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 owners. Homejourney provides verified insights to help you make safe, informed decisions on home loans from DBS, OCBC, UOB and more.
Executive Summary
SORA, or Singapore Overnight Rate Average, is the key benchmark for most floating home loans in Singapore since SIBOR and SOR phased out in 2024.SORA mortgage impact means your monthly payments fluctuate with interbank lending rates published by MAS.
Homejourney prioritizes your safety by offering live SORA tracking, bank rate comparisons from DBS, OCBC, UOB, HSBC and partners, and Singpass-enabled applications. This pillar guide covers SORA explained, calculations, trends, and strategies to minimize risks.
What is SORA?
SORA Singapore (Singapore Overnight Rate Average) is a volume-weighted average rate of actual borrowing transactions in the unsecured overnight interbank SGD cash market between 8am and 6:15pm daily.[1][2][4]
Administered by the Monetary Authority of Singapore (MAS), SORA publishes at 9am the next business day for transparency.[1][2] Unlike estimates, it reflects real transactions, making it more reliable for mortgages.[3]
Banks use compounded versions like 3-month SORA for home loans, averaging past rates over 90 days.[1][3] This lagging effect smooths daily fluctuations, acting like a short-term fixed rate during rises.[3]
Why SORA Replaced SIBOR
SIBOR (forward-looking polls) and SOR ended in 2024; all loans now peg to SORA.[1][2][3] Existing loans convert upon repricing. Homejourney's bank-rates page shows real-time shifts to plan refinancing safely.
SORA vs SIBOR & SOR: Key Differences
SORA bases on actual past transactions; SIBOR on bank forecasts.[2] Here's a comparison:
| Aspect | 3M Compounded SORA[2][3] | 3M SIBOR[2] |
|---|---|---|
| Basis | Past actual interbank loans | Banks' expected future rates |
| Calculation | Volume-weighted average, daily data 8am-6:15pm | Poll of 20 banks, trim top/bottom quartiles |
| Publication | MAS site, 9am next day | ABS site, weekly |
| Type | Backward-looking, transaction-based | Forward-looking, estimate-based |
SORA's transparency reduces manipulation risks, aligning with Homejourney's trust focus.[1][4]
How is SORA Calculated? SORA Calculation Explained
Daily SORA: MAS aggregates transaction data from reporting banks (8am-6:15pm), computes volume-weighted average.[4] Compounded SORA (e.g., 3M): Geometric average of daily rates over 90 days, backward-looking.[1][3]
SORA calculation formula simplifies to: rate based on past 30/90/180 days for 1M/3M/6M variants.[3] Banks add spread (e.g., 3M SORA + 0.8% first 2 years, +1% after).[1]
Example: If 3M SORA is 2.5%, spread 0.8%, total rate 3.3%. Use Homejourney's mortgage calculator for precise simulations.
SORA Mortgage Rates: 3M vs 6M and Spreads
Banks offer 3M or 6M compounded SORA + spread. 3M lags less, suits falling rates; 6M smoother for rises.[3]
Typical packages (2026 indicative, check banks):
| Year | Rate (e.g., DBS/OCBC) |
|---|---|
| Year 1-2 | 3M SORA + 0.60-0.80% |
| Year 3+ | 3M SORA + 0.90-1.20% |
Lock-ins (1-2 years) apply; repricing fees possible. Compare live on Homejourney bank-rates for DBS, UOB, HSBC, etc.[1]
Interest Rate Trends in Singapore
The chart below shows recent SORA trends (3M/6M) alongside fixed rates from major banks, helping you spot patterns for refinancing.
Rates peaked post-2024 hikes but eased in 2025; monitor via Homejourney for 2026 outlook. Track daily on our platform for safe timing.[1][2][3]
Fixed vs Floating Rates: Which for You?
| Factor | Fixed Rate | Floating SORA |
|---|---|---|
| Stability | Certain payments 2-3 years | Fluctuates monthly/quarterly |
| Initial Rate | Higher (3.5-4%) | Lower (SORA + spread ~3%) |
| Risk | Low short-term | Market-dependent |
| Best For | Risk-averse, short horizon | Long-term, falling rates |
Floating suits investors; fixed for HDB upgraders. Assess via Homejourney's tools.[2]
How SORA Affects Your Monthly Mortgage Payments
For $800,000 HDB loan (25 years, TDSR-compliant): If 3M SORA rises 1%, payment jumps ~$250/month.[1] TDSR caps debt at 60% income; factor buffers.[1]
Insider tip: In rising markets, 3M SORA lags hikes; switch to 1M for drops. Use Homejourney calculator – input income, see SORA scenarios instantly.
TDSR and MSR Considerations
MSR (HDB) at 30% income; TDSR 55-60%.[1] SORA volatility tests affordability – Homejourney verifies eligibility pre-application via Singpass.
Decision Framework: Choosing Your SORA Loan
- Risk Tolerance: Conservative? Fixed first 2 years + SORA.
- Market View: Expect cuts? 1M SORA for quick adjustments.[3]
- Tenure: Long loans favor floating historically.
- Compare Spreads: Shop DBS (0.6%), OCBC (0.7%) on Homejourney.
- Refinance Timing: Post-lock-in, if SORA + spread < current.
Apply once on Homejourney for multi-bank offers. See related: How Banks Determine Your Mortgage Rate vs Other Banks | Homejourney 2026
Homejourney: Your Safe SORA Mortgage Partner
Track live 3M/6M SORA daily. Compare DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, Citibank side-by-side at https://www.homejourney.sg/bank-rates.
- Instant calculator for SORA impact.
- Singpass applications – banks verify instantly.
- One form, multiple personalized offers.
- Refinance guidance from our brokers.
Search budget-matched properties at Homejourney property search. Disclaimer: Not financial advice; consult professionals.
FAQ: SORA Singapore Common Questions
What is SORA in simple terms?
SORA is Singapore's daily overnight interbank rate average by MAS, used for floating mortgages.[4]
How does SORA mortgage impact payments?
Rates adjust quarterly; 1% rise adds ~$250/month on $1M loan.[1]
3M vs 6M SORA: Which is better?
3M for falling rates (quicker drop); 6M for stability in rises.[3]
When to refinance SORA loan?
Post-lock-in if new spread lower by 0.5%+; track on Homejourney.
Current SORA rates 2026?
Check live at Homejourney bank-rates; ~2.5-3% compounded + spread.[1][2]
Does TDSR apply to SORA loans?
Yes, 55-60% income cap includes SORA payments.[1]
Next steps: Visit Homejourney bank-rates to compare, calculate, apply securely. We're here for your safe journey home.
