Should You Refinance Your Home Loan in 2026? SORA, Costs and Break-Even Explained

Refinancing is worth it when the interest you save before your next lock-in ends is clearly more than your switching costs. Three-month compounded SORA, the benchmark for floating-rate packages, fell to about 1.02% in late April 2026 but had risen to 1.23% by 30 September 2026 (MAS). Rates are no longer "near 1%", so compare actual quotes, not headlines.

This page was first published on 2 April 2026 under the title "SORA Near 1%: Should You Refinance Your Mortgage in 2026?". It was rewritten on 28 September 2026 with MAS data, because SORA has since risen and several figures in the original could not be verified.

Where is SORA now, and how has it moved?

SORA-pegged home loans usually price off the three-month compounded SORA, which MAS publishes every business day. Selected values from MAS:

Source: MAS, Domestic Interest Rates (3-month Compounded SORA), retrieved 1 October 2026.

The original version of this page said SORA peaked at 3.82% in October 2023. MAS data shows a peak of 3.76% on 3 November 2023. The March 2026 figure of 1.07% was correct.

Because the three-month rate averages the past three months, it moves slowly. It has risen every month since May 2026, so a floating package priced at "3M SORA + spread" costs more now than it did in April.

What rates were banks offering?

The most recent dated package rates we could source from reputable press are from July 2026. Stacked Homes, using Redbrick Mortgage Advisory data (26 July 2026), cited these example packages:

These are single example packages, not a market range. For a wider range, the earlier Stacked Homes survey from March 2026:

Source: Stacked Homes, using Cashew Mortgage data (27 March 2026). Redbrick Mortgage Advisory, writing in EdgeProp in April 2026, said fixed packages had fallen to between 1.45% and 1.75% by December 2025. Rates change often, so get current quotes from banks or a broker before deciding.

For comparison, the HDB concessionary loan rate is 2.6%. If you switch an HDB loan to a bank loan, you cannot switch back to an HDB loan later (CPF Board). See our HDB loan vs bank loan comparison.

Should you reprice or refinance?

Repricing means moving to a new package with your current bank. Refinancing means moving your loan to a different bank. According to DBS:

Banks often subsidise legal and valuation fees for larger loans. Stacked Homes said refinancing costs are typically about S$2,000 to S$3,000, and that the new bank in most cases covers them for loans of S$250,000 or more (March 2026). Banks can claw back a legal or valuation subsidy if you refinance out again too soon (EdgeProp, 2024), so check the clawback clause in your letter of offer.

What does it cost to break a lock-in?

Most packages have a lock-in period. Redeeming the loan during it usually triggers a prepayment penalty, typically 1.5% of the outstanding loan (Redbrick Mortgage Advisory in EdgeProp, April 2026). On an S$800,000 loan, that is S$12,000, which can wipe out the savings from a lower rate. Some packages waive the penalty if you sell the property. EdgeProp's 2024 guide lists the costs to weigh: legal fees, valuation fees, prepayment penalties and subsidy clawbacks.

How do you work out the break-even?

Break-even (months) = total switching cost ÷ monthly savings.

Our illustration (not a quote from any bank): an S$800,000 loan with 25 years left.

• Monthly saving: about S$320. Interest saved over two years: about S$12,500.
• If you pay S$2,500 in fees with no subsidy, you break even in about 8 months (S$2,500 ÷ S$320).
• If you are still in a lock-in with a 1.5% penalty (S$12,000), you would take about three years to break even, which is longer than most new lock-ins.

Working: standard amortising-loan formula, monthly compounding, 300 monthly instalments. Rates are illustrative inputs we chose, not market quotes.

Does TDSR apply when you refinance?

It depends on whether you live in the property.

• Owner-occupied home: exempt. MAS says an existing borrower refinancing a loan for a property he occupies is exempted from the TDSR threshold.
• Investment property: TDSR applies. The threshold is 55%, but MAS said borrowers whose loans were granted before 16 December 2021 are not affected by the lower threshold when refinancing, so the previous 60% applies to them. A bank may still refinance above the threshold if you commit to a debt reduction plan, repaying at least 3% of the outstanding balance over no more than 3 years, and pass the bank's credit assessment (MAS).

MAS's page on this was last revised in 2019, when the TDSR threshold was 60%. MAS lowered it to 55% for purchases with an option to purchase granted on or after 16 December 2021. See TDSR vs MSR explained.

Fixed or floating?

Neither is right for everyone. The trade-off:

• Fixed: your instalment stays the same through the fixed period. This helps if your budget is tight or you think rates will rise. In March 2026, two-year fixed rates were close to the floating rate (3M SORA of about 1.07% plus a spread), so the premium for certainty was small.
• Floating: you gain if SORA falls and lose if it rises. Since April 2026, 3M SORA has risen by about 0.2 percentage points, which on an S$800,000 loan adds roughly S$130 a month in interest (our estimate: S$800,000 × 0.2% ÷ 12).

Also check the features that apply after the fixed period (what rate the package reverts to), whether there's a penalty waiver on sale, and whether partial prepayments are allowed. For more detail, see our fixed vs floating rates guide.

Frequently asked questions

What is the 3-month compounded SORA today?

It was 1.2336% for the value date 30 September 2026, published by MAS on 1 October 2026. It fell to about 1.02% in late April 2026 and has risen every month since May.

When is the best time to refinance?

Usually about three months before your lock-in ends, because refinancing takes at least three months to take effect (DBS). Switching during a lock-in usually costs a penalty of about 1.5% of the loan.

Is repricing cheaper than refinancing?

Usually, yes. DBS cites a repricing fee of about S$800, against legal and valuation fees usually above S$2,000 for refinancing, although new banks often subsidise those fees for larger loans.

Do I need to pass TDSR to refinance?

Not for a home you live in. For an investment property, TDSR applies unless you commit to a debt reduction plan and pass the bank's credit assessment (MAS).

Should I switch my HDB loan to a bank loan?

It depends on the rate gap and your risk tolerance. Bank rates were below the HDB rate of 2.6% in 2026, but bank loans can rise, and you cannot move back to an HDB loan later.

Sources

• MAS, Domestic Interest Rates: SORA and 3-month Compounded SORA (data to value date 30 September 2026, retrieved 1 October 2026)
• MAS, Who TDSR applies to (last revised 17 June 2019)
• MAS, Measures to cool the property market (15 December 2021)
• MAS, Response to "Allow similar exemption from TDSR for loan repricing" (2017)
• DBS, Refinancing vs repricing
• CPF Board, 3 differences between an HDB loan and a bank loan
• Stacked Homes, Singapore mortgage rates: room to fall? (27 March 2026)
• Stacked Homes (Redbrick Mortgage Advisory data), Singapore's best mortgage rates are back, but the cheapest home loan isn't always the best one (26 July 2026)
• EdgeProp (Clive Chng, Redbrick Mortgage Advisory), Your mortgage rate matters, but it is not everything (23 April 2026)
• EdgeProp, Impact of interest rate cuts on home loans: is this a good time to refinance? (29 August 2024)

This page explains rules and trade-offs. It is not financial advice, and SG Properties does not arrange loans.