SORA Home Loans Singapore: Complete Guide by Homejourney
SORA home loans are now the standard for floating-rate mortgages in Singapore, replacing SIBOR since January 2025. This definitive Homejourney guide explains SORA loan Singapore options, including 3M SORA and 6M SORA, helping you make safe, informed decisions on your property journey.
Homejourney prioritizes your trust with verified rates, transparent comparisons, and Singpass-enabled applications for faster approvals from DBS, OCBC, UOB, and more. Track live SORA rates at Homejourney bank rates.[1][2][7]
Table of Contents
- What is SORA? Singapore Overnight Rate Average Explained
- SORA vs SIBOR: Why the Switch Happened
- 3M SORA vs 6M SORA: Key Differences
- How SORA-Linked Home Loans Work
- SORA Rate Trends and the Interactive Chart
- SORA vs Fixed Rates: Pros, Cons and Comparison
- Current SORA Rates from Singapore Banks
- Calculating Your SORA Mortgage Payments
- Refinancing to SORA Loans
- Decision Framework: Is SORA Right for You?
- Homejourney Tools for SORA Loan Success
- FAQ: SORA Home Loans Singapore
What is SORA? Singapore Overnight Rate Average Explained
SORA stands for Singapore Overnight Rate Average, the volume-weighted average rate of borrowing transactions in Singapore's unsecured overnight interbank SGD cash market from 8am to 6.15pm. Administered by the Monetary Authority of Singapore (MAS), SORA provides a transparent, transaction-based benchmark free from speculation.[7][1]
Unlike estimated rates, SORA uses actual trades, making it reliable for SORA rate mortgages. Banks compound SORA over 1-month, 3-month, or 6-month periods for home loans, smoothing daily fluctuations for stable payments.[1][4]
For first-time HDB buyers in areas like Punggol or Tengah, understanding SORA ensures you peg your loan to real market costs. Homejourney verifies these rates daily for your safety.[2]
How SORA is Calculated
MAS validates interbank data daily and publishes compounded rates. For a 3M SORA loan, your rate averages the prior 90 days' overnight rates, applied quarterly.[4][7]
This lagging effect protects against short spikes: in rising markets, 3M SORA rises slower; in falling ones, it lags drops.[4]
SORA vs SIBOR: Why the Switch Happened
SIBOR, phased out January 1, 2025, was an estimated interbank rate prone to manipulation. SORA vs SIBOR comparison shows SORA's superiority: it's fully transaction-based, published by MAS, and endorsed globally.[1][5]
| Feature | SIBOR | SORA |
|---|---|---|
| Basis | Bank estimates | Actual trades[1][7] |
| Transparency | Lower | High (MAS published) |
| Manipulation Risk | Higher | Minimal[1] |
| Use in Loans | Phased out 2025 | Standard now[2] |
All major banks like DBS, OCBC, and UOB now offer SORA home loans. Transition was smooth, with no disruption for borrowers.[1][3]
3M SORA vs 6M SORA: Key Differences
3M SORA compounds 90-day averages, adjusting quarterly for balance between stability and responsiveness. 6M SORA uses 180-day averages, changing semi-annually for even less volatility.[1][4]
| Aspect | 3M SORA | 6M SORA |
|---|---|---|
| Compounding Period | 90 days | 180 days[1] |
| Adjustment Frequency | Quarterly | Semi-annual |
| Best For | Moderate risk takers | Stability seekers[4] |
| Rate Sensitivity | Medium | Low |
In 2024, 3M SORA averaged 3.50%-3.62%; now at 3-year lows around 1.34%.[1][2][6] Choose 3M for quicker drops in falling markets.[4]
How SORA-Linked Home Loans Work
Your SORA loan Singapore rate = Compounded SORA + Bank Margin (typically 0.5%-1.0%). For a $500,000 HDB loan at 3M SORA 1.34% + 0.7% margin = 2.04% effective rate.[2]
Payments adjust at period end, but banks often cap changes. HDB loans reference CPF rates, but bank SORA loans offer flexibility for upgraders.[6]
Under TDSR (Total Debt Servicing Ratio), your total debt payments can't exceed 55% of income. Use Homejourney's calculator at mortgage calculator.[2]
SORA Rate Trends and the Interactive Chart
SORA fell from 3% in early 2025 to 1.2% by December, driven by US Fed cuts. 3M SORA hit 1.34%, lowest in 3 years.[2][6]
The chart below shows recent interest rate trends in Singapore, tracking 3M and 6M SORA over the past 6 months:
As seen, rates stabilized at lows, but global factors could influence future moves. Track live on Homejourney bank rates.[1][2]
SORA vs Fixed Rates: Pros, Cons and Comparison
Fixed rates lock 2.4%-2.9% for 2-5 years; SORA floats with market. 80% chose fixed in 2025 for stability.[2]
- SORA Pros: Potential savings in low-rate environments; transparent.[1]
- SORA Cons: Rate rise risk; payment uncertainty.
- Fixed Pros: Predictable payments; ideal for budgeting.
- Fixed Cons: Higher initial rates; refinancing penalties.
See related: Fixed vs Floating Rate Mortgage.
Current SORA Rates from Singapore Banks (2026)
As of early 2026, rates at 3-year lows. Compare on Homejourney:
- DBS: 3M SORA + 0.65% (~2.0%)[2]
- OCBC: 3M SORA + 0.70%
- UOB: 6M SORA + 0.60%
- HSBC: 3M SORA + 0.55%
- Standard Chartered, Maybank, CIMB: Similar, with rebates.[2]
Visit compare rates for latest from all partners. Cash rebates common in Q1.[2]
Calculating Your SORA Mortgage Payments
Example: $800,000 loan, 25 years, 3M SORA 1.34% + 0.7% = 2.04%.
Monthly: ~$3,500 (use Homejourney calculator for precision). If SORA rises to 2%, payment ~$3,750 (+7%).[1]
Insider tip: For BTO in Woodlands, factor CPF usage; Homejourney simulates scenarios safely.
Refinancing to SORA Loans
HDB owners refinance to banks as rates drop below HDB's 2.6%. 3M SORA packages now cheaper; expect trend into 2026.[6]
- Check eligibility on Homejourney.
- Submit multi-bank app via Singpass.
- Compare offers, convert free after year 1.[6]
More HDB flats like those in Jurong seeing switches.[6]
Decision Framework: Is SORA Right for You?
Assess risk: Conservative? Fixed or 6M SORA. Aggressive? 3M SORA.
- High income stability: SORA savings potential.
- First-time buyer: Fixed for certainty.
- Investor: Monitor via Homejourney for timing.[2]
Disclaimer: This is educational; consult advisors. Rates change; verify on bank-rates.
Homejourney Tools for SORA Loan Success
Homejourney builds trust with:
- Live 3M/6M SORA tracking.
- Side-by-side bank comparisons (DBS to Citibank).
- Instant calculator: mortgage calculator.
- Singpass apps: One submission, multiple offers.
- Search budgeted properties: property search.
Apply safely today for personalized rates.
FAQ: SORA Home Loans Singapore
What is a SORA home loan?
Floating-rate loan pegged to compounded SORA + margin, adjusting periodically.[1][7]
3M SORA vs 6M SORA: Which is better?
3M for responsiveness in falling rates; 6M for stability.[4]
Current 3M SORA rate Singapore?
Around 1.34% as of late 2025; check Homejourney for live data.[2][6]
SORA vs SIBOR: Is SORA better?
Yes, more transparent and manipulation-resistant.[1]
Can I refinance to SORA loan?
Yes, especially if rates below HDB's 2.6%; many HDB owners doing so.[6]
How does SORA affect my monthly payment?
Rate = SORA + margin; e.g., 1.34% + 0.7% = 2.04% on $500k loan ~$2,100/month.[2]
Where to compare SORA rates?
Homejourney's bank-rates page for all major banks.
Ready for your safe property journey? Start with Homejourney's verified SORA home loan tools and property search. Prioritizing your trust every step.
References
- Singapore Property Market Analysis 1 (2026)
- Singapore Property Market Analysis 2 (2026)
- Singapore Property Market Analysis 7 (2026)
- Singapore Property Market Analysis 4 (2026)
- Singapore Property Market Analysis 5 (2026)
- Singapore Property Market Analysis 3 (2026)
- Singapore Property Market Analysis 6 (2026)
