Singapore’s Best Mortgage Rates Are Back — But The Cheapest Home Loan Isn’t Always The Best One: Here’s Which To Pick

This contributed article is written by Clive Chng, associate director at Redbrick Mortgage Advisory.

If your home loan was priced during the 2023 to 2024 rate spike, you’re likely paying more than what’s available today. Interest rates have fallen sharply since, and for anyone who hasn’t reviewed their loan in two or three years, that gap could mean thousands of dollars in unnecessary interest every year.

For Singaporean homeowners, this year is shaping up to be one of the most active refinancing windows in recent years. Here’s where rates stand, and the packages worth considering if you’re an HDB or condo owner looking to refinance.

Where Interest Rates Stand Right Now

The three-month compounded Singapore Overnight Rate Average (SORA), which most floating rate packages are pegged to, peaked at around 4% in 2023 and 2024 alongside the US Fed’s hiking cycle.

But it has since bottomed out to around 1.00% in the second quarter of 2026 and ticked back up slightly to its current rate of 1.14%. Bank economists expect a further gradual climb toward 1.3% to 1.4% by year-end, as the Fed’s easing cycle winds down to just one or two more interest rate cuts.

Interest rates in Singapore are still relatively low by recent standards, but they’re creeping up rather than falling further. Several banks have already started nudging their fixed rates higher over the past few months, even as shorter fixed packages and floating rates remain comparatively cheap for now, a sign that the best pricing of this cycle may already be behind us.

The range of packages bundled with real flexibility, free conversion, generous prepayment allowances, and waivers of the sale penalty is thinning out too, as banks grow more selective about which rate types come with these features.

For anyone whose lock-in period ends in 2026 or 2027, refinancing now could still mean savings of up to 2 percentage points versus rates from the peak, though that window may not stay open indefinitely.

Best Refinancing Packages For HDB Owners (Loan Size Around $800,000)

For an HDB owner with an outstanding loan of about $800,000 looking to refinance, these are three packages worth shortlisting.

1. Floating rate: 3M SORA + 0.28% / 0.28% / 0.65% / 0.75%

The spread rises from year 1 to year 2, then to year 3, and settles at 0.75% from year 4 onward. It comes with free conversion at any time, the ability to partially prepay up to 50% of the loan (the penalties charged is usually 1.50% on the amount prepaid within the lock in period), and a waiver of the usual 1.50% on the entire loan amount due to the sale of the property within the lock in period, worth around $12,000 on this loan size.

Why it might make sense now: There’s genuine disagreement about where SORA goes from here. Some borrowers believe it could stay low or even ease further if economic growth softens, while banks are officially forecasting a gradual climb toward 1.3% to 1.4%.

A floating package lets you lean into the first view and keep benefiting from today’s lower rate if it plays out, while the free conversion clause is the hedge on the second view, letting you jump to a fixed package within the bank at no cost the moment the trend looks less favourable, rather than being stuck riding a rate that keeps climbing.

2. Three-year fixed rate at 1.65%

Comes with the same 50% prepayment allowance and sale penalty waiver as the floating package above.

Why it might make sense now: This suits borrowers who think the low point is behind us and that rates are on a genuine multi-year upward path, instead of a temporary blip, a view reinforced by banks already nudging 3-year fixed pricing higher due to higher hedging costs. Locking in at 1.65% now avoids paying more for the same tenure later, while three years is short enough that you’re not overcommitting if the outlook turns out more benign than expected.

3. Five-year fixed rate at 1.98%

Carries the same prepayment and sale waiver protections as the packages mentioned above.

Why it might make sense now: This is best suited to owners who’d rather not revisit this decision for years (at least for the entire Minimum Occupation Period) and are comfortable paying a bit more today for certainty.

It insulates you fully from further increases through 2027 and beyond, and locks in today’s flexible terms, free conversion, prepayment, and the sale waiver, before they potentially become harder to find as banks tighten conditions. Five-year fixed interest rates are not a common interest rate offering in the market, and their appearance depends largely on the economic conditions.

