Singapore SORA Rate Outlook 2026: Key Takeaways for Homeowners
If you are choosing or refinancing a SORA-pegged home loan in 2026, the main outlook is that SORA is expected to stay relatively low but close to its floor, with banks and analysts generally projecting a stabilisation around the 1–1.5% range, rather than a sharp new decline.[1][2][6] This means mortgage rates are likely to remain more affordable than the 2022–2023 peak, but homeowners should not assume rates will keep falling.
This article focuses on “Singapore SORA Rate Outlook 2026 What Homeowners Should Know: Frequently Asked Questions” and supports our main pillar guide Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney . Here, Homejourney zooms into the most common questions Singapore buyers and owners ask about the SORA rate 2026, SORA forecast, 3M SORA / 6M SORA prediction, and the overall interest rate outlook Singapore, with practical steps you can apply immediately.
What exactly is SORA and how does it affect my home loan?
SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of unsecured overnight interbank Singapore dollar transactions, published by MAS as the main interest rate benchmark.[2] Most new floating-rate home loans in Singapore are now pegged to the 3‑month (3M) or 6‑month (6M) compounded SORA, plus a fixed bank spread.
In practical terms, if you take a SORA loan for your 4‑room HDB in Punggol or a condo in Tampines, your interest rate is usually:
- 3M or 6M compounded SORA (changes with market)
- + a fixed spread (for example, 0.7%–1.0% depending on the bank and package)
When SORA moves, your monthly instalment changes at each reset (every 3 or 6 months). During the 2022–2023 spike, owners in resale estates like Jurong West and Sengkang saw their monthly instalments jump by a few hundred dollars when 3M SORA went above 3%.[3][4] As SORA eased, their payments also came down.
The chart below shows recent interest rate trends in Singapore to help you visualise how SORA has been moving:
As you can see from the chart above, SORA is now much lower than its 2022–2023 peak, which is why recent refinancing packages from banks such as DBS, OCBC, UOB and HSBC look more attractive than in previous years.[3][6]
What is the SORA rate outlook for 2026?
Public forecasts and market models generally suggest that SORA will likely stabilise at low levels in 2026 rather than fall dramatically further. UOB research, for example, projects SORA to stabilise near 1.0% by around mid‑2026, then edge up to roughly 1.3–1.4% by end‑2026 as global conditions normalise.[1] Trading Economics models similarly see Singapore’s SORA trending near 1.0% in the near term, rising towards about 1.5% in the longer run.[2]
Local economists also expect Singapore’s GDP growth to moderate to about 2–2.6% in 2026, with core inflation around 0.5–1.5%, supporting a lower-rate environment compared to the recent peak but not an ultra‑low (near‑zero) regime like 2020–2021.[1][2][7] Channel NewsAsia has reported that SORA has already dropped from about 3% at the start of the previous cycle to roughly 1.2%, hitting a three‑year low, and some analysts believe it may have found a “floor”.[6]
In practical terms for homeowners:
- Do not expect SORA to go back to the near‑zero levels of 2020–2021.
- Do not assume rates will keep dropping much below the current 1%–1.2% band.
- Plan for SORA to hover near 1–1.5% in 2026, and build in a safety buffer of at least another 1–1.5 percentage points when stress‑testing your finances.
For a personalised view, you can track live 3M and 6M SORA movements, plus bank spreads, on Homejourney’s bank rates page: Bank Rates .
3M vs 6M SORA in 2026: Which is better?
Many 2026 packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and other banks offer a choice between 3M SORA and 6M SORA. The main trade‑off is between responsiveness and stability:
- 3M SORA – resets every 3 months, so your rate moves faster with the market. You may benefit sooner if SORA falls, but pay more quickly if it rises.
- 6M SORA – resets every 6 months, giving you longer payment stability, but you react slower to market changes.
From 2022 to early 2024, owners with 3M SORA packages felt the spike sooner, while those on 6M SORA enjoyed a short “lag period” before higher instalments kicked in. On the way down, the reverse was true – 3M SORA borrowers saw reductions earlier.[3][4]
As a simple rule of thumb for 2026:
- If you expect SORA to stay flat or rise slightly → 6M SORA can provide more payment stability.
- If you believe SORA has room to fall further → 3M SORA may allow you to capture reductions faster.
On Homejourney, you can compare side‑by‑side how 3M vs 6M SORA packages from different banks affect your monthly instalments using our mortgage calculator: Mortgage Rates and Bank Rates .
How will the 2026 interest rate outlook affect my monthly instalments?
