Fixed vs Floating Home Loans in Singapore: Which Is Better?
Choosing between a fixed and floating home loan is less about finding a universally “best” rate and more about matching the package to your finances, risk tolerance and property plans. The lowest advertised first-year rate may not produce the lowest total cost once the lock-in period, later-year pricing, fees and repayment flexibility are included.
What is a fixed-rate home loan?
A fixed-rate package keeps the stated rate unchanged for a defined period. This can make budgeting easier because the rate does not change during that period. The loan may become variable afterwards, so check the facility letter for later pricing, lock-in conditions, early-redemption charges and partial-repayment rules.
What is a floating-rate home loan?
A floating-rate package changes according to a stated benchmark and spread. Many Singapore packages use SORA, which MAS defines as the volume-weighted average rate of unsecured overnight SGD borrowing transactions in the interbank cash market. Check the benchmark, bank spread, reset frequency and whether the spread changes in later years.
Fixed versus floating: key differences
| Consideration | Fixed rate | Floating rate |
|---|---|---|
| Repayment certainty | Higher during the fixed period | Costs may change |
| Falling-rate benefit | Limited during fixed period | May benefit as benchmark falls |
| Rising-rate exposure | Lower during fixed period | Higher |
| Lock-in | Common | May also apply |
Worked repayment illustration
For a S$500,000 loan over 25 years, an illustrative rate of 1.30% produces an estimated monthly instalment of about S$1,953. At 1.60%, it is about S$2,023—a difference of approximately S$70 a month. This assumes a standard principal-and-interest schedule and unchanged rates, and excludes fees and insurance.
Questions to ask before deciding
- How long will you keep the loan or property?
- Can your budget absorb a rate increase?
- What lock-in and early-redemption charges apply?
- What happens after the promotional period?
- Can you make partial repayments without penalty?
Frequently asked questions
Is a fixed home loan always safer?
It provides rate certainty during the fixed period, but can still involve lock-ins, charges and variable pricing later.
Is SORA controlled by my bank?
No. SORA is a benchmark published by MAS. The bank determines the package structure and spread.
Can I change packages later?
Repricing or refinancing may be possible, subject to the existing loan conditions, fees and the new lender’s assessment.
Compare our new-property home-loan options or review home-loan refinancing.
Source and review: MAS SORA benchmark. Reviewed by the Loan$upermart Mortgage Advisory Team on 8 September 2026.
General information only. Rates, eligibility and terms are subject to change and lender assessment.
