Comparison · 2026
Singapore bank mortgage rates 2026: the full comparison
By Winfred Quek · 11-minute read · Last reviewed May 2026
Facts verified: May 2026 · Sources linked below
Key Takeaways
- • Bank home loan rates in 2026 are around 1.5% per annum, far below the 2.6% HDB concessionary rate.
- • Fixed-rate packages buy certainty for 2 to 3 years; floating SORA packages buy flexibility.
- • The headline rate is not the whole cost: lock-in period, free conversion, and legal subsidy clawback all matter.
- • A legal subsidy is clawed back if you redeem or refinance inside the lock-in period.
- • Every bank loan is stress-tested at the TDSR medium-term floor rate, not the actual 1.5%.
The home loan is the largest single financial commitment most Singaporeans ever make. A 0.3% difference in rate on a S$1 million loan is roughly S$3,000 a year, and over a 25-year tenure that compounds into real money. Yet most buyers compare loans by glancing at one number: the first-year rate. That is the wrong way to read a mortgage.
This piece puts fixed-rate and floating-rate packages side by side, explains the clauses that actually change your cost, and ends with a clear way to choose. I am not a mortgage broker and I do not earn from your loan choice, so this is the unvarnished version.
What home loan rates look like in Singapore in 2026?
As of 2026, bank home loan rates in Singapore sit at roughly 1.5% per annum. This applies broadly to both fixed-rate packages and floating-rate packages pegged to SORA. Rates move week to week and differ slightly between banks, so treat 1.5% as the working benchmark rather than a guaranteed quote.
For context, the HDB concessionary loan is fixed at 2.6% per annum, pegged at 0.1% above the CPF Ordinary Account interest rate, which is currently 2.5%. That gap is the reason many HDB buyers who qualify for a bank loan choose one, and the reason the bank-versus-HDB decision is rarely about rate alone.
| Loan type | Indicative rate (2026) | Rate behaviour |
|---|---|---|
| Bank fixed-rate package | ~1.5% p.a. | Locked for 2 to 3 years, then reverts to a floating rate |
| Bank floating-rate (SORA) package | ~1.5% p.a. | Moves with compounded SORA plus a bank spread |
| HDB concessionary loan | 2.6% p.a. | Fixed; pegged to CPF OA rate + 0.1% |
Rates are indicative for 2026 and move over time. Always obtain a live quote from the bank before committing.
Fixed-rate vs floating-rate: how do they actually differ?
A fixed-rate package locks your interest rate for an agreed period, usually 2 or 3 years. During that window your monthly instalment does not change, regardless of what SORA does. After the fixed period ends, the loan reverts to a floating rate, and that is the point at which most owners reprice or refinance.
A floating-rate package is pegged to a transparent benchmark, the Singapore Overnight Rate Average (SORA). The bank quotes its rate as compounded SORA (commonly 1-month or 3-month) plus a fixed spread. When SORA rises, your instalment rises; when SORA falls, it falls. According to the Monetary Authority of Singapore, SORA is the chosen benchmark for Singapore-dollar interest rate contracts, replacing the older SIBOR.
The trade-off is straightforward. Fixed gives you a predictable instalment and protection against a rate spike, at the cost of flexibility. Floating gives you flexibility, often a shorter lock-in, and the upside if rates fall, at the cost of certainty.
| Feature | Fixed-rate package | Floating-rate (SORA) package |
|---|---|---|
| Rate certainty | High for the fixed period | None; moves with SORA |
| Typical lock-in | 2 to 3 years | 1 to 2 years, sometimes none |
| Free conversion | Less common | Often included |
| Benefit if rates fall | No, until fixed period ends | Yes, instalment drops |
| Risk if rates rise | Protected during fixed period | Instalment rises |
| Best suited to | Tight budgets, certainty seekers | Buyers wanting flexibility |
What clauses change the true cost of a loan?
The headline rate is the most visible number and the least complete. Three clauses do more to determine your real cost.
Lock-in period
The lock-in is the period during which you cannot fully redeem or refinance the loan without a penalty, typically 1.5% of the outstanding loan amount. If your circumstances might change, selling, relocating, a windfall, a 2-year lock-in is materially more flexible than a 3-year one.
Free conversion (or repricing)
A free conversion clause lets you switch to another of the same bank's packages, once, without refinancing costs. It is most valuable on floating packages: if rates move against you, you can pivot to a fixed package without leaving the bank. Read how many free conversions are allowed and when they can be exercised.