Best Refinancing Packages For Condo Owners (Loan Size Around $1.5 million)

For condo owners refinancing a loan of around $1.5 million, the shortlist looks a little different, given the larger loan quantum and the type of borrower profile involved.

1. Two-year fixed rate at 1.40%

This is the lowest headline rate among the three options we’ve laid out here. It comes with free conversion after the first year, and an interest offset account that lets cash parked against the loan reduce the interest you’re charged.

Why it might make sense now: This is the package for owners who aren’t confident enough about the multi-year outlook to commit to one view, and prioritise flexibility and the ability to adapt to changing market conditions without risking much. It locks in today’s low pricing for roughly as long as this gentle uptrend is expected to play out, then lets you reassess with more clarity in hand.

The free conversion after year 1 is a partial hedge too, so if rates move against you sooner than expected, you’re not stuck waiting out the full two years. The interest offset account allows you to utilise your liquid cash to get a better effective interest rate, whilst being able to deploy it at the opportune time.

2. Three-year fixed rate at 1.60%

A longer lock-in at a modest premium over the 2-year package.

Why it might make sense now: This suits borrowers who believe that the direction of interest rates will go up rather than down, a view backed by banks that have already started to reprice their 3-year fixed rates higher across the board. Locking this in now would secure pricing that’s becoming harder to find, and three years is long enough to avoid the cost and hassle of refinancing again too soon, without wagering on where rates sit five years out.

3. Floating rate: 3M SORA + 0.25% / 0.25% / 0.50% / 0.75%

This is a similar structure to the HDB floating package, with the spread widening progressively from year 1 to year 4 onward. It comes with free conversion at any time, prepayment of up to 50% of the loan (up to $750,000 on this size), and a waiver of the usual 1.50% sale penalty, worth roughly $22,500 here.

Why it might make sense now: For borrowers who think the SORA could stay lower for longer than banks are forecasting, this keeps you exposed to today’s rate and any further easing, while free conversion, prepayment, and the sale waiver – features that are becoming less common elsewhere – all remain intact.

If the increase in the interest rate turns out faster than expected, converting to a fixed package within the bank costs nothing, so the downside is capped without giving up the upside.

What Else To Consider Beyond The Headline Rate

With prevailing interest rates this close to a cyclical low, it’s tempting to just chase the lowest number on the page. But as the breakdowns above show, the fine print often matters more than a difference of a few basis points. Chasing the lowest interest rates without reviewing your mortgage portfolio and property goals is like picking tailored clothing based on price alone and skipping the fitting. It looks fine on the rack, but you’re the one who has to wear it for the next few years.

The lock-in period matters as much as the rate itself. A 2-year fixed package might carry a lower rate than a 5-year one, but it also means you’ll be back in the market for a new package sooner, potentially into a higher rate environment if SORA does drift up toward 1.4% by year-end as banks expect.

How likely you are to sell, upgrade, or consider partial payments during the lock-in period should weigh heavily on your choice. If there’s any real chance of either, the waiver of penalty due to sale and the ability to prepay without cost are worth more than they look on paper, since the penalties they remove scale directly with your loan size.

Conversion flexibility is what lets you adapt if the rate environment doesn’t move the way banks currently expect. A package with free conversion, whether from day one or after the first year, gives you a way out within the same bank if a better package comes along.

Rates this low don’t come around often, and the packages that make sense for an HDB owner with an $800,000 loan looking to hold for the next decade can look very different from what suits a condo owner with a $1.5 million loan who might upgrade in three years.

The right package depends on how long you intend to hold the loan, how much flexibility you need, and how much certainty you’re willing to pay for. Whether the goal is holding a home long term, upgrading in a few years, or unlocking equity along the way, that context shapes which package actually makes sense, not just which one carries the lowest number today.

Redbrick is the largest independent mortgage advisory firm in Singapore, and provides unbiased advice from loan selection to the full application process. Redbrick sources financing across a wide network of banks and financial institutions in Singapore for both residential and commercial properties.