SORA at a 3-Year Low: Should You Fix or Float Your Mortgage Right Now?
The 3-month compounded SORA is sitting at around 1.12% right now. That’s the lowest it’s been since mid-2022, when rates were just starting their brutal climb upward.
For anyone with a floating rate mortgage, that’s good news. Monthly instalments have quietly dropped. For anyone sitting on the fence about buying, it’s the question everyone’s asking: do I lock in fixed now, or ride the float?
Let me break it down.
What’s actually happening with rates
To understand where we are, it helps to see where we’ve been.
Approximate quarterly averages. Source: MAS / public market data.
SORA has been falling since late 2024, and it’s come down meaningfully. The 1-month SORA is around 1.04%, the 3-month at about 1.12%. Banks are offering floating packages at SORA + 0.6% to 0.8%, which means effective rates of roughly 1.7% to 2%.
Fixed packages? You’re looking at 1.3% to 1.8% depending on the bank and tenure.
That spread between fixed and floating is unusually narrow right now. Which is exactly why the decision is harder than usual.
The case for floating
If UOB’s forecast holds (and they’re usually pretty calibrated on this), SORA is expected to bottom out around Q2 2026 at roughly 1.0%, then creep back up toward 1.39% by year end.
That’s not dramatic. We’re talking a move of maybe 0.3 to 0.4 percentage points over the next 12 months. On a $1M loan, that’s around $250 to $330 extra per month at most. Manageable, if you’ve stress-tested properly.
So if you believe rates stay low for at least 12 to 18 months, floating makes sense. You capture the lower rate now, and you can always refinance later.
The case for fixing
Here’s the thing about fixing: it’s not really about the rate. It’s about sleep.
If you bought at the edge of your TDSR, or you’re juggling school fees and renovation loans and parents’ medical bills (very Singapore), then knowing exactly what your mortgage costs every month has real value. You’re paying a small premium for certainty.
The other consideration: if global macro conditions shift, SORA can move faster than forecasts suggest. It did in 2022, going from sub-1% to over 3.7% in less than a year. Nobody called that one cleanly.
Fixing at 1.5% for 2 years means you’re protected even if things get weird.
What I’d actually do
If your loan is large relative to your income and you’re buying a property you absolutely need to stay in, fix. The premium is small, the peace of mind is worth it.
If you’ve got buffer, if you’re buying an investment property, or if you’re refinancing an existing one with comfortable headroom, consider floating or a hybrid package (some banks offer 1-year fixed + floating thereafter).
Don’t chase the absolute lowest rate. The difference between 1.5% fixed and 1.7% floating on a $800K loan is about $133/month. That’s not the variable that’ll make or break your investment thesis.
The bigger picture
The real story here isn’t fixed vs floating. It’s that mortgage costs in Singapore are genuinely reasonable right now.
At 1.7% to 2% all-in, property investment math looks a lot more attractive than it did in 2023 when you were paying 4%+. Gross yields on many condos have held at 3% to 4%. That means you can be cash-flow neutral, or close to it, on a leveraged purchase.
That window probably doesn’t stay open forever. Banks are forecasting SORA to edge up in H2 2026, and any surprise inflationary pressures could accelerate that.
So whether you’re buying your first home or refinancing an investment property, now’s a reasonable time to do the math seriously. The numbers are probably better than you expect.