Legal subsidy clawback
Many packages offer a legal subsidy or cash rebate to offset your conveyancing fees. The catch is the clawback: if you redeem or refinance the loan within the lock-in period, often within 3 years, you must repay that subsidy in full. A subsidy is not free money; it is a sum you keep only if you stay put.
How does TDSR affect the loan you can actually get?
Whatever rate you are quoted, the bank does not assess your eligibility at 1.5%. Under the Total Debt Servicing Ratio framework, your total monthly debt obligations, including the new mortgage, cannot exceed 55% of your gross monthly income. According to MAS, the mortgage portion of that calculation is computed using a specified medium-term interest rate floor, currently 4%, not the actual package rate.
Practically, that means two buyers with identical incomes qualify for the same loan size regardless of whether they pick a 1.5% fixed or a 1.5% floating package. The rate you pay and the rate you are tested at are different numbers. The Loan-to-Value limit caps the loan at 75% of the property price or value for a first housing loan, and 45% for a second, so cash and CPF must cover the rest.
How should you actually choose?
Here is the decision rule I give clients, stripped of hedging:
- Choose fixed if your monthly budget is tight, you would lose sleep over a rising instalment, or you are confident you will hold the property through the lock-in. Certainty has a value, and for most first-time buyers it is worth a small premium.
- Choose floating if you have buffer in your cash flow, you want a shorter lock-in, you value the free conversion option, or you may sell or refinance within a couple of years.
- Whichever you pick, diarise the end of your lock-in period. The single most expensive mistake is letting a loan drift onto its post-lock-in floating rate without repricing or refinancing.
Do not try to outguess SORA. Even economists get rate forecasts wrong. Choose the package whose structure fits your life, then review it at the end of the lock-in.
Winfred's Take
The clients who lose money on a mortgage almost never lose it on the headline rate. They lose it by not reviewing the loan when the lock-in ends. They sign a competitive package, then leave it untouched for years while it quietly reverts to a higher floating rate. Set a calendar reminder three months before your lock-in expires and treat that review as non-negotiable. That habit will save you more than picking the perfect package on day one.
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Winfred Quek · CEA R073319H · Crestbrick Pte Ltd
Frequently asked questions
Is a fixed or floating home loan better in Singapore in 2026?
Neither is universally better. At current rates of around 1.5%, fixed and floating packages are priced similarly. Fixed suits buyers who want a predictable instalment and protection against a rate rise. Floating suits buyers who want flexibility, a shorter lock-in, and the benefit if rates fall. The right answer depends on your budget and holding horizon, not on a market forecast.
What is the legal subsidy clawback?
Many home loan packages give you a legal subsidy or cash rebate to offset conveyancing costs. If you fully redeem or refinance the loan within the lock-in period, usually 3 years, you must repay that subsidy. It is money you keep only if you stay with the loan for the agreed period.
Can I switch from a bank loan back to an HDB loan?
No. According to HDB, once you take a bank loan for an HDB flat you cannot switch back to an HDB concessionary loan. You can refinance from one bank to another, but the HDB loan option is closed once you leave it. This is why the initial bank-versus-HDB decision deserves real thought.
Why does the bank stress-test my loan at 4% when the rate is 1.5%?
Under the TDSR framework set by MAS, the mortgage instalment used to assess affordability is computed at a medium-term interest rate floor, currently 4%, even though you pay around 1.5%. The buffer protects borrowers against future rate increases. It means your loan eligibility is the same whether you pick a fixed or floating package.
How often should I review my home loan?
Review it about three months before your lock-in period ends. At that point you can reprice with the same bank or refinance to another, and avoid the loan reverting to a higher post-lock-in floating rate. Many owners pay more than they need to simply because they never revisit the loan.
Sources & References
- MAS: Singapore Overnight Rate Average (SORA)
- MAS Notice 645: Total Debt Servicing Ratio for Property Loans
- MAS Notice 632: Residential Property Loans (LTV Limits)
- HDB: Housing Loan from HDB
- CPF Board: Interest Rates on CPF Savings
Winfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence L31010886H), advising Singapore upgraders, investors, and families. CEA R073319H. The information on this page is general in nature and does not constitute financial, mortgage, or investment advice. Always verify rates and terms with the bank before committing.