SORA Rate Tracker & Mortgage Impact Guide

The 3-month compounded SORA stood at approximately 2.95% in April 2026 (as of 2026-04), down from a peak above 3.6% in late 2024. Most bank floating-rate home loans are priced at SORA + 0.70% to 0.85%, putting all-in mortgage rates in the 3.65–3.80% range for new purchases today. SORA tracks the US Fed Funds Rate with a lag of roughly one to three months — Fed easing pushes SORA lower, but the floor may already be near. Borrowers should stress-test repayments at 4.5% and keep TDSR headroom for a potential rate rebound.

• Current benchmark: 3M compounded SORA ~2.95% (April 2026)
• Typical all-in rate: 3.65–3.80% for private condo floating packages
• Stress-test floor: use 4.5% when modelling affordability
• TDSR cap: 55% of gross monthly income — check your TDSR

Every Singapore home loan signed since August 2021 lives or dies by four letters: SORA. When the Monetary Authority of Singapore replaced SIBOR and SOR with the Singapore Overnight Rate Average as the primary floating-rate benchmark, it handed borrowers a rate that resets transparently every business day — published each morning on the MAS SORA dashboard. The practical upshot: your monthly instalment is no longer a mystery set by a single bank's funding cost. It is a live reflection of Singapore's interbank money market, which in turn mirrors global liquidity conditions. This guide demystifies every link in that chain — from overnight SORA to the compounded average your bank uses, to the spread on your letter of offer, to the dollar amount that hits your bank account on the first of the month.

What SORA is and how it is computed

SORA is the volume-weighted average rate of all actual unsecured overnight interbank SGD transactions between 8 am and 6.15 pm, published by MAS each business day. Unlike the old SIBOR — which was a forward-looking survey rate quoted by contributing banks — SORA is entirely backward-looking and transaction-based, making it harder to manipulate and more reflective of genuine liquidity costs. The MAS interest rate benchmark transition was completed by end-2024, with SIBOR fully retired.

Compounded vs daily SORA

Banks do not use a single day's SORA overnight print for your loan. They use the compounded SORA — a geometric average of daily SORA readings over a lookback period (1-month, 3-month, or 6-month). The 3-month compounded figure smooths out day-to-day volatility and is the most common reference for home loan packages. MAS publishes all three on its Domestic Interest Rates statistics page (as of 2026-04).

The Fed connection

Singapore conducts monetary policy through the exchange rate, not interest rates — MAS has no official target for SORA. Yet because the SGD money market is deeply integrated with global USD funding markets, SORA tracks the US Federal Funds Rate closely during rate-hike cycles. During rate-cut cycles the correlation loosens somewhat: domestic demand for SGD liquidity, MAS operations, and local bank funding strategies all introduce short-run divergences. Empirically, a 25 bps Fed cut typically flows into a 15–20 bps decline in 3M compounded SORA over the following one to three months.

Sources: MAS, bank advertised rates. Actual loan rates vary by bank, loan size, and LTV. (as of 2026-04)

How bank spreads amplify or cushion SORA moves

The rate your bank charges is SORA + a spread. The spread compensates the bank for credit risk, administration, and a profit margin. In a competitive market, spreads compress when banks compete for loan volume; they widen when banks want to slow lending or when funding costs rise. In early 2025, spreads peaked near SORA + 1.00% as banks managed balance-sheet constraints. By April 2026, competitive pressure has narrowed the typical offering to SORA + 0.70–0.85% for private condo loans above S$1 million — a meaningful 15–30 bps improvement that partly offsets any SORA increase.

Package structures you will encounter

Most floating packages are structured with a lock-in period of one to three years, during which prepayment attracts a penalty of 0.75–1.50% of the redeemed principal. After lock-in, packages typically become free conversion — you can reprice to a new package or refinance without penalty. Key questions to ask before signing:

• Is the spread fixed for the entire lock-in, or does it step up after year 1?
• What is the free-conversion date and the repricing fee?
• Is there a cap on the all-in rate during the lock-in?
• Does the package include a rate-cap rider (rare but available from some banks)?

SORA vs fixed rates in the current cycle (as of 2026-05)

Two-year fixed rates from major banks currently cluster at 3.25–3.50%. Against a floating SORA package at ~3.70%, fixed looks attractive on a 12-month snapshot. However, if the Fed delivers two or three further 25 bps cuts and SORA falls to 2.50% by end-2026, the fixed-rate borrower will be locked above market for the back half of the period. The mortgage calculator and the refinancing calculator can model both scenarios side-by-side against your outstanding balance.

TDSR stress-testing and the interest-rate floor

MAS prudential rules require banks to compute TDSR using a medium-term interest rate floor of 4.0% for private residential loans (or the actual contracted rate, whichever is higher). This means even if today's all-in SORA package is 3.70%, the bank's TDSR check is done at 4.0%+, giving a structural buffer against rate spikes. The MAS parliamentary reply on mortgage repayment resilience (2026) confirmed this floor remains in place. If you are near the 55% TDSR ceiling at the stress-test rate, SORA normalising back to 3.5% could push your actual repayment close to that ceiling even within an existing loan. The TDSR / MSR calculator lets you model repayment headroom at any target rate.

