Singapore Interest Rate Trends and Mortgage Planning: The Definitive 2026 Guide

As Singapore's property market enters 2026, understanding interest rate trends has become essential for anyone planning to buy, refinance, or invest in property. With the Monetary Authority of Singapore (MAS) maintaining a unique approach to monetary policy and the Singapore Overnight Rate Average (SORA) reshaping how home loans work, the mortgage landscape is more dynamic than ever. This comprehensive guide by Homejourney—Singapore's most trusted property platform—breaks down everything you need to know about interest rates, rate forecasts, and how to plan your mortgage strategy in this evolving market.

Executive Summary: What You Need to Know About Singapore Interest Rates in 2026

Singapore's interest rate environment is undergoing significant changes heading into 2026. Here are the key takeaways that will shape your mortgage decisions:

• SORA is expected to bottom out in Q2 2026 at around 1.00%, before rising to approximately 1.39% by year-end, according to UOB forecasts[1]
• The benchmark SORA currently sits at 1.05%, down significantly from 3.41-3.82% in January 2024[2]
• Mortgage rates from major banks range from 1.35% (promotional fixed rates) to 1.78% for standard fixed-rate products[5]
• The US Federal Reserve is expected to cut rates twice in 2026, which will directly influence Singapore's SORA through global market dynamics[2]
• MAS maintains its unique currency-based monetary policy rather than a traditional policy rate, meaning SORA movements are driven by market forces and global conditions[2]

For property buyers and investors, this environment presents both opportunities and challenges. Understanding these trends is crucial for timing your mortgage application, choosing between fixed and floating rates, and optimizing your monthly payments. At Homejourney, we help you navigate these decisions with real-time data, transparent comparisons, and personalized guidance.

Table of Contents

1. Understanding SORA: Singapore's Benchmark Interest Rate
2. Interest Rate Trends and Forecasts for 2026
3. Fixed vs Floating Rate Mortgages: A Detailed Comparison
4. Current Mortgage Rates from Singapore Banks
5. How Interest Rates Impact Your Monthly Payments
6. Choosing Your Mortgage Strategy: A Decision Framework
7. Refinancing Strategy in a Changing Rate Environment
8. How Homejourney Helps You Master Mortgage Planning
9. Frequently Asked Questions About Singapore Interest Rates

Understanding SORA: Singapore's Benchmark Interest Rate

SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of borrowing transactions in Singapore's unsecured overnight interbank SGD cash market[7]. Unlike traditional central bank policy rates used in other countries, SORA represents actual market transactions between banks, making it a real-time reflection of Singapore's credit conditions.

The Monetary Authority of Singapore (MAS) does not set a policy interest rate like the US Federal Reserve or European Central Bank. Instead, MAS manages monetary policy through the Singapore dollar's nominal effective exchange rate (S$NEER), allowing the currency to appreciate or depreciate within an undisclosed band based on economic conditions[2]. This unique approach means that SORA is determined by market forces rather than direct central bank intervention, making it highly responsive to global interest rate movements and capital flows.

SORA is calculated daily from 8am to 6:15pm Singapore time and serves as the reference rate for most floating-rate home loans in Singapore. When you take out a floating SORA mortgage, your interest rate typically equals SORA plus a bank margin (usually 0.60% to 0.80%). As SORA changes, so does your monthly payment, making it crucial to understand SORA trends when planning your mortgage.

The Historical Context: SORA's Evolution

SORA was introduced in 2021 as a replacement for SIBOR (Singapore Interbank Offered Rate), which had been the standard for decades. The transition was driven by global regulatory reforms following the LIBOR manipulation scandal. SORA's transaction-based methodology makes it more transparent and harder to manipulate than SIBOR, providing better protection for borrowers.

In January 2024, SORA ranged between 3.41% and 3.82%, reflecting the higher interest rate environment that existed globally. By January 2026, SORA had compressed to a range of 0.93% to 1.45%, representing a dramatic 240+ basis point decline in just two years[2]. This compression has made floating-rate mortgages significantly more attractive for borrowers, though the direction of future rate movements remains uncertain.

3-Month SORA vs 6-Month SORA: Which Matters for Your Mortgage?

When shopping for SORA mortgages, you'll encounter two main variants: 3-Month SORA and 6-Month SORA. Here's what you need to know about each:

• 3-Month SORA resets quarterly, meaning your interest rate changes every three months. This provides more frequent adjustments to market conditions, so you benefit more quickly if rates fall, but you also face faster increases if rates rise.
• 6-Month SORA resets semi-annually, providing more payment stability with only two rate adjustments per year. Your payments change less frequently, which some borrowers prefer for budgeting certainty.

