What is SORA and How Does it Affect Your Mortgage: Frequently Asked Questions
SORA, or Singapore Overnight Rate Average, is the key benchmark for most floating home loans in Singapore, directly influencing your monthly mortgage payments through compounded averages like 3-month SORA plus a bank spread. Administered by the Monetary Authority of Singapore (MAS), SORA replaced SIBOR and SOR by 2024, offering transparency based on actual interbank transactions.[5][1]
This cluster article breaks down SORA explained and its SORA mortgage impact for first-time buyers and refinancers. It connects to our pillar guide on Singapore home loans, providing tactical advice via Homejourney's tools for verified, safe financing. Track live SORA Singapore rates on Homejourney's bank rates page to make confident decisions.[1][5]
SORA Explained: The Basics for Singapore Borrowers
SORA is the volume-weighted average rate of borrowing transactions in Singapore's unsecured overnight interbank SGD cash market, calculated daily from 8am to 6.15pm transactions.[5][4] MAS publishes rates at 9am the next business day, ensuring reliability unlike forward-looking SIBOR.[1][3]
For mortgages, banks use compounded SORA—typically 1-month, 3-month, or 6-month averages—to smooth volatility. 3M Compounded SORA is most common, averaging past 90 days' rates, acting as a lagging indicator.[3][1] This means rate changes affect payments with a delay, unlike daily resets.
SORA calculation involves banks reporting data to MAS, which validates and compounds it. For example, a 3M SORA loan adds a bank spread (e.g., 0.80% first two years, then 1.00%), so if 3M SORA is 3.0%, your rate might be 3.8%.[1]
How SORA Affects Your Mortgage Payments
Your monthly payment fluctuates with SORA mortgage impact: higher SORA raises costs, lower reduces them. Under TDSR rules, payments can't exceed 60% of gross income, including all debts.[1] For a S$500,000 HDB loan at 25 years, a 1% SORA rise could add S$200+ monthly—crucial for budgets in areas like Punggol or Tengah.
Banks like DBS, OCBC, UOB peg loans to 3M SORA + spread. Promotional packages offer lower spreads initially (e.g., 0.60%-0.80% for years 1-2), rising later with 1-2 year lock-ins.[1] Refinance via Homejourney to compare DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and more side-by-side at https://www.homejourney.sg/bank-rates.
The chart below shows recent interest rate trends in Singapore, highlighting 3M and 6M SORA movements:
As seen, SORA peaked in 2024 but eased in 2025; monitor via Homejourney for timing refinancing.[3]
3-Month vs 6-Month SORA: Which to Choose?
- 3M SORA: Faster adjustment to rate drops (preferred in falling markets), more volatile short-term.[3]
- 6M SORA: Smoother, lags more—better for stability in rising rates.
Assess risk: Conservative buyers (e.g., HDB upgraders) pick 6M; aggressive investors opt 3M. Use Homejourney's mortgage calculator to simulate: input S$800,000 condo, 3M SORA +0.8%, see payments vs fixed.[1][3]
| Factor | 3M SORA | 6M SORA |
|---|---|---|
| Volatility | Medium | Low |
| Rate Drop Speed | Faster | Slower |
| Best For | Falling rates | Rising rates |
Decision framework: Evaluate income stability, economic outlook (MAS signals), risk tolerance. Homejourney verifies data for trust.[2]
Actionable Steps: Manage SORA Loans with Homejourney
- Track rates daily: Use Homejourney's real-time 3M/6M SORA tracker on bank-rates page.
- Compare banks: View DBS vs OCBC spreads; submit one Singpass application for multi-bank offers.
- Calculate affordability: Test scenarios with our calculator—e.g., S$1M BTO in Woodlands.
- Refinance smartly: Check What is SORA? How It Impacts Your Singapore Mortgage | Homejourney ">SORA impact guide; avoid lock-in penalties.
- Apply safely: Connect with Homejourney Mortgage Brokers for personalized advice.
Post-purchase, maintain via Aircon Services ">aircon services; search budgets at property search. Disclaimer: Not financial advice; consult professionals. Rates as of 2026; MAS/HDB subject to change.[1][5]
Frequently Asked Questions (FAQs)
What is SORA Singapore? SORA is MAS-administered overnight interbank rate, compounded for mortgages.[5]
How is SORA calculated for my loan? Daily rates averaged over 3M/6M, plus bank spread (e.g., 3M SORA + 0.8%). Published daily on MAS site.[1][4]
Does SORA affect fixed loans? No, fixed are locked; floating/SORA loans fluctuate monthly.[2]
3M vs 6M SORA: Impact on payments? 3M adjusts quicker to drops; 6M smoother. Simulate on Homejourney.[3]
Where to track SORA trends? Homejourney's bank-rates for live data, comparisons.[1]
Master What is SORA and How Does it Affect Your Mortgage: Frequently Asked Questions with Homejourney—your trusted partner for safe, transparent property journeys. Compare rates now at https://www.homejourney.sg/bank-rates and link to our full home loans pillar for more.
