Singapore’s SORA rate outlook for 2026 currently points to a low but stabilising interest rate environment, with most analysts expecting 3M SORA to drift around 1.2–1.5% if inflation stays mild and US Federal Reserve cuts remain gradual.[1][4][7][8] For Singapore homeowners, this means mortgage rates are likely to remain significantly lower than the 2022–2023 peaks, but big further drops are unlikely, so 2025–2026 is a key window to review your home loan, refinance, or decide between fixed and SORA-pegged packages.[1][4][7][8]
This cluster guide on Singapore SORA Rate Outlook 2026 – What Homeowners Should Know: Bank Rate Comparison Guide builds on our main SORA pillar articles, including Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney Guid... and . It focuses on practical decisions: how SORA forecasts translate into actual bank rates, and how to choose between 3M/6M SORA and fixed rates using Homejourney’s tools.
What is SORA and Why It Matters for Your 2026 Mortgage
SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of unsecured overnight interbank SGD transactions, administered by MAS and now the main benchmark for Singapore home loans.[2] Most floating home loans are pegged to 3‑month compounded SORA (3M SORA) or 6‑month compounded SORA (6M SORA), plus a bank spread (e.g. SORA + 0.7% p.a.).[2][3]
From late 2023 through 2025, SORA has fallen sharply from above 3.6% to around the low‑1% range, its lowest level in more than three years.[4][7] Analysts and local banks now expect:
- 3M SORA to hover around 1.3–1.4% by end‑2025, with room to remain soft into 2026.[1][7]
- Some forecasts see SORA around 1.2% by 2026 if global growth slows and inflation remains contained.[1][8]
In practical terms, this means homeowners who locked in loans at 3.5–4% during the 2022–2023 spike now have a chance to refinance to packages closer to 2% or even below, depending on bank spreads and whether they choose fixed or floating.[2][4]
3M SORA vs 6M SORA in 2026: Which is Better for Homeowners?
The key difference between 3M SORA and 6M SORA is how often your loan rate is reset:
- 3M SORA: Rate resets roughly every 3 months – more responsive to market moves, both up and down.
- 6M SORA: Rate resets roughly every 6 months – slower to adjust, offering slightly more short‑term payment stability.
In 2025, as SORA fell from about 3% in January to around 1.2% in December, homeowners on 3M SORA saw reductions filter through faster than those on 6M packages.[4][7] For 2026:
- If SORA stays low and moves in a narrow band (e.g. 1.2–1.5%), 3M versus 6M will mainly affect how quickly changes show up in your instalments, not the long‑term average cost.
- If growth weakens more than expected and SORA drifts lower, 3M SORA borrowers benefit slightly faster.
- If inflation or global shocks push rates up unexpectedly, 6M SORA gives a bit more time before your monthly payment increases.
On the ground, I’ve seen many East‑side buyers (for example, couples upgrading from a Tampines HDB to a Bedok Reservoir condo) lean towards 3M SORA when they are comfortable monitoring rates and using tools like Homejourney’s real‑time tracker, while more conservative families in mature estates like Toa Payoh often pick 6M SORA for the slightly smoother payment path.
Singapore Interest Rate Outlook 2026: What Current Forecasts Say
Recent research and local media coverage point to a broadly similar interest rate outlook for Singapore in 2026:
- 3M compounded SORA has fallen to around the low‑1% range and is expected to stay “soft” through 2026, helped by lower global rates, benign local inflation, and ample SGD liquidity.[1][4][7]
- Some forecasts see SORA gradually easing towards about 1.2% by 2026, but also warn that further declines are likely to be modest after the big falls of 2025.[1][4][8]
- The US Federal Reserve has signaled a slow, cautious easing path, suggesting only small additional cuts in 2026, which caps how low SORA can go.[4]
Channel NewsAsia recently highlighted that Singapore fixed‑rate home loans have already dropped from around 3.1% at the start of 2025 to roughly 1.4–1.8% by year‑end, with SORA‑pegged packages moving in tandem.[4] The Straits Times also reported that more HDB flat owners are refinancing as 3M SORA falls below 1.4%, extending a refinancing tailwind into 2026.[7]
Important caveat: Any SORA forecast (including references in this article) is an estimate, not a guarantee. Unexpected events – such as a global recession, energy shock, or geopolitical tensions – can cause rates to move in either direction. Always treat forecasts as one input into your decision, not the sole basis.
Fixed vs SORA Floating in 2026: Pros, Cons and Risk Profiles
With SORA near multi‑year lows and fixed rates now roughly half of what they were in early 2025, many homeowners are asking whether to lock in fixed rates or ride a SORA‑pegged floating package into 2026.[4]
In 2025, banks reported that four in five customers still opted for fixed packages, reflecting a strong preference for certainty even with SORA trending lower.[4] For example, an OCBC case study showed that a homeowner with a S$500,000 loan could save about S$4,100 per year in interest by switching from an older high‑rate package to a new five‑year fixed loan.[4]
How SORA Forecasts Translate into Real Bank Mortgage Rates
Most bank SORA home loans are structured as:
Home loan rate = 3M or 6M SORA + bank spread (e.g. 0.60%–1.00% p.a.)
If 3M SORA is 1.3% and a bank offers a spread of 0.8%, your effective rate is about 2.1% p.a. If SORA drifts to 1.2% in 2026 and the spread stays constant, your rate becomes 2.0% p.a. – that 0.1% change saves roughly S$500 per year on a S$500,000 loan with 25 years remaining.
As at late‑2025, media reports and bank commentaries suggest:
- Many fixed‑rate packages from DBS, OCBC, UOB and international banks like HSBC and Standard Chartered are in the 1.4–1.8% p.a. range for owner‑occupied properties, depending on loan amount and tenure.[4]
- SORA‑pegged packages can be slightly lower or similar on day one but will move with SORA every 3 or 6 months.