Most Singapore banks offer both options, with slightly different margins. Generally, 3-Month SORA carries a lower margin (0.60-0.70%) because it resets more frequently, while 6-Month SORA typically has a higher margin (0.70-0.80%) to compensate for longer reset periods. The choice depends on your risk tolerance and market outlook.

The chart below shows recent SORA trends to help you understand how rates have moved and what forecasters expect:

Interest Rate Trends and Forecasts for 2026

Understanding where interest rates are headed is critical for mortgage planning. Here's what the data tells us about Singapore's interest rate trajectory in 2026 and beyond.

UOB's Rate Forecast: The Most Likely Scenario

UOB, one of Singapore's largest banks, forecasts that SORA will bottom out in Q2 2026 (around April-June) at approximately 1.00%, before rising to 1.39% by year-end[1]. This forecast is based on expected US Federal Reserve rate cuts and global economic dynamics. The bottoming out represents a critical inflection point—after Q2, rates are expected to gradually increase throughout the second half of 2026.

This forecast has significant implications for mortgage planning. If you're considering a floating-rate mortgage, Q2 2026 represents a potential window of opportunity to lock in payments at historically low levels before rates begin rising. Conversely, if you're planning to refinance a fixed-rate mortgage to floating, you might want to wait until after Q2 when SORA stabilizes.

DBS's Rate Assumptions for 2026

DBS, Singapore's largest bank by assets, has based its 2026 financial guidance on several key assumptions about interest rates[2]. The bank assumes a benchmark local interest rate of 1.25% for 2026, two rate cuts by the US Federal Reserve, and a stronger Singapore dollar. These assumptions underpin DBS's expectations for net interest income and profitability in 2026.

The assumption of two US Fed rate cuts is particularly important because it directly influences SORA through global capital flows and currency movements. When the US Federal Reserve cuts rates, capital tends to flow toward higher-yielding markets like Singapore, which can put downward pressure on SORA. This is why US monetary policy is so critical for Singapore mortgage planning.

Long-Term Rate Projections: 2027 and Beyond

Looking beyond 2026, Trading Economics' econometric models project that SORA will trend around 1.50% in 2027[3]. This suggests that after bottoming in Q2 2026, rates will gradually normalize toward a mid-range level rather than returning to the 3%+ levels of 2024-2025. This moderate long-term outlook is consistent with expectations for slower global economic growth and a more balanced interest rate environment.

What Drives SORA: The Global Connection

SORA doesn't move in isolation—it's heavily influenced by global interest rates, particularly US rates. When the US Federal Reserve raises rates, capital flows out of Singapore toward higher US yields, which puts upward pressure on SORA. Conversely, when the Fed cuts rates, capital flows into Singapore, pushing SORA lower.

Additionally, currency movements affect SORA. A stronger Singapore dollar makes SGD-denominated assets less attractive to foreign investors, which can put upward pressure on SORA to compensate. The search results note that DBS expects a stronger Singapore dollar in 2026, which could provide some headwind to SORA declines despite US rate cuts[2].

Fixed vs Floating Rate Mortgages: A Detailed Comparison

One of the most important decisions in mortgage planning is choosing between a fixed-rate and floating-rate mortgage. Each has distinct advantages and disadvantages that depend on your personal circumstances, risk tolerance, and market outlook.

Fixed-Rate Mortgages: Payment Certainty and Protection

A fixed-rate mortgage locks in an interest rate for a specified period—typically 1, 2, 3, or 5 years. During this period, your monthly payment remains constant regardless of how SORA or other market rates change. Currently, Singapore banks are offering fixed rates in the 1.35% to 1.78% range, with promotional rates as low as 1.35% for qualified borrowers[5].

Advantages of fixed-rate mortgages:

• Payment certainty—your monthly mortgage payment is locked in, making budgeting easier
• Protection against rate increases—if rates rise sharply, your payment doesn't change
• Peace of mind—no need to monitor SORA movements or worry about payment shocks
• Easier financial planning—you can confidently commit to a mortgage amount knowing your payment won't increase

Disadvantages of fixed-rate mortgages:

• Higher initial rates—fixed rates are typically 0.20-0.40% higher than floating rates to compensate banks for rate risk
• No benefit from rate decreases—if SORA falls, your payment stays the same
• Refinancing costs—switching to a lower rate typically involves legal fees, valuation fees, and potential early repayment penalties
• Opportunity cost—in a declining rate environment, you're paying more than necessary

Floating-Rate Mortgages: Flexibility and Potential Savings

A floating-rate mortgage ties your interest rate to SORA plus a bank margin. As SORA changes, your interest rate and monthly payment adjust accordingly. With SORA currently at 1.05% and typical bank margins of 0.60-0.80%, floating rates are currently in the 1.65-1.85% range—significantly lower than fixed rates[2][3].

