Singapore SORA Rate Outlook 2026 What Homeowners Should Know: Benefits of Applying via Homejourney comes down to three things: where SORA is likely heading by 2026, what that means for your monthly instalments, and how to use Homejourney’s tools to lock in a safe, suitable package for your risk profile.
This cluster article builds on our main 2026 SORA pillar guides Singapore SORA Rate Outlook 2026: What Homeowners Should Know | Homejourney Guid... and Singapore SORA Rate Outlook 2026: Homejourney Guide for Homeowners , and focuses specifically on how homeowners can practically use the 2026 SORA outlook to choose or refinance a mortgage via Homejourney in a safe, informed way.
What is SORA and why it matters for 2026 home loans
The Singapore Overnight Rate Average (SORA) is the volume‑weighted average rate of unsecured overnight interbank SGD transactions, administered by MAS.[1] In simple terms, it reflects what banks charge each other to borrow for one day, then is compounded over 1, 3 or 6 months and used as a benchmark for mortgages.
From 1 Jan 2025, SORA has fully replaced SIBOR and SOR as the main benchmark for new home loans in Singapore.[3] Most floating packages now use compounded 3‑month SORA (3M SORA) or 6‑month SORA (6M SORA) plus a bank spread. In my own conversations with bank RMs at Raffles Place and Tanjong Pagar branches, nearly every new floating offer since late 2024 has been SORA‑pegged, especially for private property and HDB refinancing.
As of March 2025, indicative SORA levels reported by market trackers were roughly:
– 1M SORA: about 2.3%
– 3M SORA: about 2.6%
– 6M SORA: about 2.9%[3]
By comparison, SORA had been around 3% or higher through much of 2024 before easing as global rates turned.[3][2] That context is important when thinking about 2026.
SORA rate 2026: what current forecasts suggest
No one can guarantee SORA levels in 2026, but there are credible directional signals homeowners can use.
According to long‑term projections referenced by Trading Economics, the Singapore Overnight Rate Average is expected to trend around 1.0% in 2026 and 1.5% in 2027, based on macro models using MAS data.[1] This is a model‑based forecast, not official MAS guidance, but it suggests a lower‑for‑longer environment compared with 2022–2023.
Local bank economists also expect moderate growth and contained inflation in 2026. One 1H 2026 outlook from a major bank’s economics team cited Singapore GDP of about 2.0% and CPI inflation around 1.3%, implying no need for sharply higher short‑term rates.[6] Lower growth and benign inflation typically support lower interbank rates like SORA.
Media coverage of home loan packages has highlighted that SORA has already fallen from around 3% at the start of 2025 to close to 1.2% by December, its lowest since 2022, with some strategists suggesting SORA may be near a “floor” barring a major global shock.[5] The Straits Times has also reported expectations that 3M SORA could hover around the low‑1% range into 2026, supporting continued refinancing interest.[7]
Key 2026 takeaway: Most reputable forecasts point to 3M and 6M SORA staying relatively low into 2026, likely somewhere around the 1–1.5% region on average, though short‑term fluctuations are still likely.[1][5][7] Homeowners should treat this as a base case, not a promise.
3M SORA vs 6M SORA in 2026: which is safer for you?
For mortgages, the main practical SORA choices are 3M SORA and 6M SORA packages.
- 3M SORA: Rate resets every 3 months. You react faster to market changes – good if SORA is trending down, but your instalment can adjust more frequently.
- 6M SORA: Rate resets every 6 months. Changes are slower – you get more stability for half‑year blocks, but benefit from rate drops later.
Assuming a 2026 environment where SORA hovers around 1–1.5%, a typical new loan might look like:
- 3M SORA package: 3M SORA (say 1.2%) + 0.7% spread = ~1.9% headline rate
- 6M SORA package: 6M SORA (say 1.3%) + 0.8% spread = ~2.1% headline rate
These spreads vary by bank and campaign. From walking bank branches in areas like Tampines Hub, Jurong Gateway and Tiong Bahru, I’ve seen spreads as tight as +0.5% during aggressive campaigns, especially when banks chase market share at quarter‑end.
How SORA changes affect your monthly instalment
To make this real, consider a typical HDB upgrader buying a $1.2M condo in Punggol or Sengkang with a $900,000 loan over 25 years.
If your 3M SORA‑pegged rate in 2026 is 1.8% p.a., your monthly instalment is roughly:
At 1.8% p.a. (3M SORA + spread)
– Loan: $900,000
– Tenure: 25 years
– Monthly: ≈ $3,700–$3,750
If SORA rises and your effective rate becomes 2.5% p.a. at the next reset, your monthly jumps to about $4,000.
That ~$250–$300 difference may not sound huge, but for families already stretching CPF and cash, it matters – especially with other costs like childcare and car park season tickets. This is why many homeowners in mature estates like Ang Mo Kio or Bedok opt for fixed packages despite slightly higher starting rates.
Homejourney’s mortgage calculator at lets you plug in your own loan amount, tenure and SORA assumptions (e.g. 1.5%, 2.0%, 2.5%) so you can stress‑test your budget before committing.
Fixed rate vs SORA floating in 2026: which is better?
With SORA expected to be relatively low but not guaranteed, the classic question is: fixed or floating?
