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 primary benchmark for home loans in Singapore since SIBOR's discontinuation on 1 January 2025[1][6]. At Homejourney, we prioritize your safety and trust by providing verified, up-to-date information to help you make confident decisions on SORA home loans.

This cluster article answers the most common questions on SORA Linked Home Loans Explained Complete: Frequently Asked Questions, building on our pillar guide SORA Linked Home Loans Singapore: Complete 2026 Guide | Homejourney SORA Linked Home Loans Singapore: Complete 2026 Guide | Homejourney . Use Homejourney's bank rates page to track live 3M SORA and 6M SORA rates daily.

What is SORA and How Does It Work for Home Loans?

SORA, or Singapore Overnight Rate Average, is a volume-weighted average of borrowing transactions in Singapore's unsecured overnight interbank SGD cash market from 8am to 6:15pm, published daily by the Monetary Authority of Singapore (MAS)[1][6]. Banks use compounded SORA over 1-month, 3-month, or 6-month periods for floating-rate home loans, adding stability by refreshing rates less frequently than daily SORA[1].

For example, a SORA rate mortgage might be quoted as 3-month Compounded SORA + 0.75% margin. If 3M SORA is 1.2% (as of late 2025), your effective rate is about 1.95% p.a.[3]. This replaced SIBOR-pegged loans, offering greater transparency without speculation or manipulation risks[1].

Homejourney tip: First-time buyers in areas like Punggol or Tengah can calculate affordability using our mortgage calculator at https://www.homejourney.sg/bank-rates, factoring in TDSR limits of 55% of gross income[2].

3M SORA vs 6M SORA: Key Differences for Singapore Borrowers

3M SORA averages rates over three months for quarterly adjustments, balancing responsiveness and stability, while 6M SORA uses a six-month average for even smoother changes[1][5]. In falling rate environments like late 2025 (SORA at 1.2%, down from 3% early 2025), 3M SORA adjusts faster downward[3][5].

Here's a comparison:

Adjustment Frequency: 3M SORA quarterly; 6M SORA semi-annually[1].
Stability: 6M SORA more stable for risk-averse buyers; 3M suits those expecting rate drops[5].
Current Example: DBS, OCBC, UOB offer 3M SORA + 0.50-1.00% (effective ~1.7-2.2% as of Dec 2025)[2][3].

The chart below shows recent interest rate trends in Singapore, highlighting 3M SORA and 6M SORA movements over the past 6 months:

As seen in the chart, SORA fell sharply in 2025 due to US Fed cuts, making SORA loan Singapore packages more affordable[1][3]. Compare live rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and more on Homejourney's bank-rates page.

SORA vs SIBOR: Why the Switch Matters in 2026

SIBOR was discontinued end-2024; all floating loans now use SORA, which is transaction-based and less prone to manipulation[1][5]. SORA reflects actual interbank costs, influenced by global factors like US Fed policies[1]. In 2024, 3M SORA averaged 3.50-3.62%; by late 2025, it hit 1.2%[1][3].

Pros of SORA: Transparent, stable via compounding[1]. Cons: Still floats with markets, unlike fixed rates (2.4-2.9% for 2-3 years)[2]. For HDB upgraders, bank loans cap at 75% LTV (25% downpayment, 5% cash), tenure to age 65-75[2].

Actionable step: Assess risk tolerance. Conservative buyers (e.g., families in Jurong West HDBs) prefer fixed; investors eye SORA for potential savings. Use Homejourney's multi-bank submission: one Singpass application gets offers from all partners.

Current SORA Home Loan Rates from Major Banks

As of early 2026, popular packages include:

DBS: 3M SORA + 0.75% (~1.95%), 2-3 year lock-in[2].
OCBC: 3M SORA + 1.00% (~2.2%), popular for stability[3].
UOB: SORA-pegged floating, quarterly reviews[4].
HSBC/Standard Chartered: 3M SORA + 1.00% (~2.2%), HDB-friendly[2].

Rates adhere to MAS rules; always verify on Homejourney. Fixed packages remain popular (80% choice in 2025) for predictable payments[3]. Refinancers: No penalties post-lock-in; track via our tools.

Decision framework:

Check TDSR eligibility on Homejourney calculator.
Compare spreads (0.50-1.00%) across banks.
Factor economic outlook: Falling SORA favors floating[1].
Apply via Singpass for instant verification.

Practical Tips for Choosing and Managing SORA Loans

Insider tip: For Tengah BTO buyers, time refinancing when 3M SORA dips below 1.5% – monitor daily on Homejourney. Use CPF OA for downpayments (up to 20%), but calculate opportunity cost[2].

Steps to apply safely:

Visit https://www.homejourney.sg/bank-rates.
Compare DBS, OCBC, UOB rates side-by-side.
Submit one form; get personalized offers.
Connect with Homejourney Mortgage Brokers for guidance.

Disclaimer: Rates fluctuate; this is not financial advice. Consult professionals. Homejourney verifies data for your trust.

Frequently Asked Questions (FAQ)

Q1: What is the difference between 3M SORA and 6M SORA for home loans?
3M SORA adjusts quarterly over 3 months for quicker response to rate changes; 6M SORA semi-annually for more stability. Choose 3M in falling rates[1][5].

Q2: How does SORA affect my monthly payments?
Your rate = Compounded SORA + bank margin (e.g., 1.2% SORA + 0.75% = 1.95%). Payments recalculate at refresh; use Homejourney calculator for simulations[1][2].

Q3: Is SORA better than fixed rates in 2026?
SORA suits rate-drop expectations (now at 3-year lows); fixed offers certainty (2.4-2.9%). 80% chose fixed in 2025[3]. Compare on Homejourney.

Q4: Can I refinance a SORA loan easily?
Yes, post-lock-in (2-3 years). Track trends on Homejourney; submit multi-bank apps via Singpass[2].

Q5: Where can I find live SORA rates?
Track 3M/6M SORA daily on Homejourney's bank-rates, plus bank comparisons.

Ready to secure the best SORA home loan? Start with Homejourney's safe, verified tools at https://www.homejourney.sg/bank-rates. Search properties in your budget at https://www.homejourney.sg/search. For full details, read our pillar: SORA Linked Home Loans Singapore: Complete 2026 Guide.