Fixed Rate vs SORA Home Loan in Singapore: Which Should You Choose?
Quick answer
A fixed-rate mortgage locks your rate for a stated period; a SORA-linked mortgage moves with compounded SORA plus the bank’s spread. Today the lowest 2-year fixed rate is 1.40%* and the cheapest SORA package is 3-month SORA + 0.20% = 1.4169%*. That puts the break-even at a 3-month SORA of 1.20%: above it, fixed is cheaper; below it, SORA is.
The question that matters
At what SORA level does the floating package become cheaper or more expensive than the fixed package? That gives you a measurable break-even point instead of relying only on a rate forecast. Today it is 1.20% – and SORA is at 1.2169%.
Fixed vs SORA at a glance
| Fixed rate | SORA-linked | |
|---|---|---|
| Rate, years 1-2 | 1.40%, locked* | 3M SORA + 0.20% = 1.4169% today* |
| Rate, year 3 | 3M SORA + 0.50% | 3M SORA + 0.65% |
| Rate, year 4 onwards | 3M SORA + 1.00% | 3M SORA + 0.75% |
| Monthly payment | Fixed for 2 years | Changes as SORA resets |
| Benefit if rates fall | Not during fixed period | Yes |
| Protection if rates rise | During fixed period | No |
| Lock-in | 2 years | 2 years |
*Package rates apply to loans of $1.5M and above, available through Home Loan Whiz as at 21 September 2026. The 1.40% package also requires signing up for priority banking with that bank and placing $200,000 in deposits. SORA: Monetary Authority of Singapore, published 21 September 2026. Rates change monthly. Comparison uses the lowest fixed and lowest SORA package in our current table.
Neither structure is automatically better. And notice what happens after year 2: the fixed package turns into a SORA package too. The fixed-versus-SORA choice is really a 2-year decision – after that, only the spread differs.
What is a fixed-rate home loan?
A fixed mortgage keeps your interest rate unchanged for the period stated in the package – 2 or 3 years on the packages we track. After that, the loan moves to the pricing in your Letter of Offer, which on every package we track is SORA plus a spread.
If market rates rise, your rate stays the same during the fixed period. If they fall, you do not benefit until the fixed period ends.
What is a SORA home loan?
SORA stands for the Singapore Overnight Rate Average. MAS administers SORA, which is based on transactions in Singapore’s unsecured overnight interbank SGD cash market. Mortgage packages reference compounded SORA – 1-month or 3-month – plus a spread charged by the bank.
Simplified pricing
Compounded SORA + bank spread = package interest rate. For example, 3-month compounded SORA of 1.2169% (MAS, 21 Sep 2026) + a 0.20% spread = 1.4169%.
The calculation most borrowers should understand: break-even SORA
Choosing between the 1.40% fixed package and the 3M SORA + 0.20% package, the rate-only break-even SORA is 1.40% – 0.20% = 1.20%.
On a $1,500,000 loan over 25 years, here is what each SORA level would mean over the 2-year lock-in:
| If 3M SORA is… | SORA package rate | Monthly instalment | Interest over 2 years | vs fixed at 1.40% |
|---|---|---|---|---|
| 0.7169% (0.50 lower) | 0.9169% | $5,597 | $26,563 | $14,080 cheaper |
| 1.2169% (today) | 1.4169% | $5,941 | $41,136 | $494 dearer |
| 1.7169% (0.50 higher) | 1.9169% | $6,297 | $55,767 | $15,124 dearer |
| 2.2169% (1.00 higher) | 2.4169% | $6,667 | $70,450 | $29,807 dearer |
| Fixed at 1.40% | – | $5,929 | $40,643 | – |
*Illustration using Home Loan Whiz package data as at 21 September 2026. SORA moves are hypothetical, held for the full 2 years, not forecasts.
At today’s SORA the difference is $494 over two years – close to nothing on a $1.5M loan. And the risk is not symmetrical: a 0.50-point rise costs more ($15,124) than an equal fall saves ($14,080).
What does that difference mean in dollars?
