Fixed vs Floating Mortgage 2026: What Happens When Your Lock In Expires

By Winfred Quek · CEA R073319H · 8 minute read · Last reviewed May 2026

Rates and thresholds change. The current figures are kept in one place: the Singapore property rules reference.

Every Singapore mortgage has a lock in period, typically 2 or 3 years for fixed rate packages, during which you cannot switch banks without paying a penalty (usually 1.5% of the outstanding loan). When that period ends, most homeowners do nothing. And that inaction costs them.

The bank's standard "board rate", what your loan defaults to post lock in, is designed to be uncompetitive. It exists to capture the inertia of borrowers who do not reprice or refinance. In 2026, most major bank board rates sit at 2.5 to 3%, compared to promotional rates of 1.4 to 1.6%. On an $800K loan, that gap costs you $8,000 to $12,000 a year in unnecessary interest.

How Singapore Mortgages Work: The Lock In Mechanics

A typical Singapore home loan has three phases:

Fixed Rate vs Floating Rate: The 2026 Picture

Fixed Rate Packages (2026)

Singapore banks offer fixed rate packages where the interest rate is locked for 2 or 3 years regardless of market movements. In May 2026, the best fixed rates from major banks (DBS, OCBC, UOB, Standard Chartered) are approximately:

• 2 year fixed: ~1.4% p.a.
• 3 year fixed: ~1.5% p.a.

Fixed rates offer certainty, your monthly payment does not change for the lock in period, making budgeting easier. The trade off: if SORA falls further, you are locked in above the market rate.

Floating Rate Packages (SORA based, 2026)

Since 2021, Singapore bank floating rate packages are pegged to SORA (Singapore Overnight Rate Average) rather than SIBOR. The 3 month compounded SORA rate in May 2026 is approximately 0.8%. Banks add a spread of 0.6 to 0.8%, giving an effective floating rate of approximately 1.4 to 1.6% p.a.

Floating rates can move up or down with the rate environment. In a falling rate environment (as in 2026), a floating rate means you benefit immediately from rate cuts without waiting for a lock in to expire. The risk: rates can also rise quickly if the global environment shifts.

Monthly Payment Comparison: $800K Loan

Based on $800,000 outstanding loan over 25 year remaining tenure. Monthly payment and annual interest are approximations. Actual figures depend on amortisation schedule and loan balance at repricing date.

Repricing vs Refinancing: What's the Difference?

Repricing (Same Bank)

Repricing means switching to a new package within your existing bank. Advantages: no legal fees, faster process (typically 1 to 2 weeks), no new valuation required. Disadvantage: the bank's repricing packages are usually less competitive than what they offer to new customers. The bank knows you have switching costs, so they offer a rate slightly above their best promotional rate for new borrowers.

Refinancing (New Bank)

Refinancing means moving your loan to a completely new bank. The new bank typically offers their best promotional rates, and often subsidises your legal fees to win your business. Legal fees for refinancing are typically $2,000 to $3,000, but the new bank often provides a legal fee subsidy of $1,800 to $2,500, bringing your out of pocket cost down to $0 to $500.

Refinancing takes longer, approximately 4 to 6 weeks from application to completion, which is why you should start 3 to 4 months before your lock in expires.

The Repricing vs Refinancing Decision Matrix

When to Fix vs Float in 2026

The fixed vs floating decision depends on your view of the interest rate environment and your personal risk tolerance:

• Fix if: You want certainty for budgeting. You think rates will rise. You have a tight monthly cash flow and cannot absorb rate increases. A 3 year fixed at 1.5% gives you certainty through 2029.
• Float if: You think SORA will stay low or fall further (likely in 2026 as the Fed continues easing). You are comfortable with rate volatility. Your cash flow has buffer to absorb a potential 0.3 to 0.5% rate movement.
• Hybrid approach: Some borrowers split their loan, fix a portion and float the remainder. This is available at some banks and provides partial rate certainty with partial benefit from rate falls.

Your Lock In Expiry Action Plan

Related reading

• Bridging Loan Singapore: The Complete Playbook
• HDB Upgrader's Handbook
• Singapore Property Yield by District 2026
• Mortgage Calculator

Winfred Quek is a Director of Crestbrick Pte Ltd. CEA R073319H. Information on this page is general and does not constitute financial, investment, or mortgage advice.

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Frequently asked questions

What happens when my Singapore mortgage lock in expires?

When your mortgage lock in period ends, your loan automatically moves to the bank's prevailing board rate, typically 2.5 to 3%, unless you take action. This is significantly higher than the promotional rate you were on. You should apply to reprice (switch to a new package with the same bank) or refinance (switch to a new bank) 3 to 4 months before expiry to avoid the board rate penalty.

What is the best mortgage rate in Singapore in 2026?

In May 2026, the best fixed mortgage rates from major Singapore banks are around 1.5% for a 3 year fixed package. The best floating (SORA based) rates are approximately 1.4 to 1.6% effective, based on 3 month compounded SORA of ~0.8% plus a bank spread of 0.6 to 0.8%. Rates vary by bank, loan size, and package terms, always compare at least 3 banks before deciding.