What is SORA? How It Impacts Your Singapore Mortgage | Homejourney
This definitive guide explains SORA Singapore, the Singapore Overnight Rate Average, and its mortgage impact for buyers and refinancers. Homejourney provides transparent tools to track SORA rates and compare bank offers from DBS, OCBC, UOB, and more, ensuring safe, trusted decisions in Singapore's property market.
Whether you're a first-time HDB buyer in Toa Payoh or upgrading to a condo in Orchard, understanding SORA explained and SORA calculation is crucial. With SIBOR phased out since 2024, all floating-rate mortgages now peg to SORA. Homejourney's bank rates page lets you monitor live 3M SORA and 6M SORA updates daily.
Table of Contents
- Executive Summary
- What is SORA?
- SORA vs SIBOR: Key Differences
- How SORA Calculation Works
- SORA Mortgage Rates in 2026
- 3M SORA vs 6M SORA: Which to Choose?
- SORA Mortgage Impact on Monthly Payments
- Fixed vs Floating (SORA) Rates Comparison
- Current SORA Rates from Singapore Banks
- SORA Loan Decision Framework
- SORA Trends and Predictions
- Homejourney Tools for SORA Mortgages
- FAQ: SORA Singapore Common Questions
- Next Steps with Homejourney
Executive Summary: Mastering SORA for Smarter Borrowing
SORA (Singapore Overnight Rate Average) is the primary benchmark for floating home loans in Singapore since SIBOR's discontinuation in 2024[1][2][3]. Administered by the Monetary Authority of Singapore (MAS), SORA reflects actual overnight interbank borrowing rates, offering transparency over estimated rates like SIBOR[5].
SORA mortgage impact: Your monthly payments fluctuate with 3M or 6M compounded SORA plus a bank spread (typically 0.70%-1.00%). In rising rate environments, longer-term SORA (e.g., 6M) lags changes, acting like a buffer[2]. Homejourney verifies rates from DBS, OCBC, UOB, HSBC, and partners, helping you avoid surprises.
This pillar guide covers SORA explained, calculations, bank packages, and strategies. Original insight: In 2026's steady-rate market, 3M SORA suits risk-tolerant buyers for quicker drops, while 6M fits conservative HDB upgraders. Track everything on Homejourney's bank rates page.
What is SORA? The Singapore Overnight Rate Average Explained
SORA Singapore is the volume-weighted average rate of actual borrowing transactions in Singapore's unsecured overnight interbank SGD cash market, calculated daily between 8am and 6:15pm[1][3][5]. Unlike SIBOR, which banks estimated, SORA uses real transaction data for reliability[3].
MAS publishes daily SORA at 9am the next business day on their website, ensuring transparency[1][3]. For mortgages, banks use compounded versions: 1M, 3M, or 6M SORA, averaging past rates over those periods[2]. This backward-looking nature means your rate reflects historical data, not future guesses.
Insider tip: For HDB buyers in mature estates like Bedok, where budgets are tight, SORA's stability post-2024 has kept payments predictable amid global volatility. Homejourney's real-time tracker on our bank-rates page shows 3M SORA at around 2.8% as of early 2026 (subject to market changes).
Why SORA Replaced SIBOR and SOR
SIBOR and SOR were phased out by end-2024 due to manipulation risks in estimated rates[1][2]. SORA, introduced as the preferred benchmark, aligns with global standards like SOFR in the US[3]. All major banks—DBS, OCBC, UOB—now offer SORA-pegged loans exclusively for new floating packages[4].
Practical advice: If your loan ends post-2024, refinance to SORA via Homejourney to avoid higher fixed rates. Our multi-bank submission lets you apply once via Singpass for offers from DBS, HSBC, Standard Chartered, and more.
SORA vs SIBOR: Key Differences Table
SORA's transaction-based calculation makes it more robust than SIBOR's polled estimates[3]. Here's a comparison:
| Feature | SORA | SIBOR |
|---|---|---|
| Basis | Actual transactions[5] | Bank estimates[3] |
| Look-back | Backward (historical)[1][2] | Forward-looking[1] |
| Administered by | MAS[5] | ABS |
| Publication | 9am next day[3] | Daily poll[3] |
| Mortgage Use | Post-2024 standard[1] | Phased out[2] |
As shown, SORA reduces manipulation risks, building trust—core to Homejourney's mission[1][5].
How SORA Calculation Works: Step-by-Step
SORA calculation starts with banks reporting transactions to MAS between 8am-6:15pm. MAS computes the volume-weighted average overnight rate[5]. Daily SORA is published next day at 9am[3].
For mortgages, it's compounded: e.g., 3M Compounded SORA averages daily rates over 90 days, using a formula that accounts for business days[2]. Banks add a spread (e.g., +0.80%) and review quarterly[1].
Example: If 3M SORA is 2.9%, plus 0.8% spread = 3.7% p.a. Homejourney's mortgage calculator simulates this instantly. Original analysis: Compounding smooths volatility; in 2025's rate dips, 1M SORA fell faster than 3M[2].
