Last reviewed: 17 August 2026

SORA vs Fixed Rate Mortgage 2026: The Decision Framework With Current Numbers

By Winfred Quek · CEA R073319H · Crestbrick

Quick answer: By mid August 2026, Singapore 3M compounded SORA has fallen to approximately 1.1%, down sharply from ~2.9% in May 2026. Banks price SORA mortgages at SORA plus a spread of roughly 0.5 to 1.2 percentage points depending on the package, putting floating rates at approximately 1.6 to 2.3% all in; the most competitive packages are close to 2 year fixed rates of 1.6 to 1.65% across DBS, OCBC, UOB and Standard Chartered, though standard packages can still price meaningfully higher. The wide fixed advantage seen earlier in 2026 has narrowed sharply. On a $1M loan the monthly gap between fixed and a SORA package now runs from roughly $0, for the most competitive floating offers, to about $340 for a standard spread, not the $900+ gap seen when SORA was near 2.9%.

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

Facts verified: 17 August 2026 · Sources linked below

Real Example: $1M Loan Fixed vs SORA Over 3 Years

Detail	Fixed 2Y at 1.6%	SORA Floating at 1.72% (competitive spread)
Profile	SC buyer, $1M loan, 25 year tenure, August 2026 purchase
Monthly instalment (Year 1 to 2)	$4,047	$4,104
Monthly difference		+$57/month vs fixed
Total difference over 2 year fixed period		~$1,370 more than fixed
Lock in penalty if selling at Month 18	~$14,700 (1.5% of ~$980K outstanding)	None
Net advantage of fixed if holding full 2yr	~$1,370 ahead, before weighing lock in risk	N/A
Scenario: SORA drifts down further, to 0.8% all in components	Still locked at 1.6%, now worse off	Floating pulls ahead as SORA falls further
Verdict for this client	Now a close call, not the clear win it was in May 2026	Competitive if you can absorb a reset; the cost of flexibility has fallen sharply

Illustrative August 2026 example using SORA + 0.6% (midpoint of the 0.5 to 0.7% bank spread). Always get live quotes. Lock in penalty applies only if you break the fixed period early.

What SORA Actually Is And Why It Matters

SORA (Singapore Overnight Rate Average) replaced SIBOR as the benchmark for Singapore floating rate mortgages from 2024. It is published daily by MAS and reflects the actual volume weighted average rate of overnight interbank SGD transactions.

Unlike SIBOR, which was a forward looking estimate, SORA is backward looking; it is calculated from actual transactions. Banks use 3 month compounded SORA (the geometric mean of daily SORA over 90 days), which smooths out day to day volatility but still tracks global rate movements closely.

SORA does not move in isolation. It closely tracks the US Federal Funds Rate expectations via covered interest parity. When the Fed cut rates in 2024 to 2025, SORA fell from 3.7% (peak 2023) through approximately 2.9% by May 2026, and kept falling to approximately 1.1% by mid August 2026.

Current Rate Landscape: August 2026

Rate Type	Rate (Aug 2026)	Bank Spread	All-In Rate
3M Compounded SORA	~1.10%	+0.50 to 1.20%	~1.60 to 2.30%
2 Year Fixed (DBS/OCBC/UOB/SCB)	1.60 to 1.65%	N/A (all-in)	1.60 to 1.65%
HDB Concessionary	2.60%	N/A (pegged to CPF OA + 0.1%)	2.60%

SORA and 2 year fixed tracked across DBS, OCBC, UOB and Standard Chartered mid August 2026. 1 year SORA and 3 year fixed packages are not tracked here, ask your banker for the current published rate. Check directly with banks for current packages, rates change monthly.

Monthly Payment Impact: $1M Loan at Different Rates

Rate	Monthly Payment (25yr)	Monthly Payment (30yr)	vs Fixed 1.6% (25yr)
Fixed 1.6%	$4,047	$3,499	N/A
Fixed 1.65%	$4,070	$3,524	-$23
SORA all in, low end 1.6%	$4,047	$3,499	$0
SORA all in, competitive spread, 1.72%	$4,104	$3,558	-$57
SORA all in, standard spread, 1.85%	$4,166	$3,622	-$119
SORA all in, wide spread, 2.30%	$4,387	$3,849	-$340
HDB 2.6%	$4,537	$4,003	-$490

Assumes $1,000,000 loan, no fees. Fixed savings apply during the fixed period only.

The Rate Reset Risk With SORA

SORA packages reprice quarterly. Every 3 months, your payment changes based on the prevailing 3M SORA. For budgeting purposes, this means your mortgage is a variable expense rather than a fixed one and when SORA spiked from 0.2% in 2021 to 3.7% in 2023, monthly payments on a $1M SORA loan jumped by over $1,500/month in 18 months. SORA has since fallen back to about 1.1%, but the reset risk works both ways.

