Home loan rates are rising again. Should you fix, float or refinance?
Are Singapore home loan rates going up?
Yes. On 17 September the US Federal Reserve raised rates by 0.25 percentage point, its first hike in three years. Banks here moved quickly. By early October, at least four fixed-rate packages for a $500,000 loan had crossed 2%, and floating packages sat at around 1.5% to 1.8%, up from the 1.4% range a few months ago. The HDB concessionary loan is unchanged at 2.6%.
For most of 2026, borrowers had it easy. Compounded SORA, the benchmark for floating home loans, bottomed out at around 1% in the second quarter, and the best packages were priced in the low 1.4% range. That window is closing.
What changed at the banks
According to checks by The Straits Times, reported on 2 October:
- Fixed rates are up. Maybank's three-year fixed package was at 2.55% and OCBC's at 2.08%. Citi had a two-year fixed at 2.2%, and Standard Chartered raised its one- and two-year fixed packages by 0.2 percentage point to 2%.
- Why fixed rates moved first. Banks price fixed packages off Singapore dollar swap rates, which reflect their own funding costs over one to three years. Those swap rates rose by almost 0.3 percentage point in September. OCBC said it raised its fixed rates by about 0.2 point in response.
- Floating rates are following. One- and three-month compounded SORA are now hovering around 1.2%. A floating loan is SORA plus a fixed bank spread, so as SORA rises, your rate rises with it.
- One-year fixed packages have mostly gone. Most banks have withdrawn them. Where they remain, they usually come with a two-year lock-in.
Will it keep going? Markets expect one more US hike this year and another by early 2027. But Singapore manages inflation through the exchange rate, not interest rates, and banks here are flush with liquidity. So DBS's strategists don't expect local rates to climb as far as US rates. Some mortgage brokers think floating rates could rise for another year before easing.
What it costs you, in real dollars
Take a $500,000 loan over 25 years:
| Interest rate | Monthly instalment |
|---|---|
| 1.4% (the best rates earlier this year) | about $1,976 |
| 1.8% (top of today's floating range) | about $2,071 |
| 2.08% (OCBC's three-year fixed) | about $2,139 |
| 2.6% (HDB concessionary loan) | about $2,268 |
Going from 1.4% to 2.08% adds about $163 a month, or roughly $1,950 a year. That's noticeable, but it isn't a shock.
There's also some reassurance in the rules. When you apply for a bank loan, MAS requires the bank to test whether you could afford it at 4%, even if your actual rate is much lower. At 4%, that same $500,000 loan works out to about $2,639 a month. So unless rates go far higher than anyone is forecasting, a rise of this size doesn't change how much you can borrow. It only changes what you actually pay.
Fixed or floating?
Think of a fixed rate as insurance. Today, fixing at around 2% costs you a bit more than floating at around 1.6%. Over the first two years on a $500,000 loan, that's about $3,900 more in interest. You come out ahead on the fixed rate if floating rates average more than about 2% over those two years, which would need SORA to rise roughly another 0.4 to 0.5 point and stay there.
Here's how I'd frame the choice:
- If a rate jump would strain your budget, fixing buys certainty, and the premium for it is small right now.
- If you might sell, upgrade or refinance within two to three years, pay attention to the lock-in more than the rate. A slightly higher rate with a shorter lock-in can be the better deal. One owner told The Straits Times he chose a two-year fix over a three-year one for exactly that reason.
- If you have a cash buffer and can ride out a year of higher instalments, floating keeps you free to switch if rates turn down. Some brokers expect that to happen if higher living costs tip the economy into a slowdown.
HDB owners have a third option
The HDB concessionary loan has stayed at 2.6% (the CPF Ordinary Account rate plus 0.1 point) for about two decades, and it doesn't move with SORA. Several banks now offer HDB-specific packages below it. OCBC had a five-year fixed at 2.28%, and DBS had a three-year fixed at 2.08%. DBS also offers a package pegged below the CPF rate for the whole loan: 1.78% for the first three years, 2.2% in years four and five, and 2.4% after that.
One rule to know before you switch: you can refinance an HDB loan to a bank, but you can't go back to an HDB loan later. If you value the HDB loan's stability, that's a one-way door.
Before you refinance: a quick checklist
- Check your current lock-in. Leaving early can cost a penalty, often around 1.5% of the outstanding loan.
- Check for clawbacks. Banks that subsidised your legal or valuation fees may claw them back if you leave within a set period.
- Do the sum. Add up the interest you'd save over the new lock-in period, then subtract penalties, clawbacks and new legal fees. If the result is small, consider repricing with your own bank instead, which is usually cheaper.
- Compare the whole package, beyond the headline rate. Look at how the rate changes after year one or two, the lock-in, and whether you can make partial repayments without fees.
- Check the date your current rate ends. Banks will usually let you lock in a new package about three months ahead.
If you're buying this quarter, the question is less about predicting rates. It's whether your budget still works if rates rise another half a point. Run your numbers through our mortgage calculator at both today's rate and 0.5 point higher, and decide with that in front of you.