Need payment certainty
Useful for households that want predictable monthly instalments.
Decision guide
SORA vs Fixed Home Loan Singapore
How to choose between payment stability and lower floating-rate risk in Singapore mortgages.
Last updated: March 2026
Quick Answer
Fixed-rate loans offer payment stability for a defined period.
SORA packages usually start lower, but repayments can move when interest rates change.
The better choice depends on:
- risk tolerance
- cashflow stability
- how long you expect to keep the loan
- whether you plan to refinance later
Quick Comparison
| Feature | SORA | Fixed Rate |
|---|---|---|
| Rate behaviour | Moves with market | Locked for fixed period |
| Payment stability | Can change | Stable during lock-in |
| Best when | Rates are easing or you accept movement | Rates feel uncertain and stability matters |
What Is A Fixed-Rate Home Loan
A fixed-rate home loan keeps the interest rate unchanged for a fixed promotional period.
Typical fixed periods:
- 2 years
- 3 years
After that, the package usually switches to another rate structure.
What Is A SORA Home Loan
A SORA package is a floating-rate home loan linked to the Singapore Overnight Rate Average benchmark.
Repayments can rise or fall depending on:
- market interest rates
- the bank's spread
- package structure
When Fixed Rate Usually Makes Sense
Tight monthly budget
Helps borrowers avoid repayment surprises.
Rates feel uncertain
Useful when borrowers want protection from near-term volatility.
Short to medium holding horizon
Some borrowers value rate certainty for the first few years only.
When SORA Usually Makes Sense
Comfortable with rate movement
Suitable for borrowers who can absorb repayment changes.
Want lower starting rates
Floating packages often begin below fixed-rate packages.
Expect to refinance later
Useful for borrowers who plan to review options again.
Longer time horizon
Some borrowers accept fluctuation in exchange for lower cost potential.
Simple Payment Example
Loan amount
S$700,000
Fixed rate
1.80%
SORA package
1.45%
The SORA package may start lower, but monthly instalments can change later if benchmark rates rise.
The fixed package may cost more upfront, but gives stronger repayment certainty.
What Borrowers Often Miss
- looking only at the first-year rate
- ignoring what happens after the fixed period ends
- not checking the bank spread over SORA
- choosing fixed without asking how long stability is needed
- choosing SORA without testing higher repayment scenarios
Decision Checklist
Ask yourself:
- Do I need stable monthly repayments?
- Can I handle rate increases if SORA rises?
- How long do I expect to keep this loan?
- Am I likely to refinance in 2 to 3 years?
- Is budget certainty more important than the lowest starting rate?
Where This Fits In Your Mortgage Journey
Free Consultation
Need help deciding between fixed and SORA?
We can compare package structure, repayment risk, and likely refinancing timing before you commit.
FAQ
What is the difference between fixed and SORA home loans?
Fixed-rate loans lock your rate for a period, while SORA packages move with market rates.
Is fixed or SORA cheaper?
SORA often starts lower, but fixed provides stronger payment certainty.
Who should choose fixed rates?
Borrowers who value repayment stability and lower near-term uncertainty.
Who should choose SORA?
Borrowers who can tolerate rate movement and want lower starting rates.