Singapore Mortgage Interest Rate Forecast 2026: What to Expect & How to Improve Approval Chances
Singapore's mortgage rates are forecasted to stabilise around 1-1.8% in 2026, with SORA bottoming out near 1% by Q2 before a slight rise to 1.39% by year-end.[2][1]
At Homejourney, we prioritise your safety and trust by providing verified rate data and tools to compare options from DBS, OCBC, UOB, and more. This cluster article dives into the mortgage rate forecast 2026 and shares tactical steps to enhance loan approval odds, linking back to our pillar guide on Singapore home financing.
Current Mortgage Rates and 2026 Forecast
As of early 2026, fixed-rate home loans range from 1.45% to 1.55% for 2-3 year lock-ins across major banks like OCBC (1.45% for 3 years), SCB (1.45% for 2 years), and DBS (1.55% for 2 years).[3]
SORA, the key benchmark for floating rates, has dropped to 1.2%, its lowest since 2022, driving rates down from 3.1% at the start of 2025.[1] UOB predicts SORA will stabilise around 1% by Q2 2026, influenced by modest US Fed cuts (one-quarter point expected), before edging up to 1.39%.[2]
Experts note rates may have found a floor, with further declines modest unless economic shocks occur.[1] Bank competition will keep packages attractive, especially in Q1, with perks like cash rebates.
The chart below shows recent interest rate trends in Singapore, highlighting SORA's decline and fixed-rate movements:
From the chart, SORA's drop from 3% to 1.2% underscores the interest rate prediction Singapore 2026 of stability with mild upside risks.[1][2]
SORA Prediction 2026: 3M vs 6M and Impact on Payments
SORA (Singapore Overnight Rate Average) is the volume-based overnight rate published daily by MAS, replacing older benchmarks for transparency.
3M compounded SORA tracks short-term market funding, ideal for responsive loans, while 6M SORA offers slight stability but lags changes. Most banks peg floating rates to 3M SORA plus a 0.45-0.78% spread.[4]
For a S$500,000 loan at 1.2% SORA + 0.5% spread (1.7% total), monthly payments are about S$2,300 over 25 years. If SORA rises to 1.39%, payments increase by ~S$100 monthly.[1]
Track live 3M and 6M SORA updates daily on Homejourney's bank rates page to time your application perfectly.
Fixed vs Floating Rates: Which for 2026 Outlook?
| Type | Pros | Cons | Best For |
|---|---|---|---|
| Fixed (1.45-1.8%) | Payment certainty; no volatility | Higher initial rate; lock-in penalties | Risk-averse buyers, HDB upgraders |
| Floating (SORA + spread) | Lower starting rates; flexible | Rate fluctuation risks | Investors expecting stability |
With rate outlook 2026 pointing to a bottom then slight rise, fixed suits those locking in lows; floating benefits if rates hold.[1][4] Compare side-by-side on Homejourney from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others.
Mortgage Rates Going Up or Down in 2026?
Rates are unlikely to fall much further after 2025's sharp drop but won't spike without shocks.[1] HDB loans at 2.6% (CPF OA + 0.1%) are now pricier than banks, prompting switches—OCBC saw 7x growth in 2025.[1]
For example, a S$500k HDB loan saves S$4,100 yearly switching to OCBC's 5-year fixed.[1] Refinancers like Ms Denise Chan halved her rate to 1.6% at DBS, saving S$500 monthly.[1]
Positioned as your trusted partner, Homejourney verifies data for confident decisions. See our pillar on Singapore Mortgage Rate Forecast 2026: What to Expect | Homejourney ">Singapore Mortgage Rate Forecast 2026 for full trends.
How to Improve Mortgage Approval Chances in 2026
Boost odds under TDSR (60% debt cap) and MSR (30% for HDB) with these actionable steps:
- Optimise Debt Ratios: Pay down cards/Loans; aim <40% TDSR usage. Use Homejourney's mortgage calculator for simulations.
- Build Credit Score: Check via Singpass; fix errors 3-6 months ahead. Stable income from employers like DBS boosts profiles.
- Reduce LTV: Use more CPF/downpayment for <75% LTV (private) or <85% (HDB) to access better rates.
- Shop Competitively: Submit one app via Homejourney for offers from all partners—Singpass verifies income instantly.
- Time Right: Apply Q1 when promotions peak; connect with Homejourney Mortgage Brokers for personalised guidance.
For HDB upgraders in areas like Punggol, factor resale prices (avg S$600k) into budgets via Homejourney property search. Always consult professionals; rates subject to change.
Homejourney: Your Safe Path to Approval
Homejourney creates a trusted environment with transparent tools: compare DBS vs OCBC rates, calculate affordability, and apply multi-bank via Singpass. Link cooling measures impact via Cooling Measures 2026: Boost Mortgage Approval Odds | Homejourney ">Cooling Measures 2026: Boost Approval Odds.
FAQ: Singapore Mortgage Interest Rate Forecast 2026
What is the mortgage rate forecast 2026 in Singapore?
SORA ~1-1.39%, fixed 1.4-1.8%; modest stability post-2025 drop.[1][2]
Will mortgage rates go up or down in 2026?
Likely bottom Q2 then slight rise; large hikes unlikely.[1][2]
How does SORA prediction 2026 affect my loan?
Expect stable-low payments; track on Homejourney bank-rates.[4]
How to improve home loan approval chances?
Lower debts, strong credit, multi-bank apps via Homejourney for best odds.
Fixed or floating for 2026?
Fixed for certainty; floating if risk-tolerant—compare on Homejourney.
Ready to secure your rate? Visit Homejourney bank-rates for live comparisons, calculators, and fast approvals. Explore properties at property search within budget. For full insights, read our pillar: Singapore Mortgage Rate Forecast 2026: What to Expect | Homejourney ">Singapore Mortgage Rate Forecast 2026.