Advantages of floating-rate mortgages:

• Lower initial rates—floating rates are typically 0.20-0.40% lower than fixed rates
• Benefit from rate decreases—as SORA falls, your monthly payment decreases automatically
• Simplicity—no refinancing needed to take advantage of lower rates
• Transparency—your rate is directly tied to a published benchmark (SORA), with no hidden calculations

Disadvantages of floating-rate mortgages:

• Payment uncertainty—your monthly payment can increase if SORA rises
• Budget risk—if rates rise significantly, your payment could increase by hundreds of dollars per month
• Psychological stress—you need to monitor SORA movements and market conditions
• Rate shock risk—if you're not prepared for increases, rising rates could strain your finances

Fixed vs Floating: Side-by-Side Comparison Table

The Current Market Preference: A Split Decision

In 2026, borrower preferences remain split between fixed and floating rates[5]. Risk-averse buyers lean toward fixed rates for payment certainty, particularly those with tight budgets or uncertain income. Others choose floating loans to benefit from further SORA easing, particularly those with stable income and financial flexibility. The choice ultimately depends on your personal circumstances, risk tolerance, and economic outlook.

Current Mortgage Rates from Singapore Banks

As of February 2026, Singapore's major banks offer a range of mortgage products at competitive rates. Here's what you need to know about current offerings from the banks you'll encounter when shopping for a home loan.

DBS Bank Mortgage Rates

DBS, Singapore's largest bank, offers fixed-rate home loans in the 1.50% to 1.78% range, with promotional rates as low as 1.35% for qualified borrowers[5]. DBS also offers floating SORA-based mortgages with competitive margins. The bank recently introduced tighter spreads and flexible repricing options to attract borrowers actively comparing loan packages[5].

DBS has also strengthened its deposit base significantly, with S$64 billion in deposit inflows in 2025—the highest in the bank's history[2]. This strong deposit position allows DBS to offer competitive mortgage rates while maintaining healthy profitability.

Other Major Banks: OCBC, UOB, HSBC, Standard Chartered

While specific rates for other banks aren't detailed in current data, Singapore's mortgage market is highly competitive. OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB Bank, and other lenders all offer competitive fixed and floating rate products. The spread between banks is typically narrow—usually within 0.05-0.10% for the same product type.

At Homejourney, you can compare rates from all major banks side-by-side on our bank rates page. This allows you to see exactly which bank offers the best rate for your situation without visiting multiple bank websites or branches.

How Bank Margins Work on Floating Rates

When comparing floating-rate mortgages, it's crucial to understand that your total interest rate equals SORA plus the bank's margin. For example, if SORA is 1.05% and a bank offers a margin of 0.70%, your total rate would be 1.75%. Different banks may offer different margins based on your credit profile, income, and loan-to-value ratio.

A lower margin can save you thousands of dollars over the life of your loan. On a S$500,000 mortgage, a 0.10% difference in margin equals about S$500 per year in interest savings. This is why comparing margins across banks is so important.

How Interest Rates Impact Your Monthly Payments

Understanding how interest rate changes translate into monthly payment changes is essential for mortgage planning. Let's work through some concrete examples.

The Monthly Payment Formula

Your monthly mortgage payment is calculated using this formula:

Monthly Payment = [Loan Amount × (Interest Rate/12) × (1 + Interest Rate/12)^n] / [(1 + Interest Rate/12)^n - 1]

Where n = total number of monthly payments (loan tenure in years × 12)

This formula shows that monthly payments are highly sensitive to interest rates, especially on large loans. A small change in interest rate can result in significant monthly payment changes.

Real-World Example: How SORA Changes Affect Your Payment

Let's say you're buying a HDB flat for S$500,000 with a 25-year mortgage on a floating SORA + 0.70% loan:

• At SORA 1.05%: Total rate = 1.75%, Monthly payment = S$2,279
• At SORA 1.39% (UOB's year-end forecast): Total rate = 2.09%, Monthly payment = S$2,430
• At SORA 2.00% (potential scenario): Total rate = 2.70%, Monthly payment = S$2,680

This example shows that a 0.95% increase in SORA (from 1.05% to 2.00%) would increase your monthly payment by S$401, or about 18%. For borrowers with tight budgets, such increases could create financial stress.

Fixed Rate Stability: The Predictability Advantage

With a fixed-rate mortgage at 1.50% for the same S$500,000 loan over 25 years, your monthly payment would be locked at S$2,216 for the entire fixed-rate period. Even if SORA rises to 2.50%, your payment remains S$2,216. This predictability is valuable for budgeting and financial planning, particularly for borrowers with limited financial flexibility.

Choosing Your Mortgage Strategy: A Decision Framework

With so many options available, how do you choose the right mortgage strategy for your situation? Here's a framework to guide your decision.