ABSD and cooling measures context

While SORA directly sets your carrying cost, Singapore's Additional Buyer's Stamp Duty (ABSD) sets the upfront capital hurdle. The IRAS additional property cooling measures introduced in 2023 raised ABSD rates significantly for second and subsequent purchases. Together, high ABSD and elevated SORA have kept effective demand disciplined — a deliberate policy calibration rather than a market accident.

Six steps to navigate SORA in your next mortgage decision

1. Track the 3M compounded SORA monthly. Bookmark the MAS Domestic Interest Rates page — the 3M compounded figure is updated daily. A sustained move below 2.50% is a strong signal to lock in a fixed rate before banks reprice spreads upward.
2. Get at least three written indicative quotes. Verbal offers are not binding. Request the spread, lock-in terms, free-conversion date, prepayment penalty, and any step-up clauses in writing before comparing. Use the mortgage repayment calculator to normalise all quotes to a comparable monthly instalment.
3. Run a TDSR stress-test at 4.5%. MAS uses 4.0% as a floor; use 4.5% as a personal buffer. If repayments at 4.5% breach 45% of gross monthly income, reduce the loan quantum or extend tenure before signing.
4. Understand your break-even on fixed vs floating. A fixed rate at 3.30% beats a floating package at 3.70% only if SORA stays above ~2.45% for the full fixed period. Use the refinancing calculator to compute the break-even SORA level for your loan size and tenure.
5. Review your package annually near the lock-in expiry. The cheapest refinancing window is the two months before your lock-in ends — no penalty yet applies and banks will issue DIP letters valid for 30 days. The mortgage refinancing and repricing checklist covers every step.
6. Factor in CPF OA usage. If you are using CPF Ordinary Account funds to service the loan, note that CPF accrued interest compounds at 2.5% p.a. on the amounts withdrawn. In a high-SORA environment, the total home ownership cost includes both the bank interest and the accrued CPF interest clawback at sale — model both in your ROI calculation.

[
    {
        "q": "What is the current 3-month compounded SORA rate?",
        "a": "<p>As of April 2026, the 3-month compounded SORA is approximately 2.95%. MAS updates this figure every business day on its <a href=\"https://eservices.mas.gov.sg/statistics/dir/domesticinterestrates.aspx\" rel=\"noopener\" target=\"_blank\">Domestic Interest Rates statistics page</a>. For the most current figure, check the MAS site directly — rates can shift 5–15 basis points over a few weeks during active Fed policy cycles.</p>"
    },
    {
        "q": "How much does the SORA rate affect my monthly mortgage instalment?",
        "a": "<p>A 25 bps (0.25%) change in SORA changes the monthly instalment on a S$1 million, 25-year loan by roughly S$130–150 per month. On a S$500,000 loan the impact is approximately S$65–75 per month. Because your bank charges SORA plus a spread, the actual instalment change equals the SORA move multiplied by your outstanding principal and tenure factor. Use the <a href=\"/calculator/mortgage\">mortgage repayment calculator</a> to model your specific loan.</p>"
    },
    {
        "q": "Is SORA likely to fall further in 2026?",
        "a": "<p>Market consensus as of mid-2026 is that SORA may decline modestly to the 2.60–2.80% range by end-2026 if the US Federal Reserve delivers one or two more 25 bps cuts. However, some analysts believe SORA may have already found a cyclical floor near 2.50–2.70%, particularly if US inflation proves stickier than expected. There is meaningful two-way risk — a surprise US inflation rebound could push SORA higher, not lower. Never plan on SORA continuing to fall; stress-test at higher rates.</p>"
    },
    {
        "q": "Should I take a fixed or floating (SORA) home loan package in 2026?",
        "a": "<p>Fixed rates from major banks currently sit at 3.25–3.50% for two-year tenures. Floating SORA packages are running at 3.65–3.80% all-in. Fixed wins if you value payment certainty or believe SORA will stay above 2.80% for your fixed period. Floating wins if you expect the Fed to cut aggressively and SORA to drop below 2.50%. Your break-even SORA level depends on your specific loan amount and tenure — use the <a href=\"/calculator/refinancing\">refinancing calculator</a> to compute it before committing.</p>"
    },
    {
        "q": "What is the TDSR limit and how does SORA affect it?",
        "a": "<p>The Total Debt Servicing Ratio (TDSR) cap is 55% of gross monthly income. Banks compute TDSR using a medium-term stress-test rate of 4.0% (or your actual contracted rate if higher), per MAS rules. This means a rise in SORA from 2.95% to 3.50% may not immediately breach TDSR because the stress-test was already running at 4.0% — but it narrows your headroom. Borrowers close to the 55% ceiling at the stress-test rate are most exposed to a rate-cycle reversal. Check your position with the <a href=\"/calculator/tdsr\">TDSR calculator</a>.</p>"
    },
    {
        "q": "How often should I consider refinancing my mortgage?",
        "a": "<p>Review your mortgage annually and actively at three trigger points: (1) your lock-in period ends within 60 days — the penalty-free window to switch; (2) SORA moves more than 50 bps in either direction and you have a meaningful loan balance; (3) your property valuation has risen enough that LTV improves and better rate tiers become available. The <a href=\"/guides/singapore-condo-refinancing-guide\">Singapore condo refinancing guide</a> covers the full process, including repricing vs refinancing trade-offs and legal fee recovery timelines.</p>"
    }
]