SORA home loan packages: how to compare fixed versus floating rate at renewal

Your renewal notice arrives, two offers come with it, and both are priced off SORA. The useful question is not which headline rate is lower. Two SORA home loan packages are only comparable once each one is written down on the same four lines: which SORA series it tracks and how often it is fixed, the bank's mark-up over that series, the lock-in period, and the rate that applies once the fix period ends. Most of what a borrower is actually choosing sits in those last two lines.

That is not a personal preference point. The Monetary Authority of Singapore defines the borrower's "thereafter interest rate" as the highest interest rate a financial institution offers at any time during the tenure of a property loan, and says this highest rate is typically charged after the introductory or lock-in period, with the lender indicating it before you accept the loan. Read a renewal offer with those four lines in front of you, and the comparison stops being about which bank shouted the smallest number this week. ^[1]

What a SORA home loan package is actually made of

MAS defines SORA as the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank Singapore dollar cash market between 8am and 6.15pm. On each Singapore business day, reporting banks send in eligible transaction data, MAS validates it and computes the volume-weighted average, and the rate is published on the MAS website the next business day at 9am. Alongside it, MAS publishes the SORA Index, 1-month, 3-month and 6-month compounded SORA, aggregate volume, the highest and lowest transacted rates, and the calculation method used. So the first question on any offer is simply which of those series is being tracked. ^[2]

Two packages tracking different tenors are not the same product, whatever their headline numbers. And since the remaining LIBOR benchmarks ceased on 30 September 2024, MAS records that financial institutions can no longer reference LIBOR or SOR when charging interest on loans; SORA is the alternative reference rate for Singapore dollar contracts. On top of the series sits the bank's own mark-up, a fixed percentage covering its costs and profits. Reporting published on 2 October 2026 noted that floating-rate mortgages rose as SORA rose while that mark-up stayed unchanged, which is why two offers can drift apart even when the banks are not repricing. ^{[3] [4]}

Where the price sits: the rate after the fix period

MAS's Total Debt Servicing Ratio explainer, published in July 2018, sets out how a thereafter interest rate is worked out when a property loan is applied for: where it is pegged to a floating reference rate, the institution computes it using the value of that reference rate as of the date of loan application, plus the spread. Its example: if the thereafter rate comprises 3-Month SORA plus a 1.5 per cent spread, the lender takes the latest published 3-Month SORA value at the application date and adds 1.5 per cent. Note the scope of that rule — it describes the rate assumed at application, not a promise that a floating post-fix rate is then frozen. Ask the bank instead which series and spread would apply once your fix period ends. ^[1]

Structure makes the difference. In the same 2 October 2026 report, checks found most banks had removed their one-year fixed packages except OCBC and RHB, which let homeowners switch to a cheaper package after a year but require a two-year lock-in and do not allow the loan to be transferred to a competitor. Standard Chartered's one-year fixed option was described as switching in year two to a floating rate pegged to one-month SORA plus 0.4 per cent, inside a strict two-year lock-in. A year of certainty, then two years locked at a floating rate, is a very different product from the same headline. ^[4]

A four-line sheet you can fill in before you call the bank

As an optional preparation exercise, write each offer on four lines: series and fixing frequency; mark-up over that series; lock-in period; post-fix or thereafter rate. Here is a hypothetical illustration. Offer A is fixed at 2.0 per cent for one year, then one-month SORA plus 0.4 per cent for year two, with a two-year lock-in. Offer B floats for the whole term at one-month SORA plus 0.5 per cent with no lock-in. ^[1]

At a one-month SORA fixing of 1.2 per cent, year one costs 2.0 per cent under A against 1.7 per cent under B, so B is the cheaper offer in year one. In year two A floats at one-month SORA plus 0.4 per cent, or 1.6 per cent at the same fixing, against 1.7 per cent under B — so A is 0.1 percentage point cheaper from year two onwards. Which of those two years matters depends on when you expect to move or reprice. ^[1]

Note what moves and what does not. A mark-up is a fixed percentage, so the 0.1 percentage point gap between A's and B's spreads stays constant on the same series and fixing: A's year-two edge does not shrink or reverse because SORA rose. What does move is A's fixed year-one rate set against B's floating one, which rises as the benchmark rises and falls as it falls. That is why you price both offers through the same SORA path and compare the year-two and beyond numbers. ^{[1] [4]}

You can check the benchmark layer yourself. Since SORA for a given Singapore business day is published by 9am the next business day on the MAS website and through redistributors, the figure a lender quotes can be traced to a published series. Note also how corrections work: an erroneous trade must be highlighted to MAS by 11.30am on the day for SORA to be republished; a recalculated rate two or more basis points away from the 9am figure is republished, no later than 12.00pm, once. If a thereafter rate is not stated clearly in writing, ask for it before you sign. ^{[2] [5]}

Where the market stood, and one extra reference point

Some context, dated. That 2 October 2026 report put most floating-rate packages around 1.5 to 1.8 per cent and fixed packages slightly higher, with one-month and three-month compounded Sora near the 1.2 per cent levels after bottoming near 1 per cent in the second quarter of 2026. Redbrick Mortgage Advisory's associate director Clive Chng described a fixed package as buying insurance against unexpected rate increases, with the cost of that insurance still affordable given the narrow gap. Packages change without notice, so treat those numbers as a snapshot, not a quote, and confirm today's terms with your bank. ^[4]

Fixed rates moved for a stated reason: OCBC's head of home loans said swap rates rose by nearly 0.3 percentage point in September and that fixed loan rates were adjusted by around 0.2 percentage point, with banks setting one- to three-year fixed rates off swap rates plus a margin. HDB flat owners were reported to have a separate reference point in a concessionary loan rate pegged 0.1 percentage point above the CPF Ordinary Account rate, said to have held at 2.6 per cent for two decades — check the current terms on HDB's own pages. ^[4]

A renewal decision turns on four numbers, not on which direction SORA is heading: the series and fixings, the mark-up, the lock-in period, and the rate that follows the fix. Write both offers on the same four lines, price them through the same SORA path, and compare the year-two numbers. If the post-fix rate is not stated clearly, ask the bank for the thereafter interest rate before you sign anything. ^{[1] [4]}

Sources

1. Calculating TDSR for Property Loans
2. SORA Interest Rate Benchmark
3. Interest Rate Benchmarks Transition
4. Singapore mortgage rates rise after Fed hike: What homeowners should look out for – The Business Times
5. SORA Interest Rate Benchmark

BUTLER Magazine Editorial · AI-assisted research and writing, reviewed by our automated editorial team. Sources checked 2026-10-10. Featured image: AI-generated editorial illustration.