Singapore SORA Rate Outlook 2026 & Approval Tips | Homejourney

Singapore SORA Rate Outlook 2026: Quick Answer for Homeowners

For 2026, most market forecasts suggest SORA rates are likely to stay low by recent standards but are close to their floor, with expectations of a modest upward drift rather than another big plunge.[1][2][6] This means home loan rates in Singapore should remain relatively affordable compared to 2022–2023, but borrowers should not count on significantly cheaper mortgages than what banks are already offering heading into 2026.[1][2][6]

At the same time, banks are becoming more selective as they price in income stability, debt levels, and property risk. From what we are seeing across Homejourney users, the borrowers who get the best SORA-pegged packages in 2026 are the ones who prepare early: they manage their Total Debt Servicing Ratio (TDSR), clean up their credit, and submit complete, verifiable documents via Singpass.

This article is a focused follow-up to our main outlook guide, “Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney” Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney . Here, we zoom in on two things:

Singapore SORA Rate Outlook 2026 – with 3M & 6M SORA implications for your mortgage
How to improve your home loan approval chances and secure better spreads in a low-but-stable rate environment

Understanding SORA, 3M & 6M SORA in 2026

SORA, or the Singapore Overnight Rate Average, is the volume-weighted average rate of unsecured overnight interbank SGD transactions, published by MAS.[2] In practice, it is the key benchmark for many floating-rate home loans in Singapore, replacing SIBOR.

Most banks quote packages as “3M compounded SORA + spread” or “6M compounded SORA + spread”. The 3M SORA resets every three months based on the past three months’ compounded overnight SORA, while 6M SORA resets every six months. In 2025, for instance, market data showed 3M SORA and 6M SORA in the low 2%–3% range as they eased down from the 2023–2024 peak.[3][4]

The key difference for homeowners is this:

3M SORA tends to track changes faster, giving you quicker benefit when rates fall – but also quicker pain when rates rise.
6M SORA is slower to move, which can give you a bit more payment stability in a choppy environment.

The chart below shows recent interest rate trends in Singapore to help you visualise how benchmarks have moved and why banks now say SORA may be nearing its floor.[2][6]

According to MAS-linked data and market models, SORA is projected to stabilise around the 1%–1.5% range in the mid-2020s, with Trading Economics’ econometric models projecting SORA around 1.5% by 2027.[2] UOB’s research similarly suggests SORA could bottom near 1% in 2026 before gradually rising toward the 1.3%–1.4% region by end-2026.[1] Channel NewsAsia has also reported that SORA has dropped to multi-year lows and may already be near its floor.[6]

Singapore SORA Rate Outlook 2026: What It Means for Home Loans

Putting the different forecasts together, the Singapore SORA rate outlook for 2026 points to:

Low but not “ultra-cheap” borrowing costs compared with pre-2022 levels, as global rates normalise.[1][2][6]
Limited room for further large declines unless there is a severe global downturn.[1][6]
Possible mild upward drift in the later part of 2026 as growth normalises and inflation edges slightly higher within MAS’ 0.5–1.5% band.[2][7]

In day-to-day terms for a typical family buying a 4-room resale HDB in Toa Payoh or Tampines (around S$650,000–S$750,000 depending on age and proximity to MRT), this means:

Your monthly instalment is unlikely to collapse further versus what banks are already quoting today; the big relief has already come compared with 2023’s peak.
But you also don’t need to panic about a sudden spike like we saw in 2022–2023, barring a major external shock.

For investors holding a 2-bedroom condo in city-fringe areas like Queenstown or Geylang, where loan sizes are usually larger (S$900,000–S$1.2 million), the 2026 SORA outlook makes a strong case for:

Reviewing refinancing options early to lock in tighter spreads while competition between banks is still strong.[5][6]
Prioritising approval certainty (income proof, rental track record, lower gearing) so that you are eligible for the more attractive promotional packages.

You can track live 3M and 6M SORA movements and see how they translate into actual bank packages on Homejourney’s bank rates page: Bank Rates .

Fixed vs Floating in a 2026 SORA Environment

Because SORA has already fallen significantly from its peak and may be near its floor, the fixed vs floating decision in 2026 looks quite different from 2023. Based on current market trends:[6]

Floating (SORA-pegged) packages are attractive if you believe rates will stay near current levels or move only slightly higher.
Fixed-rate packages can appeal if you prioritise absolute payment certainty over every last basis point of savings.

Below is a simplified comparison to frame your decision:

Feature	Fixed-Rate Package	Floating (3M / 6M SORA) Package
Rate movement	Locked for 2–5 years	Moves with 3M or 6M compounded SORA
Short-term monthly payment	More predictable	Can change every 3 or 6 months
Benefit if SORA falls further	No – you stay at your fixed rate	Yes – your instalment can fall at next reset
Risk if SORA rises faster than expected	Protected during lock-in	Higher monthly instalments
Best suited for	Families on tight budgets, retirees	Young buyers with income growth, investors

To see what this means in dollars, use Homejourney’s mortgage calculator at Bank Rates or Mortgage Rates . For example, on a S$700,000 loan over 25 years, a 0.25% change in rate can easily swing your monthly instalment by S$80–S$100. Testing different SORA and fixed-rate scenarios will show you what level of fluctuation you are comfortable with.

