Fixed rate packages
Interest rate remains stable for a fixed period.
Decision framework guide
How To Compare Home Loan Rates In Singapore
A practical framework for evaluating mortgage packages beyond headline interest rates.
Last updated: March 2026
Quick Answer
The lowest advertised mortgage rate is not always the cheapest loan.
A proper comparison should consider:
- interest structure
- lock-in period
- repricing flexibility
- early redemption penalties
- loan tenure
- how long you expect to keep the property
This guide explains how experienced borrowers evaluate mortgage packages.
Step 1 - Understand The Interest Structure
Mortgage rates in Singapore are usually structured in two main ways.
Floating rate packages
Rates move based on market benchmarks such as SORA.
Borrowers should understand:
- how long the promotional rate lasts
- what happens after the promotional period
- whether the package converts to a floating structure later
For a deeper rate-type explanation, read SORA vs fixed home loan Singapore.
Step 2 - Look Beyond The First-Year Rate
Warning: Many borrowers compare only the first-year rate.
But mortgage packages often include:
- teaser rates
- step-up rates
- reversion spreads after promotional periods
The long-term cost of the loan can differ significantly depending on the full rate structure.
Step 3 - Check Lock-In Period Carefully
| Lock-in feature | Why it matters |
|---|---|
| Lock-in duration | Determines how long you must stay with the bank |
| Early redemption penalty | Applies if you refinance or sell early |
| Clawback clauses | Some subsidies must be repaid |
Lock-in terms affect flexibility if rates fall or if you plan to refinance later.
Step 4 - Consider Your Likely Holding Period
Mortgage comparison should reflect how long you expect to keep the loan.
If you plan to refinance within 3 to 4 years, the early promotional structure may matter more.
If you plan to hold the property long term, the reversion rate structure becomes more important.
Step 5 - Understand Repricing vs Refinancing
Repricing
Switching to another package within the same bank.
Refinancing
Moving the loan to a different bank.
Both options affect long-term cost.
Read more in repricing vs refinancing Singapore.
Step 6 - Loan Size Matters
Small rate differences can have very different financial impact depending on loan size.
Example:
Loan amount: S$800,000
Rate difference: 0.5%
Annual interest difference:
S$800,000 x 0.5% = S$4,000 per year
Loan amount: S$800,000
Rate difference: 0.5%
Annual interest difference:
S$800,000 x 0.5% = S$4,000 per year
This is why experienced borrowers compare full package structure rather than just headline rate.
Common Comparison Mistakes
- comparing only the first-year interest rate
- ignoring reversion rates
- forgetting lock-in penalties
- assuming all banks structure packages similarly
- choosing a package that does not match the expected holding period
How Borrowers Usually Compare Mortgage Packages
Step 1
Check market context on the rates page.
Step 2
Shortlist banks that fit your profile.
Step 3
Compare package structure using this framework.
Step 4
Choose based on long-term cost and flexibility.
Free Consultation
Need help comparing mortgage packages?
We can help review loan structures and explain the practical differences between bank offers.
FAQ
What is the most important factor when comparing home loans?
Interest rate matters, but borrowers should also compare lock-in terms, repricing options, and the long-term rate structure.
Should I choose fixed or floating mortgage rates?
It depends on your risk preference and market expectations.
How do I know which mortgage package is cheaper?
The cheapest package depends on how long you expect to keep the loan and how the full interest structure behaves.
Why do banks advertise different rates?
Because mortgage packages often include promotional periods, step-up rates, and different structures.