Singapore SORA Rate Outlook 2026: Bank Rate Comparison Guide | Homejourney

Singapore’s SORA rate outlook for 2026 points to relatively low, stable interest rates, with major banks forecasting SORA to hover around 1% in mid‑2026 and about 1.3–1.4% by year-end, which is significantly lower than the 2.5–3% range seen in 2023–early 2024.[3][2] For homeowners, this means floating SORA-pegged home loans should stay affordable in 2026, but you still need to compare bank spreads, lock-in terms, and your own risk profile carefully.

This cluster article supports Homejourney’s main pillar, “Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney” Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney , by going deeper into bank rate comparison tactics, fixed vs floating choices, and a practical decision framework for Singapore buyers and owners.

What is SORA and Why It Matters for Singapore Homeowners in 2026

SORA (Singapore Overnight Rate Average) is the key benchmark rate used for many floating home loans in Singapore. It is the volume‑weighted average interest rate of unsecured overnight interbank SGD borrowing transactions between 8am and 6.15pm, calculated and published by MAS.[7] In simple terms, it reflects how expensive it is for banks to borrow from each other overnight in Singapore.

Most banks offer home loans pegged to 3M SORA or 6M SORA, plus a fixed spread (for example, 3M SORA + 0.75% p.a.). The SORA component moves with market conditions, while the spread is set by the bank. Your monthly instalment will rise or fall as SORA changes, usually every 3 or 6 months depending on your package.

According to market data, SORA averaged about 1.25% from 1988 to 2026.[2] After spiking above 3% around 2023, it has since fallen to roughly 1.0–1.2% in early 2026, and is forecast to be around 1.0% in Q2 2026.[2][3] This means current SORA-pegged packages are much more manageable than those locked in during the peak rate years.

The chart below shows recent interest rate trends in Singapore to help you visualise how SORA has moved in the past months:

Use this trend together with Homejourney’s live SORA tracking on the bank rates page Bank Rates to time your refinancing or new purchase decisions more safely.

Singapore SORA Rate Outlook 2026: Key Forecasts Buyers Should Know

Because MAS manages policy mainly through the Singapore dollar exchange rate, SORA is influenced by global interest rates (especially the US Fed) and domestic liquidity, rather than a fixed policy rate.[2] For 2026, several forecasts suggest a “bottoming out then gentle rise” pattern:

UOB forecast: SORA to stabilise around 1% by Q2 2026, then slowly climb to about 1.39% by end‑2026 as global conditions normalise.[3][1]
Trading Economics projection: SORA expected around 1.0% in early 2026, trending towards 1.5% by 2027.[2]
Macro backdrop: Singapore GDP growth is expected to moderate to around 2.0–2.6% in 2026, with core inflation roughly 0.5–1.5%, suggesting low but positive rates.[2][6]

On the ground, you can already see this shift: fixed and floating mortgage packages from banks like DBS, OCBC and UOB have moved down together with SORA, with some owners in mature estates such as Tampines or Ang Mo Kio seeing their monthly instalments fall by a few hundred dollars compared with 2023 peak levels.[5] However, many bankers and mortgage specialists believe SORA is close to its floor, so expecting it to drop dramatically below 1% may not be realistic.[5]

How this affects you:

If you are taking a new loan in 2026, you are likely entering at or near the lower part of the rate cycle.
If you are refinancing, there is a good chance that your new SORA‑pegged package will be cheaper than your existing one from the 2023–2024 high‑rate period.
Because rates are expected to edge up slightly towards 2027, locking in too short a fixed period may expose you to higher future rates.

For a more detailed macro view, you can also refer to market outlook coverage on Straits Times Housing News and CNA Property News , together with Homejourney’s SORA outlook pillar article Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney .

3M SORA vs 6M SORA in 2026: Which Should You Choose?

Most Singapore banks now offer home loans pegged to either 3‑month compounded SORA (3M SORA) or 6‑month compounded SORA (6M SORA). The main differences are in how often your rate resets and how quickly you “feel” changes in the market.

Key Differences Between 3M SORA and 6M SORA

3M SORA: Resets every 3 months. Your instalment reacts faster to rate changes. In a falling‑rate environment, you benefit earlier; in a rising‑rate environment, you feel the pain sooner.
6M SORA: Resets every 6 months. Changes are slower, giving more short‑term payment stability but you may lag when rates fall.
Spread (margin): Banks sometimes offer a slightly different spread for 3M vs 6M SORA. For example, one bank might offer 3M SORA + 0.75% vs 6M SORA + 0.80%. This difference can add up over a 25‑ or 30‑year loan.

In 2026’s environment of low, relatively stable SORA with a mild upward bias, the choice is often about your tolerance for short‑term fluctuation:

If you want faster benefit from any small further dips and don’t mind slightly more variability, 3M SORA could make sense.
If you prefer smoother instalments for family budgeting, 6M SORA offers more breathing room between resets.

On Homejourney’s bank rates page Bank Rates , you can track live 3M and 6M SORA, then compare how DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Hong Leong Bank, Public Bank, and Citibank price their spreads on each option side‑by‑side.

Fixed vs Floating in 2026: Which Mortgage Type Suits You?

