Answer
Fixed vs Floating Mortgage Rate — 2026
The rate type you pick can save or cost you tens of thousands over your loan. Here's what each actually means, what they cost today, and how to decide.
Answer: Fixed rates (2.0–2.5% for a 2-year lock) give you certainty — your monthly payment won't change. Floating SORA-based rates (1.4–1.8%) are cheaper right now but can rise with the market. MAS stress-tests your TDSR at 4% regardless of which you choose. In the current falling-rate environment (2026), floating wins on cost. In a rising-rate cycle, fixed protects you.
Current Rate Comparison (Early 2026)
Typical bank packages for private property, first property
| Package Type | Rate | Monthly ($1,000,000 loan, 25yr) | Lock-in |
|---|---|---|---|
| 3M SORA + spread | 1.4–1.8% | $3,960–$4,120 | None / 2yr |
| Fixed 2-year | 2.0–2.5% | $4,240–$4,440 | 2 years |
| Fixed 3-year | 2.3–2.8% | $4,360–$4,560 | 3 years |
| Hybrid (1yr fixed + float) | 1.8–2.2% | $4,080–$4,320 | 1–2 years |
| MAS stress test (TDSR) | 4.0% | $5,278 | — |
Rates as of Feb 2026. Actual rates depend on bank, loan amount, and your profile. 3M SORA = 3-month compounded SORA.
SORA Rate History (2022–2026)
3-month compounded SORA, approximate mid-year levels
| Year | 3M SORA | Typical floating rate | Environment |
|---|---|---|---|
| 2022 | 1.5–2.5% | 2.5–3.5% | Rapid rate hikes |
| 2023 | 3.5–3.7% | 4.0–4.5% | Peak rates |
| 2024 | 3.0–3.5% | 3.5–4.0% | Starting to ease |
| 2025 | 1.5–2.5% | 2.5–3.0% | Rate cuts underway |
| 2026 (now) | 1.0–1.3% | 1.4–1.8% | Low-rate environment |
People who locked fixed at 4%+ in 2023 are now paying significantly more than those on floating. This is why timing matters.
When to Pick Each
| Scenario | Best Choice | Why |
|---|---|---|
| Rates are low and falling | Floating | You benefit as rates drop further. Locking in would cost you more. |
| Rates are low but expected to rise | Fixed 2–3 years | Lock in the low rate before it goes up. Peace of mind. |
| Rates are high and peaking | Floating | You'll benefit when rates come down. Fixed would lock you into the peak. |
| You value budget certainty | Fixed | Know exactly what you pay for 2–3 years. No surprises. |
| You're planning to sell within 2 years | Floating (no lock-in) | Avoid lock-in penalty. Flexibility to redeem the loan early. |
| You're unsure | Hybrid | Get some certainty upfront, then float. Hedges both ways. |
Cost Difference Over 2 Years — $1,000,000 Loan
25-year tenure, comparing what you actually pay in the first 24 months
| Rate Type | Effective Rate | Monthly | Total (24 months) | vs Floating |
|---|---|---|---|---|
| Floating (SORA) | 1.6% | $4,000 | $96,000 | — |
| Fixed 2-year | 2.3% | $4,290 | $102,960 | +$6,960 |
| Fixed 3-year | 2.6% | $4,410 | $105,840 | +$9,840 |
In the current environment, floating saves roughly $6,960 over 2 years on a $1,000,000 loan. But if SORA spikes back to 3%+, the fixed rate would have saved you instead. It's a bet on direction.
See how your rate choice affects your monthly payment
Plug in your loan amount and see the actual monthly difference between fixed and floating. Takes 2 minutes.
FAQ
What is a fixed-rate mortgage in Singapore?
A fixed-rate mortgage locks your interest rate for a set period (usually 2–3 years). During the lock-in, your monthly payment stays the same regardless of market movements. After the lock-in expires, the rate typically reverts to a floating rate (usually the bank’s board rate or SORA-pegged rate).
What is a floating-rate mortgage in Singapore?
A floating-rate (or variable-rate) mortgage is pegged to a benchmark like SORA (Singapore Overnight Rate Average). Your rate adjusts periodically — typically every 3 months. When SORA drops, your payment goes down. When it rises, you pay more. Most floating packages are priced as SORA + a spread (e.g., SORA + 0.80%).
Is SORA going up or down in 2026?
As of early 2026, 3-month compounded SORA is around 1.0–1.3%, down from peaks of 3.5%+ in 2023. The general trend has been downward as global central banks eased monetary policy. Economists expect SORA to remain relatively stable or drift slightly lower through 2026, making floating rates attractive right now.
Can I switch from fixed to floating mid-loan?
Yes, but not during the lock-in period without paying a penalty (usually 1.5% of the outstanding loan). After the lock-in expires, you can refinance to a different package — fixed or floating — with the same bank or a different one. Most people refinance every 2–3 years to get the best rate.
What is a hybrid mortgage package?
Some banks offer packages that start with a fixed rate for 1–2 years, then switch to a floating rate pegged to SORA. This gives you initial certainty plus the potential upside of lower floating rates later. The fixed portion is typically priced slightly higher than a pure floating rate.
Does TDSR use my actual rate or the stress test rate?
TDSR always uses the higher of your actual rate or the MAS floor rate of 4%. So whether you pick fixed at 2.5% or floating at 1.8%, the bank stress-tests your affordability at 4% regardless. Your rate choice doesn’t affect how much you can borrow — only how much you actually pay each month.
Related
Last updated Feb 2026. Rates are estimates based on current market conditions. TDSR: 55% at 4% stress test (MAS). This is a comparison guide, not financial advice.