The central question is not whether SORA is cheap today, it is whether you can absorb SORA rising 1 to 2% again during your holding period.

SORA rate shock calculation: On a $1M loan at today's ~1.72% all in floating rate, every 1% increase in SORA increases your monthly payment by approximately $490. A 1.5% rise adds approximately $750/month. Before choosing SORA, confirm your household can absorb at least a 1.5% rate increase without financial stress.

Decision Framework: Fixed vs SORA

Your situation	Recommended choice	Why
Planning to sell within 2 to 3 years	Fixed (2yr)	Lock in low rate, exit before reset
Income is tight, buffer is thin	Fixed	Payment certainty protects household cash flow
Buying near peak of rate cycle	Fixed	Rates more likely to fall than rise; lock now
Holding 5 to 7+ years, strong income buffer	SORA (if rates fall further)	Rate savings over longer horizon if SORA drops
Rate savvy, willing to refinance every 2yr	Fixed, refinance cycle	Best of both: lock short, refinance to next best
HDB flat, income near ceiling	HDB loan or bank fixed	SORA not available for HDB loans

Lock In Periods: The Hidden Cost of Flexibility

Fixed rate packages come with lock in periods typically matching the fixed period (2yr fixed = 2yr lock in). If you sell or refinance within the lock in, the bank charges a clawback penalty, usually 1.5% of the outstanding loan amount. On a $1M loan, that is $15,000.

SORA packages often have shorter or no lock in periods, making them technically more flexible. In May 2026, SORA all in rates sat roughly 1.8 to 2.0 percentage points above fixed, a steep premium for that flexibility. By August 2026, with SORA all in pricing close to fixed, that premium has largely disappeared, so the flexibility is now close to free, though the reset risk on the way back up remains.

How to Choose: The 3 Question Framework

Will you sell or fully refinance within 3 years? If yes, fixed still gives you payment certainty and you exit before any reset, though the savings versus floating are now much smaller than earlier in 2026.

Can you absorb a $500 to $750/month increase in payments? If no, take fixed. SORA rising 1 to 1.5% from today's ~1.72% all in floating rate would add roughly that amount to a $1M loan.

Do you expect SORA to stay near current levels or fall further over your holding period? If yes, SORA is now competitive with fixed and worth considering. If you expect a rebound, or you are unsure, take fixed and reassess at renewal.

What to Do When Your Fixed Period Ends

When a 2 year fixed period expires, the bank automatically converts you to a floating rate typically SORA + spread. This is when most borrowers should refinance. At expiry, the clawback penalty disappears and you can move to the best available fixed rate at any bank. Legal fees for refinancing run $2,000 to $3,000 but are often subsidised by the new bank.

Set a calendar reminder 4 months before your fixed period ends. By 3 months out, you should have your new IPA (In Principle Approval) and be ready to serve notice to the current bank.

See the full refinancing playbook in Refinancing Your Singapore Mortgage in 2026.

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Frequently asked questions

What is the current SORA rate in Singapore 2026?

The 3 month compounded SORA had fallen to approximately 1.1% by mid August 2026, down from about 2.9% in May 2026. Banks price SORA mortgages at SORA plus a spread of roughly 0.5 to 1.2 percentage points depending on the package, giving effective floating rates of around 1.6 to 2.3%, with the most competitive packages close to 2 year fixed rates of 1.6 to 1.65%.

Should I take a fixed or SORA mortgage in 2026?

By August 2026 the gap between fixed (about 1.6 to 1.65%) and SORA based floating (about 1.6 to 2.3%, depending on the bank's spread) has narrowed sharply, unlike earlier in the year when fixed was clearly cheaper across the board. The most competitively priced SORA packages now sit at parity with fixed, though standard packages can still price meaningfully higher. Fixed still suits buyers who want payment certainty or plan to sell within the fixed period. SORA now makes sense for more buyers than before, but your payment still resets every quarter and can rise again.

The information and insights on this page are for informational purposes only. SORA and fixed mortgage rates referenced here are indicative and change frequently; confirm current packages with your bank or mortgage broker before committing. This page is not legal, financial, or professional advice, and Winfred is not a licensed mortgage broker. Conduct your own due diligence and seek qualified advice. CEA R073319H. Crestbrick Pte Ltd L31010886H.

How does this apply to your own numbers?

General rules only take you so far. What actually decides your move is your financing, your timeline, and what you already own. A Property Portfolio Analysis maps your real position, so you are deciding on your own figures rather than a rule of thumb.

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