With SORA near its projected floor in 2026, many buyers are asking whether to lock in a fixed rate or choose a SORA‑pegged floating package. Here is a clear comparison to help you decide.

Fixed vs Floating Home Loan Comparison (2026 Context)

Feature	Fixed‑Rate Package	SORA‑Pe gg ed Floating Package
Interest behaviour	Rate locked for 2–5 years; instalment predictable.	Moves with 3M or 6M SORA; instalment can change every reset period.
2026 typical rate level*	Often slightly higher than current SORA‑pegged effective rates, e.g. ~1.6–1.9% p.a. in early 2026 (illustrative).	Often closer to 3M/6M SORA + spread, e.g. ~1.3–1.7% p.a. depending on bank and package (illustrative).
Best for	Risk‑averse owners, families with tight cash flow, or large loans where small changes hurt.	Borrowers willing to accept some volatility in exchange for potentially lower average cost.
Key risk	May “overpay” if SORA stays low; penalties if you redeem or refinance during lock‑in.	Instalments could rise if SORA edges up towards 2027 forecasts.
Who often chooses this	Families with young children, retirees, or those stretched by TDSR limits.	Investors renting out units in areas like Paya Lebar or Queenstown, or higher‑income owners with buffer.

*Illustrative ranges based on 2025–2026 market conditions reported in local media and bank marketing materials; always check current rates on Homejourney’s live comparison page Bank Rates .

From my own experience advising buyers in estates like Sengkang and Bukit Panjang, families upgrading from a 4‑room HDB to a condo often prioritise peace of mind over squeezing out the lowest possible rate. They prefer knowing their instalment will stay roughly the same for 3–5 years, especially when juggling childcare and eldercare costs. In contrast, investors buying a 1‑bedder near MRT nodes like Aljunied or Redhill, where rental yields are stronger, are more open to SORA floating packages to lower financing costs in the early years.

How to Compare Bank Mortgage Rates Safely in 2026

When comparing 2026 home loan packages from banks such as DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Hong Leong Bank, Public Bank and Citibank, look beyond just the headline rate. A safe and thorough comparison should include at least these factors:

1. Benchmark + Spread (Margin)

Check whether the package is pegged to 3M SORA, 6M SORA or fixed rate.
Look at the spread: for example, 3M SORA + 0.70% vs 3M SORA + 0.95% makes a big difference over time.
Watch for step‑up spreads, where the margin increases after the first few years (e.g. 0.60% for years 1–2, then 0.90% thereafter).

2. Lock‑In Period and Penalties

Standard lock‑in is 2–3 years for both fixed and floating packages.
Prepayment or refinancing during lock‑in usually incurs a 1.5% penalty on outstanding loan.
For those planning to sell within a few years (for example, upgrading from a Punggol BTO to an OCR condo), a shorter lock‑in or no‑lock‑in package might be safer.

3. Fees, Subsidies and Legal Cash Rebates

Banks often offer legal and valuation subsidies for refinancing, subject to minimum loan amounts (commonly S$250k or S$300k).[5]
Some packages include partial prepayment flexibility, letting you prepay up to a certain percentage per year without penalty.
Compare these carefully – a slightly higher rate with generous subsidies can sometimes be better than the absolute lowest rate with no perks.

Homejourney simplifies this process: on the bank rates page Bank Rates , you can compare rates from all major banks side‑by‑side, see the effective cost including spreads and typical subsidies, and use the mortgage calculator Mortgage Rates or Bank Rates #calculator to estimate monthly instalments instantly.

Decision Framework: Choosing the Right Loan Type in 2026

Use this simple framework to decide between fixed and SORA‑pegged floating rates given the 2026 interest rate outlook in Singapore.

Step 1: Assess Your Risk Tolerance and Cash Flow

How stable is your income? If your job is stable (e.g. civil service, healthcare, statutory boards), a floating package may be acceptable. If you’re in cyclical sectors like F&B or tourism, stability from a fixed rate could be safer.
How tight is your monthly budget? If your Total Debt Servicing Ratio (TDSR) is close to 55% and you have high childcare or eldercare expenses, prioritise predictability (fixed or 6M SORA).
Do you have an emergency fund? Homeowners in mature estates like Bedok or Clementi often keep at least 6–12 months of instalments as a buffer; if you don’t, avoid aggressive floating bets.

Step 2: Think About Your Property Timeline

Staying long‑term (10+ years): Consider a mix – for example, start with a competitive floating package for 3–5 years, then reassess. With SORA near its floor in 2026, you may benefit from low rates in the early years.
Likely to upgrade in 3–5 years: Choose a package whose lock‑in ends around your expected sale date, to minimise penalties.

Step 3: Factor in the Interest Rate Outlook

Given forecasts of SORA hovering around 1% in mid‑2026 and rising modestly towards 1.4–1.5% by end‑2026 or 2027, the risk of a sharp spike seems lower than during the 2022–2023 inflation period.[2][3] However, geopolitical shocks, inflation surprises or delayed US Fed cuts could still push rates higher than expected.[1][9]

Because no forecast is guaranteed, Homejourney emphasises safety and resilience in loan planning: