SORA Linked Home Loans Explained: Complete FAQ | Homejourney
SORA Linked Home Loans are floating-rate mortgages pegged to the Singapore Overnight Rate Average (SORA), the key benchmark replacing SIBOR since January 2025. At Homejourney, we prioritize your safety by providing transparent, verified info on SORA home loans to help you decide confidently.
This cluster article answers the most common questions on SORA Linked Home Loans Explained Complete: Frequently Asked Questions, building on our pillar guide SORA Home Loans Singapore: Complete Guide by Homejourney. Track live rates and compare packages from DBS, OCBC, UOB at Homejourney's bank rates page.
What is SORA and How Does It Work for Home Loans?
SORA stands for Singapore Overnight Rate Average, calculated by the Monetary Authority of Singapore (MAS) as the volume-weighted average of overnight interbank SGD borrowing transactions from 8am to 6.15pm.[7] Unlike SIBOR, SORA uses actual transaction data, making it transparent and manipulation-resistant.[1]
Banks peg SORA loan Singapore packages to compounded SORA over 1-month, 3-month, or 6-month periods, plus a bank margin (typically 0.7-1.0%). This creates a SORA rate mortgage that adjusts periodically, reflecting real market costs.[4]
For example, a 3M SORA loan uses the average SORA over the past 90 days, offering stability against daily swings. In 2024, 3-month compounded SORA averaged 3.50%-3.62%; by late 2025, it fell to 1.2%-1.34%, lowering payments.[1][2][6]
3M SORA vs 6M SORA: Key Differences for Borrowers
3M SORA compounds rates over 90 days, adjusting quarterly for moderate stability. It's popular for balancing responsiveness and predictability, ideal for HDB upgraders in areas like Punggol or Tengah.[1][4]
6M SORA uses 180-day averages, changing semi-annually with even less volatility but slower reaction to rate drops. Choose 3M SORA in falling rates to benefit quicker; opt for 6M in rising environments for a lag effect.[4]
| Feature | 3M SORA | 6M SORA |
|---|---|---|
| Adjustment Frequency | Quarterly | Semi-annually |
| Stability | Moderate | Higher |
| Best For | Falling rates | Rising rates |
The chart below shows recent SORA vs SIBOR trends in Singapore:
As seen, SORA has dropped sharply to 3-year lows around 1.2%-1.34% by late 2025, making refinancing attractive for HDB owners versus HDB's 2.6% rate.[2][6]
How Do SORA Rates Impact Your Monthly Payments?
Your rate = Compounded SORA + bank spread. For a S$500,000 HDB loan at 30 years, if 3M SORA is 1.34% + 0.8% spread = 2.14% total, monthly payment is about S$2,100. A 0.5% drop saves ~S$120/month.[1]
Homejourney's mortgage calculator at https://www.homejourney.sg/bank-rates#calculator lets you simulate this instantly. Current packages from DBS, OCBC, UOB offer 1.9%-2.5% effective rates with rebates.[2]
- Tip: Refinance if your existing rate exceeds 2.6%; many banks waive fees post-lock-in.[6]
- Track daily via Homejourney: Live 3M/6M SORA updates ensure you time applications perfectly.
SORA vs Fixed Rates: Quick Decision Framework
SORA suits risk-tolerant buyers expecting rate cuts; fixed (2.4%-2.9% for 2-3 years) offers certainty, preferred by 80% in 2025 per OCBC.[2] Compare on Homejourney vs reading our Fixed vs Floating guide.
- Assess risk: Conservative? Fixed. Optimistic on cuts? SORA.
- Check tenure: Short-term? SORA for flexibility.
- Verify eligibility: Use TDSR calculator on bank-rates.
- Apply multi-bank via Singpass for best offers from HSBC, Maybank, etc.
Disclaimer: Rates fluctuate; consult Homejourney brokers for personalized advice. Homejourney verifies data for your safety.
Actionable Steps to Get the Best SORA Home Loan
1. Visit Homejourney bank rates to compare DBS, UOB, Standard Chartered packages side-by-side.
2. Use Singpass for instant eligibility checks—no paperwork hassles.
3. Submit one application; get offers from 10+ banks like CIMB, RHB.
4. Pair with property search at https://www.homejourney.sg/search to find HDBs in Yishun or condos in Jurong fitting your budget.
Insider tip: Apply Q1 2026 for peak rebates amid bank competition.[2]
Frequently Asked Questions (FAQ)
Q1: What is the current 3M SORA rate in Singapore?
A: As of late 2025, 3M compounded SORA is ~1.34%, down from 3% early 2025. Track live on Homejourney.[2][6]
Q2: Is 3M SORA or 6M SORA better now?
A: 3M SORA for faster rate drop benefits in this easing cycle; 6M for more stability.[1][4]
Q3: Can I switch from fixed to SORA loan?
A: Yes, post-lock-in with minimal fees. Refinance via Homejourney for cashback offers.[6]
Q4: How does SORA affect HDB loans?
A: Bank SORA loans now beat HDB's 2.6%; more owners refinancing.[6]
Q5: Where to compare SORA home loan rates safely?
A: Exclusively on Homejourney—verified, transparent, user-trusted.
Ready for your SORA home loan? Start at Homejourney bank rates for secure comparisons and applications. Trust Homejourney for transparent property journeys—your safety first.