On a $1,000,000 balance, a 0.10 percentage-point difference is roughly $1,000 a year, 0.25 points roughly $2,500 and 0.50 points roughly $5,000, before amortisation. For a $2 million mortgage, the dollar impact doubles.
For a SORA package on $1.5M over 25 years, every 1-point rise in SORA adds about $726 to the monthly instalment. Fixed removes that risk for 2 years; SORA leaves it with you.
Home Loan Whiz Adviser Insight
Think in break-even terms
We generally would not choose between fixed and SORA simply based on a prediction of the next interest-rate move. A better question is: how wrong can your interest-rate view be before the alternative package becomes better? If fixed is only marginally more expensive, some borrowers may value the certainty. If the gap is substantial, you are effectively paying more for that certainty. If you expect to sell or refinance relatively soon, flexibility and lock-in conditions may matter just as much as the initial rate.
1-month vs 3-month SORA: what’s the difference?
MAS publishes compounded SORA for one-month, three-month and six-month tenors. A shorter tenor responds faster to changes in overnight rates; a longer tenor averages over a longer window.
You can see this in September 2026: 1-month SORA fell from a high of 1.3266% to 1.2380%, while 3-month SORA rose from 1.1905% to 1.2169% (MAS, value dates 1-18 Sep). 1M SORA is not automatically cheaper than 3M, and 3M is not automatically safer – compare the all-in rate, SORA plus spread.
5 things to compare before choosing
1. Today’s all-in rate
For a SORA package, compare compounded SORA plus the bank spread against the fixed rate. Do not compare SORA alone.
2. Break-even SORA
Fixed rate minus SORA spread. Today: 1.40% – 0.20% = 1.20%.
3. Lock-in
Both packages here carry a 2-year lock-in and a 1.50% penalty. A lower rate will not compensate for an inflexible package if you are likely to sell or refinance soon.
4. What happens after the initial period?
From year 3 both packages follow SORA; only the spread differs. In our table, the SORA package’s long-run spread (0.75%) is lower than the fixed package’s (1.00%).
5. Your ability to absorb rate changes
If an extra $726 a month would strain your household budget, the certainty of a fixed package has value beyond the pure interest calculation.
If your existing mortgage is still locked in, read: Can You Refinance a Home Loan During the Lock-In Period in Singapore?
Frequently Asked Questions
Is fixed or SORA cheaper?
Today, marginally fixed: 1.40% against 1.4169%. That flips if 3-month SORA falls below 1.20%. Neither structure is permanently cheaper.
Is a fixed rate fixed for the whole loan?
No. On the packages we track, the fixed rate lasts 2 or 3 years, then becomes SORA plus a spread.
Does my SORA rate change every day?
SORA is published daily, but your mortgage rate resets according to the benchmark tenor and mechanics in your loan package.
Can I convert from SORA to fixed later?
Some packages include conversion features, but this varies by bank and package. Check the conditions rather than assuming conversion is free.
Is 1M SORA better than 3M SORA?
Neither is inherently better. They respond differently to underlying rates and may come with different spreads and package terms.
Fixed or SORA? Let us calculate the difference
Send Home Loan Whiz your loan amount, remaining tenure, property type, your existing bank and rate if refinancing, and how much of an instalment increase you can absorb. We’ll compare suitable fixed and floating packages and show you the monthly repayment, interest difference and where your break-even sits.
If you are deciding whether to stay with your bank or move, read: Repricing vs Refinancing in Singapore: Which Could Save You More?
WhatsApp Home Loan Whiz – Compare Fixed vs SORA
Related guides
Sources: MAS – Domestic Interest Rates (compounded SORA); MAS – SORA; MoneySense – How Home Loans Work; package rates, fees and terms: packages available through Home Loan Whiz as at 21 September 2026.
Last reviewed: [date of approval]. Reviewed by Wayne Quek, Founder, Home Loan Whiz.
Reviewed by Wayne Quek, Founder, Home Loan Whiz
Home Loan Whiz helps Singapore homeowners compare mortgage packages across banks, including purchases, refinancing, repricing and more complex financing situations.
