Fixed vs Floating Mortgage Rates in Singapore: What to Choose in 2026

Singapore's mortgage market entered 2026 in a state of flux. After three years of rising SORA rates that pushed floating-rate mortgages to 4%+ in 2023–2024, the trajectory has reversed sharply. Three-month compounded SORA fell from 3.68% in early 2024 to approximately 1.05% by March 2026. Fixed rates, meanwhile, have not fallen as fast — they sit in the 1.40–1.80% range at most major banks. For the first time in years, the fixed vs. floating decision is genuinely close, and the answer depends heavily on your view of where rates go next.

Where Rates Stand in March 2026

Fixed Rates

Fixed-rate mortgages lock your interest rate for an initial period, typically two or three years. Current market rates:

Bank	2-Year Fixed	3-Year Fixed
DBS	1.55%	1.65%
OCBC	1.50%	1.60%
UOB	1.58%	1.68%
Standard Chartered	1.45%	1.55%
Maybank	1.40%	1.50%

Rates shown are indicative as of Q1 2026 and subject to change. Most packages also carry a lock-in period matching the fixed rate term.

Floating Rates (SORA-Pegged)

Most floating-rate mortgages in Singapore are now pegged to the 3-month compounded SORA (3M SORA) plus a spread. With 3M SORA at approximately 1.05%:

Bank	SORA Spread	Effective Rate (approx.)
DBS	+0.50%	~1.55%
OCBC	+0.45%	~1.50%
UOB	+0.55%	~1.60%
Standard Chartered	+0.40%	~1.45%

At current SORA levels, floating rates and fixed rates are almost identical for most banks. The decision comes down entirely to your view of what SORA does from here.

The SORA Outlook

The Monetary Authority of Singapore (MAS) targets exchange rate policy rather than interest rates directly, so Singapore's domestic rates are heavily influenced by global central bank decisions — primarily the US Federal Reserve.

What has happened: The US Federal Reserve cut rates by a cumulative 150 basis points from its peak of 5.25–5.50% in mid-2023 to 3.75–4.00% by Q1 2026. SORA has tracked this decline.

What the market expects for 2026:

Fed Funds futures (as of March 2026) price in one or two further 25bp cuts in 2026, taking the Fed to approximately 3.25–3.50% by year-end
If that materialises, 3M SORA could fall to approximately 0.75–0.85% by late 2026
The SMRA (Special CPF Mortgage Rate Administered by HDB) is pegged at 0.10% above the CPF Ordinary Account rate (2.50%), giving a floor rate of 2.60% for HDB loans — this remains unchanged

The risk scenario: If US inflation re-accelerates — for example, from tariff-driven cost increases — the Fed could hold or even hike. In that scenario, SORA stays flat or rises, and floating-rate borrowers gain nothing vs. locking in today.

Fixed vs. Floating: A Decision Framework

The right choice depends on three variables: your loan quantum, your lock-in tolerance, and your rate view.

Choose Fixed if:

You are risk-averse or budget-constrained. A fixed rate gives you certainty on monthly repayments for 2–3 years. On a S$1,000,000 loan at 1.55% vs. a potential rate rise to 2.5%, the difference in monthly repayments is approximately S$450/month.
You believe rates will not fall much further. If SORA is already at 1.05% and the Fed is near its terminal rate, the additional savings from floating are small. Floating at 1.50% effective vs. fixing at 1.55% saves you approximately S$42/month per S$1M borrowed — barely worth the uncertainty.
You are buying a new launch with completion 2–3 years away. During the progressive payment period you are not yet drawing down the full loan, so locking in today's fixed rate for the construction period makes sense.

Choose Floating if:

You believe SORA will fall another 50–75bp. If 3M SORA drops from 1.05% to 0.50% and your spread is 0.50%, your effective rate would be 1.00% — meaningfully below the current fixed rate of 1.50–1.65%.
You plan to sell or refinance within 2 years. Lock-in periods typically match the fixed rate term (2–3 years). Breaking early incurs a penalty, usually 1.50% of the outstanding loan amount. If you might sell, floating is safer.
You have a large loan and the rate differential matters. On a S$2M loan, even a 0.50% rate difference is S$10,000/year in interest. The downside risk of floating is real, but so is the upside.

CPF vs. Bank Loan: The HDB Buyer's Consideration

For HDB flat buyers, the HDB Concessionary Loan (pegged at 2.60% flat) remains relevant. Unlike bank loans, HDB loans carry no lock-in period (you can switch to a bank loan any time without penalty), allow full CPF OA usage for repayment, and do not require mortgage-reducing term assurance (MRTA). At 2.60%, the HDB loan is significantly more expensive than current bank rates. However, the optionality and simplicity have value for first-time buyers who are uncertain about their financial position.

A common strategy: take the HDB loan initially, then refinance to a bank loan after the MOP or once you are more settled, timing the switch when bank rates are favourable.

Refinancing: Is Now the Right Time?

If you are currently on a floating-rate package that you took out in 2022–2023 when spreads were lower, your effective rate may now be higher than what new customers are offered.

Check your existing package: If your current effective rate is above 2.0%, you are almost certainly paying above market. Refinancing costs (legal fees, valuation, processing) typically run S$2,500–S$4,000 total. If the rate saving is 0.30% or more on your outstanding loan, break-even is typically under 18 months.

Lock-in expiry matters: If your lock-in has just expired or expires within the next 3 months, this is the optimal time to refinance without penalty. Check your loan documents for the exact expiry date — missing the window and staying on the reversion rate (often SORA + 1.00% or higher) is one of the most common and costly mistakes Singapore borrowers make.

FAQ

What happens to my monthly repayment if SORA rises 1%?

On a S$800,000 loan with 25 years remaining, a 1% increase in the effective rate adds approximately S$370 to your monthly repayment. On a S$1.5M loan, that is roughly S$690/month. This is the stress-test scenario MAS requires banks to use under TDSR rules — your loan is assessed at the actual rate plus a 3% buffer, meaning you must qualify at 4.55%+ even if your current rate is 1.55%.

Can I switch from fixed to floating mid-package?

Not during the lock-in period without incurring an early repayment penalty (typically 1.50% of the outstanding loan amount). Once the lock-in expires, you can reprice (stay with the same bank on a new package — lower cost, usually S$500–S$800) or refinance (move to a new bank — higher cost at S$2,500–S$4,000 but potentially a better rate).

Are foreign borrowers treated differently?

Yes. Under TDSR rules, foreign income is haircut by 30% when computing borrowing capacity. The maximum LTV for foreigners buying private property is 75% for the first property, versus 75% for Singapore Citizens as well (same for the first property, but Citizens retain the 80% LTV option with certain older loan products). The loan rates offered are the same regardless of nationality.

Bottom Line for March 2026

At current spreads, fixed and floating rates are nearly identical. The decision is a bet on direction: if you believe SORA falls another 50bp or more, floating wins; if you think we are near the floor or rates could tick back up, fixing at 1.40–1.65% for 2–3 years locks in a historically low rate and removes uncertainty from your household budget.

For most owner-occupiers on tight monthly budgets, the certainty of a fixed rate is worth the small premium. For investors managing multiple properties or those with shorter intended hold periods, floating offers more flexibility.

More financing guides

Buying, selling or investing in Singapore property?