Buying a home in Singapore is a major financial commitment, and the mortgage interest rate you choose can have a significant impact on your monthly repayments and the total cost of your property. Whether you are purchasing an HDB flat, a private property or refinancing an existing home loan, it is important to understand how different mortgage rates work.
Here’s a simple guide to Singapore mortgage interest rates, HDB loans, bank loans and the key factors to consider in 2026.
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What Are the Main Types of Mortgage Interest Rates?
Singapore home loans generally come with fixed or floating interest rates.
Fixed Interest Rates
A fixed-rate mortgage keeps your interest rate unchanged for a specific period, commonly two to five years. This gives borrowers greater certainty because monthly repayments are less affected by market movements during the fixed-rate period.
The trade-off is that fixed rates may initially be higher than some floating-rate packages. Once the fixed period ends, the loan may move to a floating rate unless you refinance or reprice.
Floating Interest Rates
Floating rates can change depending on market conditions and the benchmark used by the bank.
In Singapore, SORA (Singapore Overnight Rate Average) is now the key benchmark for many floating-rate loans. SORA is calculated from actual overnight borrowing transactions in the Singapore dollar interbank market and is published by MAS. Monetary Authority of Singapore
SIBOR, which was previously widely used, has been discontinued after December 31, 2024 as Singapore moved toward a SORA-centred interest-rate system. Monetary Authority of Singapore
How Do Interest Rate Changes Affect Your Mortgage?
Even a relatively small change in your interest rate can affect your monthly payment.
For example, if you have a $500,000 mortgage over 25 years, an increase of 0.5 percentage points can add a noticeable amount to your monthly repayment and increase the total interest paid over the life of the loan.
This is why borrowers choosing floating rates should have enough financial buffer to handle possible increases in repayments.
HDB Loan vs Bank Loan
One of the biggest decisions for HDB buyers is whether to take an HDB housing loan or a bank mortgage.
The HDB concessionary housing loan rate is pegged at 0.10 percentage points above the CPF Ordinary Account interest rate. For October to December 2026, the HDB concessionary rate is 2.60% per annum. HDB
Bank mortgage rates vary between financial institutions and can change according to market conditions. HDB
Bank loans can offer competitive fixed and floating packages, but borrowers should compare the full package rather than looking only at the headline interest rate.
Loan-to-Value Limits
Your mortgage rate isn’t the only factor that matters. The amount you can borrow is also important.
According to MAS, the current LTV limit for a borrower’s first housing loan from a financial institution is generally 75%, subject to applicable conditions. This means buyers may need to fund the remaining portion through the required down payment. Monetary Authority of Singapore
Borrowers should also consider other requirements, including the Total Debt Servicing Ratio (TDSR), which is currently capped at 55% of monthly income for new mortgages. Monetary Authority of Singapore
What Should You Check Before Choosing a Mortgage?
Don’t compare loans based only on the advertised interest rate. Look at:
- Lock-in period: Early repayment or refinancing during this period may trigger fees.
- Fixed vs floating rate: Choose according to your tolerance for repayment changes.
- Penalty charges: Check the cost of early repayment.
- Loan tenure: A longer tenure can reduce monthly payments but increase total interest.
- Refinancing options: Check whether you can switch to a cheaper package later.
- Total borrowing costs: Consider legal fees, valuation fees and other applicable charges.
Should You Refinance Your Home Loan?
Homeowners should review their mortgage periodically, particularly when the lock-in period is ending.
If another bank or the same bank offers a significantly better package, refinancing or repricing could potentially reduce your interest costs. However, borrowers should calculate all associated fees before switching.
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