Fixed vs Floating Mortgage in Singapore (March 2026): What Homeowners Should Know

Right now, something unusual is happening in the mortgage market.

Fixed and floating home loan rates in Singapore are almost identical.

That raises an important question many homeowners are asking:

Which option is actually better? Fixed or floating?

Let’s break it down using current market data and historical interest-rate trends.

Current Mortgage Rates (March 2026)

As of 6 March 2026, here is how the current mortgage packages compare.

Based on a $1,000,000 loan with a 30-year tenure.

As you can see, the difference is extremely small.

The floating package is only about $19/month cheaper than the fixed option.

Because the pricing is almost identical, the decision is no longer about which option is cheaper today.

The real question becomes:

Where will interest rates move next?

What Is The Market Signalling Right Now?

Over the past few months, SORA has been gradually trending downward.

This suggests that floating rates could continue falling in the near term.

However, something interesting is happening at the same time.

Some banks have started increasing their fixed mortgage rates.

Why?

Because banks typically price fixed packages based on their expectations of future funding costs and interest-rate risk.

In other words, banks may be anticipating that rates could rise again in the future.

Does That Mean Floating Is The Better Choice?

At first glance, it might seem that way.

If SORA continues falling, floating rates could become cheaper.

But to understand the real risk, we need to look at how interest rates have behaved historically.

Interest Rates Move in Cycles

Interest rates rarely stay at the same level for long.

Over the past five years, we have seen dramatic movements.

2020–2021 (COVID Period)

SORA dropped to around:

0% – 0.25%

This was one of the lowest interest-rate environments in modern history.

2023 (Rate Hike Cycle)

SORA surged to around:

3.5% – 3.76%

Mortgage payments increased significantly for homeowners on floating rates.

Today (2026)

SORA is currently around:

~1.1%

Which means we are somewhere in the middle of the cycle.

How Today’s Rates Compare to Historical Scenarios

To understand the possible outcomes, let’s look at three scenarios.

Based on a $1M loan over 30 years.

From this comparison we can see:

If rates fall back to COVID-level lows, the savings would be roughly:

~$500/month

But if rates rise back to the 2023 peak, monthly payments could increase by roughly:

~$1,400/month

The Risk Is Asymmetrical

This is an important concept.

The potential downside is almost three times larger than the upside.

• Best case savings: ~ $500/month
• Worst case increase: ~ $1,400/month

This means the risk profile is asymmetrical.

You gain a limited amount if rates fall further but you could face much larger increases if rates rise again.

When Floating Rates May Make Sense

Floating rates may still be suitable if:

✔ You believe interest rates will continue falling
✔ You are comfortable handling higher payments if rates rise
✔ You are comfortable with monthly payment fluctuations

Floating loans can work well for homeowners who are actively monitoring rates and willing to refinance when conditions change.

When Fixed Rates May Be Better

For many homeowners today, a fixed package can offer more certainty.

With fixed rates around ~1.35%, locking in can provide:

✔ predictable monthly payments
✔ protection against future rate spikes
✔ greater peace of mind

This can be especially helpful for homeowners who prioritise budget stability and financial predictability.

The Bottom Line

When fixed and floating rates are almost identical, the decision becomes less about price and more about risk management.

Floating rates may offer slightly more upside.

But fixed rates provide greater protection against uncertainty.

Not Sure Which Option Is Right For You?

Every homeowner’s situation is different.

Factors like your loan size, property type, financial buffer, and refinancing plans can all affect which option is better.

If you'd like to compare current fixed vs floating mortgage packages, you can reach out for a loan review and explore the options available.