SORA Mortgage Rates in 2026: Current Snapshot
In early 2026, 3M SORA hovers at 2.8-3.0%, down from 2024 peaks[1][2]. Banks offer packages like:
Lock-ins: Typically 2 years, with 20% prepayment allowed penalty-free annually[4]. Compare live on Homejourney bank-rates.
The chart below shows recent interest rate trends in Singapore, including 3M and 6M SORA movements over the past 6 months:
As visible, SORA has stabilized post-2025 hikes, aiding affordability for Punggol BTO applicants[2]. For deeper bank processes, see How Banks Set Mortgage Rates & Fees in Singapore | Homejourney ">How Banks Set Mortgage Rates & Fees.
3M SORA vs 6M SORA: Comparison for Borrowers
| Aspect | 3M SORA | 6M SORA |
|---|---|---|
| Lag Effect | Medium (90 days)[2] | Long (180 days)[2] |
| Best For | Falling rates (quick adjustment) | Rising rates (delays hikes) |
| Volatility | Moderate | Lower |
| Availability | Most common (DBS, OCBC)[2] | Select packages |
Choose 3M for investors in volatile Tampines condos; 6M for stable family HDB in Jurong[2]. Homejourney compares both across banks.
SORA Mortgage Impact: How It Affects Your Monthly Payments
Under TDSR (60% of income max), SORA fluctuations directly hit payments[1]. Example: S$500,000 loan (25 years, 3M SORA 2.9% + 0.8% = 3.7%): Monthly ~S$2,600.
If SORA rises 0.5%, payments increase ~S$130/month. HDB rules cap at 30% MSR for public housing[1]. Use Homejourney's calculator at bank-rates#calculator to model scenarios. Tip: Refinance before spread hikes (Year 3+).
Original insight: For 2026, with MAS steady policy, SORA volatility is low—ideal for first-timers budgeting S$800k Yishun ECs.
Fixed vs Floating (SORA) Rates: Pros, Cons, and Who Wins
- Fixed: Predictable (2-3 years at 3.5-4%), suits risk-averse[1]. Cons: Higher rates, refinancing penalties.
- SORA Floating: Lower initial (3M SORA +0.7% ~3.5%), flexible[4]. Cons: Rate risk.
Risk-tolerant investors pick SORA; families fixed. See How Banks Determine Mortgage Rates in Singapore | Homejourney ">How Banks Determine Mortgage Rates for details.
Current SORA Rates from Major Singapore Banks (2026)
- DBS: 3M SORA +0.80% (Y1-2), +1.00% after[3]
- OCBC: Similar tiered spreads
- UOB: Y1-2: +0.70%, 2Y lock-in[4]
- HSBC/Standard Chartered: Competitive +0.70-1.00%
- Maybank, CIMB, RHB: +0.80% promos
Rates via Homejourney partners. Compare side-by-side at https://www.homejourney.sg/bank-rates. Disclaimer: Rates change; not financial advice—consult professionals.
SORA Loan Decision Framework: 5 Steps
- Assess Risk: Conservative? 6M SORA or fixed.
- Check TDSR: Use Homejourney calculator.
- Compare Spreads: Via bank-rates.
- Time Market: Falling rates? Shorter SORA.
- Apply Multi-Bank: One Singpass submission on Homejourney.
For eligibility, link budget to property search.
SORA Trends and 2026 Predictions
Post-2024 peak (4%+), SORA eased to 2.8% by 2026 amid MAS easing[1][2]. Prediction: Stable 2.5-3.0% if inflation cools. Track historicals on Homejourney.
Insight: Pair with Straits Times Housing News for market context. Refinancers: Now's time per trends.
Homejourney Tools: Safe SORA Mortgage Management
Homejourney prioritizes trust: Compare DBS vs OCBC rates, calculate payments, apply via Singpass to partners like Maybank, Citibank. Brokers guide refinancing. Post-purchase, Aircon Services ">aircon services for maintenance. Search projects at Projects ">projects-directory.
FAQ: SORA Singapore Mortgage Questions
What is SORA in simple terms? SORA is MAS's daily average of real overnight bank loans, used for floating mortgages[5].
How does SORA mortgage impact payments? Adds spread to compounded SORA; recalculates quarterly[1].
3M vs 6M SORA: Difference? 3M adjusts faster in falls; 6M buffers rises[2].
Current 3M SORA rate? ~2.8% (check Homejourney for live).
Can I switch from fixed to SORA? Yes, post-lock-in; compare on bank-rates.
TDSR and SORA? Banks stress-test at 3.5% SORA equivalent[1].
Best bank for SORA loans? Compare UOB, DBS promos on Homejourney.
SORA calculation formula? Compounded average: See MAS docs[5].
Refinance to SORA costs? Minimal if post-lock-in; Homejourney simplifies.
SORA predictions 2026? Stable; track via our tools.
Next Steps: Start Your Safe Journey with Homejourney
Visit https://www.homejourney.sg/bank-rates to track SORA, compare rates, and apply securely. Homejourney verifies data, listens to feedback, and ensures transparency for confident decisions. Find properties at property-search. Your trusted partner from loan to home.
