As at 8 October 2026, 3-month compounded SORA was 1.23%, according to MAS, which makes floating home loans priced at SORA plus a spread cheaper than most loans taken in 2023 and 2024. Whether you should fix or float depends on whether SORA stays low: in our example, a floating loan at SORA plus 0.60 percentage points beats an assumed 1.95% two-year fixed rate only if SORA averages below about 1.35% over the two years.
Figures as at 10 October 2026. Check the official source before acting.
What is SORA and how does it set your loan rate?
The Singapore Overnight Rate Average (SORA) is the SGD interest-rate benchmark that MAS administers and publishes each business day. It replaced SIBOR and SOR, which were discontinued (SIBOR after 31 December 2024). Most floating home loans are priced as 3-month compounded SORA plus a fixed spread, and the rate resets every three months.
| Measure | Value | Source and date |
|---|---|---|
| 3-month compounded SORA | 1.2310% | MAS, 8 Oct 2026 |
| Stress rate banks use for TDSR | 4% a year (or the actual rate, if higher) | MAS, since 30 Sep 2022 |
Fixed or floating: what is the breakeven?
This is a hypothetical example with assumed rates, not bank quotes.
| Assumption | Value |
|---|---|
| Outstanding loan | S$1,000,000 |
| Remaining tenure | 25 years |
| Current rate (package after lock-in) | 3.50% a year |
| Floating option | SORA plus 0.60 percentage points; starts at 1.83% |
| Fixed option | 1.95% a year for 2 years |
| Comparison period | 24 months |
Monthly instalments at each rate (25 years, S$1,000,000):
| Rate | Monthly instalment | Interest over 24 months |
|---|---|---|
| Stay at 3.50% | S$5,006 | S$68,281 |
| Floating at 1.83% (SORA flat at 1.23%) | S$4,156 | S$35,480 |
| Fixed at 1.95% | S$4,214 | S$37,825 |
| Floating at 2.83% (SORA up 1 point to 2.23%) | S$4,654 | S$55,079 |
What this shows:
- Moving off 3.50% saves the most. Either option cuts interest by roughly S$30,000 to S$33,000 over two years in this example.
- Floating wins if SORA stays flat, by about S$2,345 over two years (S$37,825 - S$35,480).
- Fixed wins if SORA rises. If SORA averaged 1 percentage point higher, the floating loan would cost about S$17,254 more than the fixed loan over two years.
- Breakeven. The floating loan matches the fixed rate when SORA plus 0.60 equals 1.95%, that is, when SORA averages about 1.35% over the period.
The instalment is calculated as: loan x (r / 12) / (1 - (1 + r / 12)^-300), where r is the annual rate.
How much does a change in SORA change my instalment?
For the same S$1,000,000 loan over 25 years at SORA plus 0.60 percentage points, each 0.5-point move in SORA changes the monthly instalment by roughly S$240 to S$260:
| 3-month compounded SORA | Loan rate | Monthly instalment | Change from today |
|---|---|---|---|
| 0.73% | 1.33% | S$3,920 | -S$236 |
| 1.23% (8 Oct 2026) | 1.83% | S$4,156 | S$0 |
| 1.73% | 2.33% | S$4,401 | +S$245 |
| 2.23% | 2.83% | S$4,654 | +S$498 |
| 2.73% | 3.33% | S$4,916 | +S$759 |
These are illustrative scenarios, not forecasts. Because 3-month compounded SORA looks back over the previous three months, a floating rate typically moves gradually rather than overnight. If a S$500 rise in your monthly instalment would strain your budget, a fixed rate for the lock-in period gives you certainty in exchange for a slightly higher starting rate.
Do TDSR rules stop me from refinancing?
| Situation | Rule | Source |
|---|---|---|
| Refinancing an owner-occupied home | Exempt from the TDSR threshold | MAS |
| Refinancing an investment property | Can exceed the threshold if you commit to repay at least 3% of the outstanding balance over no more than 3 years and meet the bank's credit assessment | MAS, 2016 |
| Cash-out or equity term loan | Subject to TDSR | MAS |
See MAS's refinancing rules for housing loans.
Should I reprice or refinance?
| Repricing (same bank) | Refinancing (new bank) | |
|---|---|---|
| What it is | Switch to another package with your current bank | Move the loan to another bank |
| Legal work | Usually none | Lawyer needed for the new mortgage |
| Typical costs | Conversion fee | Legal and valuation fees, often subsidised by the new bank |
| Catch | Packages may not be the lowest on the market | Subsidies may be clawed back if you redeem within a set period |
Lock-in periods, prepayment penalties, redemption notice periods and subsidy clawbacks are contract terms. They are set by each bank in your letter of offer, not by law.
How do I refinance, step by step?
- Find your lock-in end date and any prepayment penalty in your current letter of offer.
- Check for clawbacks of legal or valuation subsidies from your previous refinance.
- Ask your current bank for repricing offers, and compare them with other banks' packages.
- Compare total cost over the lock-in period, not just the first-year rate, using the formula above.
- Give redemption notice in line with your loan contract (often around three months).
- Sign the new letter of offer and let the lawyer complete the mortgage and redemption.
What to check for your own situation
- Your outstanding balance, remaining tenure and current rate.
- The exact SORA spread or fixed rate on offer, and how the rate changes after the lock-in.
- Penalties for redeeming early, and clawback periods on subsidies.
- Whether the refinancing exemption from TDSR applies to you.
- How much a 1-percentage-point rise in SORA would add to your monthly instalment.
Related guides
- SORA home loans in 2026
- Home loan refinancing in Singapore
- In-principle approval vs letter of offer
- How much can I borrow? calculator
Sources
- Monetary Authority of Singapore: SORA, Refinancing rules for housing loans, TDSR rules on refinancing fine-tuned (2016), MSR and TDSR rules
Frequently asked questions
What is 3-month compounded SORA now?
MAS published 3-month compounded SORA at 1.2310% on 8 October 2026. Floating home loans in Singapore are usually priced as SORA plus a fixed spread.
Should I choose a fixed or floating home loan in 2026?
A floating loan is cheaper only if SORA stays low enough over the lock-in period. In our example, a floating loan at SORA plus 0.60 percentage points beats an assumed 1.95% fixed rate only if SORA averages below about 1.35% over two years; the fixed rate protects you if SORA rises.
Does TDSR apply when I refinance my home loan?
Refinancing a loan on an owner-occupied home is exempt from the TDSR threshold. For an investment property, you can refinance above the threshold if you commit to repay at least 3% of the outstanding balance over no more than three years and meet the bank's credit assessment.
What is the difference between repricing and refinancing?
Repricing means switching to a new package with your current bank, usually for a conversion fee and without new legal work. Refinancing means moving the loan to another bank, which needs a lawyer and a valuation; banks often subsidise these costs but may claw the subsidy back if you redeem within a set period.
What costs should I check before refinancing?
Check your current lock-in penalty, the notice period for redemption, any clawback of legal subsidies from your last refinance, and the new bank's legal, valuation and clawback terms. These are contract terms set by each bank, so read your letter of offer.