Step 1: Assess Your Risk Tolerance

The first question to ask yourself is: How comfortable are you with payment uncertainty? If a sudden S$200-300 increase in your monthly mortgage payment would strain your finances, you're better suited for a fixed-rate mortgage. If you have financial flexibility and can absorb payment increases, floating rates offer better value.

Step 2: Evaluate Your Income Stability

Consider your employment situation and income prospects. If you have stable, predictable income (e.g., permanent government or corporate employment), floating rates are less risky. If your income is variable (e.g., commission-based, freelance, or business income), fixed rates provide more security. Lenders also consider income stability when assessing your borrowing capacity.

Step 3: Consider Your Time Horizon

How long do you plan to keep the property? If you're planning to sell or upgrade within 5-7 years, a floating rate might make sense because you'll refinance or sell before rates rise significantly. If you're planning to hold the property long-term (10+ years), fixed rates provide more certainty over the full holding period.

Step 4: Analyze the Rate Environment

What's the current rate environment and where are rates headed? In early 2026, with SORA expected to bottom out in Q2 before rising later in the year, there's a case for floating rates in the near term, but fixed rates provide protection against mid-to-late 2026 increases. The UOB forecast of SORA rising to 1.39% by year-end suggests that locking in fixed rates before Q2 could be prudent.

Step 5: Calculate the Breakeven Point

Compare the total interest paid under fixed vs floating scenarios. With fixed rates currently 0.20-0.40% higher than floating rates, you break even when SORA rises above the fixed rate. For example, if you're comparing a 1.50% fixed rate to floating SORA + 0.70% (currently 1.75%), you break even when SORA reaches 0.80%—which is below current levels. This suggests floating rates offer better value in the current environment, but this could change if SORA rises significantly.

Decision Matrix: Which Option Suits You?

Refinancing Strategy in a Changing Rate Environment

If you already have a mortgage, the changing rate environment in 2026 presents opportunities to refinance and potentially save money. Here's what you need to know.

When Refinancing Makes Sense

Refinancing typically makes sense when:

• Interest rates have fallen by at least 0.50-0.75%, creating sufficient savings to justify refinancing costs
• You plan to hold the property long enough to recover refinancing costs through interest savings (typically 2-3 years)
• Your credit profile has improved, allowing you to qualify for better rates
• You want to switch from fixed to floating (or vice versa) to optimize your mortgage strategy

The Current Refinancing Opportunity

If you locked in a fixed rate of 2.00% or higher in 2024-2025, refinancing to current rates of 1.35-1.50% could save you significant money. On a S$400,000 mortgage, a 0.50% rate reduction equals about S$2,000 in annual interest savings. However, you'll need to account for refinancing costs (typically S$1,500-3,000 in legal fees, valuation fees, and processing costs).

Alternatively, if you're on a floating rate and rates are expected to rise later in 2026, locking in a fixed rate now might be prudent. The UOB forecast of SORA rising to 1.39% by year-end suggests that rates are unlikely to fall much further, making refinancing to fixed rates a reasonable strategy.

Refinancing Timing: The Q2 2026 Window

Based on UOB's forecast that SORA will bottom out in Q2 2026, this period represents a potential refinancing window. If you're considering switching from fixed to floating, Q2 offers the lowest floating rates you're likely to see in 2026. Conversely, if you want to lock in fixed rates before they rise, refinancing before Q2 might be prudent.

How Homejourney Helps You Master Mortgage Planning

At Homejourney, we understand that mortgage planning can be complex and stressful. That's why we've built tools and resources specifically designed to help Singapore property buyers and investors make confident, informed decisions about their mortgages.

Real-Time SORA Rate Tracking

Our bank rates page displays live 3-Month SORA and 6-Month SORA rates updated daily, so you always know the current benchmark rate. This real-time data helps you understand where rates are and track trends over time. You can see exactly how SORA has moved over the past week, month, and year, giving you context for your mortgage decisions.

Compare Rates from All Major Banks

Instead of visiting multiple bank websites or branches, you can compare mortgage rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB Bank, and other major lenders all in one place on Homejourney. Our comparison tool shows you fixed rates, floating rates, margins, promotional offers, and more—making it easy to see which bank offers the best deal for your situation.

Mortgage Calculator: Know Your Borrowing Power

Our mortgage calculator helps you understand how much you can borrow based on your income, existing debts, and the Total Debt Servicing Ratio (TDSR) limits set by MAS. You can instantly see how changing the loan amount, tenure, or interest rate affects your monthly payment. This helps you find the right balance between the property you want and the mortgage you can afford.

Multi-Bank Mortgage Application

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 2 (2026)
3. Singapore Property Market Analysis 5 (2026)
4. Singapore Property Market Analysis 7 (2026)
5. Singapore Property Market Analysis 3 (2026)