SORA Near 1 Percent: Is This the Floor to Refinance

Three month compounded SORA has held roughly between 1.0 and 1.5 percent through 2026. If your lock in period is ending in the next few months, you are probably asking the same question every homeowner in this position asks: is this rate the floor, and does it make sense to switch packages now, or wait for it to drift lower still.

This is not an explainer of what SORA is, our SORA explained guide covers that ground. This is about the decision in front of you: whether to refinance now, what a break even calculation actually looks like, and what a clawback clause quietly costs you if you get the timing wrong.

Money: the break even calculation that actually matters

Every refinance has an upfront cost and a monthly saving. The break even calculation is simple in structure, even if the inputs vary by bank and package: divide the total switching cost by the monthly saving, and you get the number of months before the switch pays for itself.

If your break even period is comfortably shorter than the time you expect to hold the property or the loan, refinancing clears the bar. If it stretches close to or beyond your expected holding period, the switch may not be worth the paperwork, even if the new rate looks attractive on paper.

Money: what lock in and clawback clauses cost you

Most fixed and floating packages carry a lock in period, commonly 2 to 3 years, during which an early exit triggers a penalty. Two separate costs can apply if you leave before that period ends.

• Early redemption penalty: a percentage of the outstanding loan, charged by your current bank for repaying the loan ahead of the lock in period ending.
• Legal fee subsidy clawback: if your current bank covered your legal costs when you first took the loan, most packages claw that subsidy back in full if you refinance away before the lock in ends.

Both costs go straight into the break even calculation above as part of the switching cost. If your lock in is ending within the next few months, the clean move is usually to wait those months out rather than pay a penalty to exit early, unless the rate gap is wide enough to absorb the penalty and still break even quickly. Ask your current bank for the exact clawback and penalty figures in writing before you sign anything with a new lender, since these vary by bank and by the specific package you took.

Timing: signs to watch for a turn

Nobody can call the exact bottom of a rate cycle, and anyone who promises to is guessing. What you can do is watch the signals that tend to move ahead of a shift in SORA.

• US Federal Reserve policy signals. SGD interest rates track global funding conditions closely, so a change in expected Fed policy direction typically shows up in SORA within weeks.
• MAS monetary policy statements. The Monetary Authority of Singapore publishes its policy stance and outlook, which frames the broader direction for local rates even though SORA itself is market determined.
• Bank package repricing. When several banks quietly reprice their fixed rate packages lower or higher within a short window, that is often a earlier read on where floating rates are headed than SORA itself.

If you see these signals pointing toward further declines and your lock in still has a long stretch to run, there is little cost to waiting and watching. If your lock in is ending soon regardless of these signals, the decision is really about your own break even math, not about timing a market bottom you cannot control.

Timing: fixed or floating at these levels

With SORA sitting near what looks like a low point in the cycle, floating packages tied to SORA are currently competitive against fixed rate packages, which are typically priced with a premium for rate certainty. The decision comes down to your appetite for a rate increase during your loan tenure versus the comfort of a known payment. Our comparison of SORA against fixed rate mortgages walks through this trade off in more depth, and the refinance window guide looks at how to time the switch itself once you have decided which type of package suits you.

Safety: check before you sign

Before committing to any refinance, get the exact numbers in writing: your current lock in end date, the exact clawback and penalty amounts if you exit early, the new package's own lock in period, and the legal and valuation costs on the new loan. Run the break even calculation on those actual figures, not a rough estimate, and compare that period against how long you realistically expect to keep the loan. Our mortgage rates tool is a useful starting point to compare current packages side by side before you approach a bank or broker directly.

Frequently asked questions

Is SORA at its floor near 1 percent?

Nobody can confirm a floor in real time. Three month compounded SORA has held roughly between 1.0 and 1.5 percent through 2026, and the direction from here depends on global funding conditions and MAS policy signals rather than any fixed level. Treat any claim of a confirmed floor as a guess, not a fact.

How do I calculate the break even period for refinancing?

Divide your total switching cost, including legal fees, valuation, any early redemption penalty and any legal fee subsidy clawback, by your expected monthly interest saving from the rate gap between your old and new package. The result is the number of months before the switch pays for itself. Compare that period against how long you expect to hold the loan.

What does a clawback clause cost me if I refinance early?

A legal fee subsidy clawback requires you to repay the legal costs your bank covered when you first took the loan, in full, if you refinance away before your lock in period ends. This is separate from any early redemption penalty on the outstanding loan itself. Ask your current bank for the exact figures in writing before comparing new packages.