How SORA Forecasts Affect Your Approval Chances

Banks in Singapore are fully aware of the SORA forecast for 2026 and price their products accordingly. But your approval depends less on where SORA itself is, and more on how your profile looks under MAS rules – especially TDSR and MSR for residential properties.

In practice, loan officers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank and other banks on Homejourney’s panel look at:

Stress-tested instalment: Even if 3M SORA is around 1%–1.2%, banks often assess affordability at a higher stressed rate to buffer against future increases.
Total Debt Servicing Ratio (TDSR): Your total monthly debt obligations (including the new loan) cannot exceed 55% of your gross monthly income under MAS rules for private property.
Mortgage Servicing Ratio (MSR) for HDB and certain ECs: Capped at 30% of your gross monthly income.
Credit behaviour and CPF usage: Late payments, overuse of unsecured credit, or maxed-out CPF Ordinary Account can all reduce your approval odds.

Because SORA is expected to be relatively stable, banks may place more emphasis on income stability and document verification than on rate volatility. This is where using Singpass/MyInfo via Homejourney gives you an advantage: it allows banks to verify your income, CPF contributions and employment instantly, which reduces manual errors and speeds up approvals.

7 Practical Ways to Improve Home Loan Approval Chances in 2026

Based on patterns we see across real applications on Homejourney – from couples buying their first BTO in Punggol to upgraders moving from a 4-room HDB in Jurong to an OCR condo – the borrowers who secure smoother approvals tend to follow these steps:

1. Right-size your budget using TDSR and MSR before you shop

Instead of starting with the property price, start with how much banks will realistically lend you. Use Homejourney’s eligibility and affordability calculator at Bank Rates or Mortgage Rates to estimate your maximum loan size under TDSR and, where applicable, MSR.

As a rule of thumb, if your gross household income is S$9,000 and you already have S$600 of car loan instalments and S$200 of credit card instalments each month, your total debts are S$800. Under a 55% TDSR limit (S$4,950), banks will use the remaining headroom (roughly S$4,150) to stress-test your home loan instalment. This often surprises buyers who initially aim for larger units in mature estates like Bishan or Queenstown, only to learn they need to scale back slightly or increase their cash/CPF downpayment.

2. Clean up your credit record 6–12 months before applying

In Singapore, your credit bureau report (maintained by Credit Bureau Singapore) is a crucial part of underwriting. Before you apply, consider:

Paying all bills on time for at least 6–12 months – including telco bills and BNPL arrangements.
Reducing unused credit limits if you have multiple credit cards with high limits.
Avoiding new large unsecured loans (e.g. personal loans) right before you submit a mortgage application.

From our experience with Homejourney users in areas like Sengkang and Woodlands, a cleaner credit profile not only raises approval odds but can also make some banks more comfortable offering slightly tighter spreads over SORA.

3. Stabilise your income – especially for self-employed and commission earners

For salaried employees along the CBD and one-north corridor, banks usually take the latest 3–6 months’ payslips and CPF contributions as a guide. For self-employed borrowers (e.g. F&B owners in Serangoon Gardens or online sellers based in industrial units around Ubi) or those with variable commissions, banks often average out the last 12 months or even 2 years of income using IRAS Notice of Assessment.

To improve your approval odds:

Declare your income accurately and consistently to IRAS for at least 2 years.
Avoid big unexplained drops in declared income right before your application.
Document rental income clearly with tenancy agreements and stamped leases, if you are using investment property income.

Submitting via Singpass/MyInfo through Homejourney allows partner banks like DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB and others to retrieve your IRAS and CPF data directly, which shortens processing time and reduces back-and-forth.

4. Reduce other debts before locking in a SORA package

Even in a low SORA environment, banks must stress-test your loan. Reducing other debts directly improves your TDSR position. Before you confirm your Option to Purchase (OTP):

Clear small personal loans and high-interest credit card balances where possible.
Consider paying down your car loan if the instalment is large relative to your income.
Avoid new hire purchase commitments (e.g. big-ticket furniture instalments) until after your loan is approved.

Many Homejourney buyers in suburbs like Yishun and Bukit Panjang tell us that simply clearing S$300–S$500 in monthly instalments was the difference between qualifying for a 3-bedroom instead of a 2-bedroom unit.

5. Prepare for higher stress-test rates than current SORA

Although SORA rate forecasts for 2026 suggest stability in the 1%–1.5% band,[1][2] banks may still test your affordability at a higher internal rate to build in safety buffers. When using Homejourney’s calculator at , run scenarios at rates 1%–1.5% higher than current packages to see if you can still comfortably afford the instalment.

If your budget becomes too tight at these stress levels, consider: