SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of unsecured overnight interbank SGD lending, published daily by MAS. It replaced SIBOR and SOR as Singapore's standard floating-rate benchmark for home loans. Most floating mortgages are now priced as compounded SORA plus a bank spread (as of 2026-06).
If your home loan has a floating rate, the number on your monthly statement is no longer tethered to a poll of banks — it is rooted in actual, verifiable overnight transactions. That is the promise of SORA: a benchmark built from real trades, computed and published by the Monetary Authority of Singapore (MAS) every business day, and now the backbone of virtually every new SGD floating-rate mortgage in Singapore.
What SORA Is and How It Is Calculated
SORA stands for Singapore Overnight Rate Average. Each business day, MAS collects data on all eligible unsecured overnight SGD interbank transactions executed in the Singapore market between 8 am and 6:15 pm. It then computes the volume-weighted average of those borrowing rates and publishes the result — typically by 9 am the following business day. Because it draws on a broad pool of actual completed transactions rather than bank estimates or forward-looking quotes, the rate reflects genuine market conditions with far less room for manipulation.
MAS publishes three SORA variants: the daily rate (the raw overnight figure), the 1-month compounded SORA, and the 3-month compounded SORA. Mortgage products almost universally reference the 3-month compounded rate, which is the arithmetic compounding of daily SORA over the preceding 90-day period. Full methodology is published on the MAS SORA page.
Why the Benchmark Transition Happened
Singapore's legacy benchmarks — SOR (Swap Offer Rate) and SIBOR (Singapore Interbank Offered Rate) — were phased out over a multi-year programme driven by global and local reforms after the LIBOR manipulation scandals of the early 2010s. SOR was discontinued first because it relied on USD/SGD FX swap transactions and therefore contained embedded USD LIBOR exposure; it ceased to be published after June 2023. SIBOR, which was calculated from a daily poll of contributing banks rather than real transactions, was fully discontinued on 31 December 2024 (as of 2026-06, confirmed by MAS). The MAS Financial Benchmarks page documents the full discontinuation timeline and transition milestones for both benchmarks. All existing SIBOR-pegged and SOR-pegged home loans have been contractually converted to SORA-based pricing under fallback provisions agreed between the Association of Banks in Singapore (ABS) and individual banks.
Compounded SORA vs Simple SORA
Simple SORA applies the current overnight rate directly to a loan balance without compounding — this approach is straightforward but uncommon in Singapore mortgages. Compounded SORA (the market standard) compounds each day's overnight rate over a look-back period (typically 90 days for the 3-month variant) using a standardised formula endorsed by MAS and the ABS. The compounding produces a slightly higher figure than a simple average of the same daily rates, but it more accurately reflects the time-value cost of funds. Crucially, because it uses a backward-looking observation period, your rate for a given interest period is known only at the end of that period — banks apply a short lag (commonly two to five business days) so they can calculate the exact payment amount before it falls due. This is a key operational difference from old SIBOR packages, where the rate was set at the start of each period.
What Does It Mean?
The Singapore Overnight Rate Average (SORA) is the volume-weighted average rate of unsecured overnight interbank Singapore Dollar cash transactions, published by MAS. Since 2021 SORA has replaced SIBOR as the benchmark for most Singapore home loans. Floating mortgage rates are typically quoted as 3-month compounded SORA plus a bank spread of 0.75 percentage points to 1.25 percentage points.
Key Differences
| Aspect | SORA (current) | SIBOR (legacy) |
|---|---|---|
| Status | Active benchmark | Discontinued from 2024 |
| Underlying market | Unsecured overnight SGD interbank transactions | Bank-submitted offered rates |
| Administered by | MAS (Monetary Authority of Singapore) | ABS Benchmarks Administration |
| Usual tenor for mortgages | 3-month compounded SORA | 1M / 3M SIBOR |
| Rate volatility | Lower — backward-looking average | Higher — single-day quote |
| Transparency | Published daily on MAS site, based on actual trades | Submission-based, phased out after LIBOR reforms |
Worked Example
Typical pricing on a 3-month compounded SORA floating mortgage, illustrated with an indicative 3M SORA of 2.80%:
On a $1,125,000 loan over 25 years, that range translates to roughly $5,662 – $5,969 per month. A 0.5 percentage-point move in SORA changes the payment by about $307/month at this loan size.
Check the current published SORA rate on the MAS website before locking in a floating-rate home loan — the value refreshes every Singapore business day.
Where to Find This on ShiokNest
- Mortgage Calculator
- Refinancing Calculator
- Loan Comparison Calculator
Look for the tooltip icon next to this metric on ShiokNest for a quick reminder of its definition.
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This glossary article is auto-generated from ShiokNest's financial data and updated periodically. Rates and figures are current as of April 2026. Check official sources for the latest.
How Floating Mortgages Are Priced Using SORA
A typical floating-rate home loan in Singapore is now structured as: 3-Month Compounded SORA + Bank Spread. The bank spread (also called the margin) is the profit component the lender adds on top of the benchmark. As of 2026-06, spreads across major Singapore banks generally range from roughly 0.60% to 1.00% per annum, though the exact figure varies by bank, loan quantum, and promotional period. When comparing packages, the spread is effectively the controllable cost — a lower spread means a lower total rate at any given SORA level. Always verify the current spread directly with your bank, as these figures change with market conditions.
Because 3-month compounded SORA reflects an average of the preceding 90 daily overnight rates, it tends to move more smoothly than SIBOR did. Short-lived spikes in overnight liquidity get diluted over 90 data points rather than creating an immediate step-jump in your repayment. Use the mortgage calculator to model how different SORA levels affect your monthly instalment, and the refinancing calculator to compare your current package against new market offers.
Lock-In Periods and Reset Frequency
Most SORA-linked packages reset quarterly, meaning the compounded rate is recalculated every three months based on the preceding 90 days of overnight rates. Some banks offer 1-month reset packages, which track market movements more closely (beneficial when rates are falling, riskier when they are rising). Lock-in clauses — typically one to three years — prevent early full-redemption or refinancing without incurring a penalty (commonly 0.75%–1.50% of the outstanding loan). Borrowers assessing whether to switch packages should weigh the break-cost against the interest savings over the remaining lock-in period. The Association of Banks in Singapore (ABS) SORA guide explains how compounded SORA is operationally applied across different bank products.
SORA vs Fixed-Rate Packages
SORA-linked packages offer lower initial rates than fixed-rate packages when rates are at moderate levels, but they expose borrowers to rate volatility over the loan tenure. Fixed-rate packages (typically two to five years) cap upside risk but usually carry a premium over SORA-linked rates during periods of low benchmark rates. For most owner-occupiers with long holding horizons, a hybrid approach — fixing for the first two to three years, then switching to a floating package — has historically balanced cost and risk. District-level price trends visible on the industry trends map can help contextualise whether the current market environment favours locking in or staying flexible.
What Borrowers Should Do Now
- Confirm your benchmark: Log in to your bank's portal or call your relationship manager to confirm whether your loan now references 3-month compounded SORA. If you have not received a conversion notice and took out the loan before 2025, contact your bank — all SIBOR and SOR loans should have been transitioned by end-2024 (as of 2026-06).
- Understand your all-in rate: Your effective rate = 3-month compounded SORA (published by MAS) + your bank's spread. Check the MAS SORA page for the current published rate and add your contractual spread to determine your true borrowing cost.
- Model future scenarios: Use the mortgage calculator to stress-test your monthly repayment at SORA +0.5%, +1.0%, and +1.5% above the current level. Ensure your household budget can absorb a 1%–1.5% rate increase without distress.
- Compare spreads before lock-in expires: About three to six months before your lock-in ends, obtain indicative spread quotes from at least three banks. Use the refinancing calculator to compute the net saving after any break fees and legal/valuation costs.
- Watch the compounding lag: Because 3-month compounded SORA is backward-looking, your rate for a given interest period is confirmed only near the end of that period. Factor in the two-to-five business day lag when forecasting cash flow.
- Consider the Total Debt Servicing Ratio (TDSR): All new or refinanced home loans are subject to a TDSR cap of 55% of gross monthly income. Use the TDSR calculator to confirm eligibility before approaching banks.
- Keep documentation: Retain your loan conversion letter or rate-change notice. This is your legal record of the new benchmark and spread in the event of a dispute.
Frequently asked questions
What is the difference between daily SORA, 1-month compounded SORA, and 3-month compounded SORA?
Daily SORA is the raw overnight rate published each business day by MAS — it reflects the volume-weighted average of that day's eligible overnight interbank transactions. 1-month and 3-month compounded SORA are derived by compounding the daily SORA rates over the preceding 30 or 90 calendar days respectively, using a standardised formula. Singapore home loans almost always reference 3-month compounded SORA because the longer look-back window smooths out day-to-day volatility, making monthly repayment amounts more predictable than if each payment tracked the raw daily rate.
When exactly were SIBOR and SOR discontinued, and what happened to existing loans?
SOR (Swap Offer Rate) was fully discontinued after June 2023, as it relied on USD LIBOR inputs that themselves ceased after June 2023. SIBOR was fully discontinued on 31 December 2024 (as of 2026-06), completing a multi-year transition programme overseen by MAS and the ABS. All outstanding SIBOR-pegged and SOR-pegged home loans were converted to SORA-based pricing under contractual fallback clauses — lenders were required to notify borrowers in writing and apply an adjustment spread (if any) to ensure economic equivalence at the point of conversion. If you have not received such a notice and your loan pre-dates 2025, contact your lender immediately.
Is SORA higher or lower than SIBOR was, and does the change affect my repayments?
Historically, overnight rates tend to be slightly lower than three-month tenor rates (such as 3-month SIBOR) because shorter-duration lending carries less term premium. At the point of conversion, banks applied a Credit Adjustment Spread (CAS) to SORA-based rates to ensure borrowers were not materially advantaged or disadvantaged simply by the benchmark switch. The exact impact on any individual loan depends on the CAS applied, the prevailing SORA level, and the new bank spread. In practice, most borrowers experienced only marginal changes to their repayments at conversion. Ongoing movements in SORA reflect genuine market liquidity conditions and will differ from what SIBOR would have been, but the structural driver — MAS monetary policy and interbank liquidity — remains the same.
Why is SORA considered more transparent and manipulation-resistant than SIBOR?
SIBOR was calculated from a daily submission poll: a panel of banks reported the rates at which they believed they could borrow funds. Because submissions were estimates rather than actual transaction prices, there was theoretical scope for banks to shade their submissions strategically. SORA, by contrast, is derived exclusively from real, completed, eligible overnight transactions reported to MAS — there is no estimation or forecasting involved. The volume-weighting further means that large transactions carry proportionate influence, making it difficult for any single participant to move the rate materially. This transaction-based methodology aligns Singapore with global best practice for risk-free rate benchmarks, as outlined by the Financial Stability Board's reform recommendations.
Should I choose a SORA-linked package or a fixed-rate package for my next home loan?
There is no universal answer — the optimal choice depends on your risk tolerance, loan tenor, and expectations for interest-rate direction. SORA-linked packages typically offer lower initial rates and benefit borrowers if rates remain stable or decline; fixed-rate packages provide certainty for budgeting but usually carry a premium over floating rates at moderate rate levels. A common approach for owner-occupiers is to fix for two to three years (covering the highest-uncertainty early repayment phase) and then switch to a floating SORA package once more rate visibility emerges. Use the mortgage calculator to model both scenarios side by side, and the refinancing calculator to assess the cost of switching packages at lock-in expiry.