Because most floating packages are priced as SORA + spread, your actual mortgage rate depends both on SORA and bank margins. For example, a typical 2026 package might look like:
- Year 1–2: 3M SORA + 0.8%
- Year 3 onwards: 3M SORA + 1.0%
Assuming a SORA forecast of around 1.2–1.4% in 2026,[1][2] your all‑in rate might be in the 2.0–2.4% region before any repricing. That is significantly lower than the peak period when some owners were paying over 4% on floating packages.
As a practical example, consider a $600,000 outstanding loan with 25 years remaining on your 4‑room BTO in Sengkang:
- At 4.0% interest: monthly instalment ≈ $3,167
- At 2.2% interest: monthly instalment ≈ $2,605
That’s about $560 per month saved, or more than $6,000 per year. For many families in areas like Yishun or Woodlands, that can be the difference between a tight and comfortable cash flow.
You can run your own numbers instantly using Homejourney’s eligibility and mortgage calculator: Mortgage Rates and . This helps you stress‑test different SORA scenarios (for example, 1%, 2%, 3%) before committing.
Should I choose a SORA floating package or lock in a fixed rate for 2026?
With SORA near multi‑year lows,[6] many owners are asking whether to stay on (or switch to) floating, or to lock in a fixed rate. There is no one‑size‑fits‑all answer, but you can use this simple decision framework.
Fixed vs Floating: Pros and cons in 2026
Given current forecasts that SORA is more likely to stabilise or move slightly higher from its present lows,[1][2][6] a balanced approach some owners take is:
- Choosing a shorter fixed lock‑in (2–3 years) if they prioritise certainty; or
- Opting for SORA now but planning to review and possibly reprice or refinance in 2–3 years if SORA rises.
On Homejourney, our mortgage comparison page allows you to compare fixed vs SORA packages across DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank side‑by‑side, and to simulate your monthly payments: Bank Rates .
How do global factors like Fed moves affect SORA in 2026?
While MAS manages monetary policy via the Singapore dollar exchange rate, not a policy interest rate, SORA is still influenced by global liquidity and US Federal Reserve policy.[1][2] When the Fed cuts rates and global liquidity improves, SORA usually drifts lower; when the Fed tightens, SORA tends to rise.
UOB’s 2026 forecast explicitly links the expected SORA bottom (around 1% in Q2 2026) to anticipated Fed rate cuts and slower global growth.[1] MAS and various economic outlooks likewise project mild growth and contained inflation into 2026, which supports a lower‑for‑longer rate environment, but not a return to emergency‑level rates.[2][7]
For homeowners, the key message is: SORA is cyclical. Even if 2026 looks benign, you should:
- Avoid maxing out your borrowing based on today’s low rates.
- Stress‑test your affordability at 1.5–2 percentage points above current rates.
- Review your loan every 2–3 years to decide if refinancing via Homejourney can lower your costs.
To understand the broader macro backdrop, you can also read our related 2026 market outlook articles, including how Fed rate cuts interact with Singapore mortgages: Fed Rate Cuts 2026 & Singapore Mortgages: Why Apply via Homejourney and Fed Rate Cuts 2026 & Singapore Mortgages: Bank Rate Comparison | Homejourney .
How can I safely choose a home loan in 2026 using SORA forecasts?
Here is a simple, practical framework Homejourney recommends for Singapore buyers and owners in 2026:
- Assess your time horizon
If you plan to sell or upgrade in 3–5 years (for example, moving from a BTO in Sengkang to a resale condo in Pasir Ris), you may prioritise lower upfront rates and flexibility. If you are settling long term (e.g. buying a forever home near your children’s primary school in Bukit Timah), stability may matter more. - Check your financial buffer
Add up your monthly obligations (loan, childcare, car, parents’ allowance) and ensure you can still cope if your mortgage rate rises by 1.5–2 percentage points. If your buffer is thin, a fixed rate or longer 6M SORA reset may be more suitable. - Compare across banks, not just one
Use Homejourney’s comparison tool to see rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank on one screen.Bank Rates Look at the spread, lock‑in period, subsidies and repricing options – not only the headline rate. - Use Singpass/MyInfo for accurate assessment
Applying via Singpass on Homejourney lets banks verify your income (e.g. IRAS NOA, CPF contribution history) instantly and safely. This reduces the risk of errors, speeds up approval, and ensures your loan offer reflects your true financial situation.Bank Rates - Stress‑test with Homejourney’s calculators
Before you commit to that new launch in Lentor or an OCR resale in Choa Chu Kang, use Homejourney’s affordability and eligibility calculator to model how your repayments change at different SORA levels and loan tenures.
Once you are comfortable, you can submit one application and receive offers from multiple banks through Homejourney’s multi‑bank submission system, supported by our mortgage brokers who provide non‑biased guidance.Bank Rates This reduces the need to share documents repeatedly and keeps your personal data within a trusted, secure platform.
