Singapore mortgage rates are unlikely, making the current environment particularly favorable for locking in rates before any potential stabilization.

Fixed Rate vs Floating Rate: Which Strategy Suits You?

Understanding Your Options

Fixed-rate mortgages lock your interest rate for a specified period (typically 2-5 years), after which your loan may revert to a floating rate or require repricing. Current fixed packages are available at rates between 1.4% and 1.8% for two-year terms, providing complete certainty over your monthly repayments.[1]

Floating-rate mortgages are pegged to the three-month SORA plus a bank spread (typically 0.8% to 1.6%), meaning your monthly payment fluctuates as SORA moves. While current floating rates are competitive, they expose you to future rate increases if economic conditions change.

The Case for Locking in Fixed Rates Now

Four compelling reasons support fixing your rate in early 2026:

Rates are at three-year lows with limited downside. Experts suggest SORA may have "found a floor," and current rates likely reflect most of the expected US easing.[1] Further cuts are expected to be marginal.
Budgeting certainty for long-term planning. Four in five bank customers in 2025 opted for fixed packages, with OCBC and DBS reporting strong demand, particularly among new homeowners seeking repayment predictability.[1]
Protection against economic uncertainty. While rate hikes are unlikely in 2026, locking in protects you against unexpected economic shocks or policy changes beyond current forecasts.
First-quarter competitive packages. Banks typically intensify competition for market share in Q1 2026, offering legal subsidies, cash rebates, and favorable terms to attract borrowers.[1]

When Floating Rates Might Appeal

Floating rates could be suitable if you have high risk tolerance, expect to refinance or sell within 2-3 years, or possess strong financial reserves to absorb potential payment increases. However, mortgage advisers emphasize that most homeowners prioritize the stability and peace of mind that fixed rates provide, especially in uncertain economic environments.[1]

Bank Rate Comparison: Who Offers the Best Deals?

Singapore's major banks are actively competing for mortgage market share with increasingly attractive packages. As of late 2025, competitive fixed-rate options include:

DBS Bank: Offers two-year fixed packages at 1.6% with no penalty for early repayment or sale during lock-in periods on POSB HDB loans. Three-year fixed at 1.55% also available. DBS saw a 13x increase in HDB-to-bank loan switches in October-November 2025 compared to early-year levels.[1]
OCBC Bank: Competitive fixed packages with flexible repayment options. OCBC reported a seven-fold increase in HDB-to-bank switches during the first 11 months of 2025, with homeowners saving up to S$4,100 annually on S$500,000 loans by switching to five-year fixed packages.[1]
UOB, HSBC, Standard Chartered, Maybank, and other major lenders: All offering competitive fixed-rate packages in the 1.4-1.8% range with varying terms and conditions.

Rather than manually contacting each bank, use Homejourney's bank rates comparison page to view current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major banks side-by-side. This ensures you're comparing the most current offerings and can identify which bank offers the best terms for your specific loan quantum and tenure preference.

The HDB-to-Bank Switch: A Strategic Opportunity in 2026

One of 2025's most significant trends is HDB flat owners switching to bank financing. With bank mortgage rates now substantially lower than the HDB concessionary rate of 2.6%, this represents a genuine opportunity to reduce your long-term interest costs.[1]

Consider this real example: A homeowner with a S$500,000 HDB loan at 2.6% switching to a five-year fixed bank package at approximately 1.6% would save approximately S$4,100 annually in interest payments.[1] Over a five-year period, that's S$20,500 in savings—substantial money that could be redirected toward investments, home improvements, or financial security.

Important considerations before switching: You cannot return to HDB financing after switching to a bank loan, so ensure this aligns with your long-term plans. Additionally, factor in refinancing costs including legal fees, valuation fees, and administrative charges. Most homeowners find that these costs are recouped within 18-24 months through interest savings, making the switch economically sound.[1]

Mortgage advisers recommend switching when your current HDB lock-in period ends to avoid early repayment penalties. Use Homejourney's mortgage calculator to determine your exact savings before committing to a refinance.

Making Your Decision: A Practical Framework

Step 1: Assess Your Risk Tolerance

Ask yourself: Can I comfortably absorb a potential 1-2% increase in monthly mortgage payments? If yes, floating rates offer flexibility. If no, fixed rates provide essential peace of mind. Most Singapore homeowners prefer fixed rates for budgeting certainty.[1]

Step 2: Evaluate Your Time Horizon

How long do you plan to own this property? If you're likely to sell or refinance within 2-3 years, the fixed-rate lock-in period may not align with your plans. Conversely, if you're building long-term wealth through property ownership, fixing your rate protects you across multiple economic cycles.