Fixed vs Floating Home Loan Rates in Singapore

Glossary 4 min read Last reviewed
For: Students of the marketFirst-time buyers
Source: IRAS, MAS, URA
TL;DR
A fixed-rate home loan locks your interest rate for a set period (commonly 1–3 years), so your monthly repayment stays constant regardless of market movements. It offers predictability and protec...
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Quick Definition
A fixed-rate home loan locks your interest rate for a set period (commonly 1–3 years), so your monthly repayment stays constant regardless of market movements.

What Does It Mean?

Fixed-Rate Home Loan

A fixed-rate home loan locks your interest rate for a set period (commonly 1–3 years), so your monthly repayment stays constant regardless of market movements. It offers predictability and protection against rising rates, usually at a small premium over the prevailing floating rate. After the fixed period ends, the loan typically reverts to a floating rate.

Floating-Rate Home Loan

A floating-rate home loan has an interest rate that moves with a benchmark — in Singapore, most are pegged to 3-month compounded SORA plus a bank spread. Repayments fall when rates drop and rise when they climb. Floating packages usually start cheaper than fixed and often have no or shorter lock-ins, but expose you to rate volatility.

Lock-In Period

A lock-in period is the span (commonly 1–3 years) during which you are penalised — usually 1.5% of the outstanding loan — for redeeming or refinancing your mortgage. Fixed-rate packages almost always have a lock-in; some floating packages do not. Aligning the end of your lock-in with your refinancing plan avoids paying the penalty.

Key Differences

AspectFixed RateFloating Rate
Rate certaintyFixed for 1–3 yearsMoves with 3M SORA
Starting rateSlightly higherUsually lower
Protects against rate hikes?Yes (during fixed period)No
Benefits if rates fall?No (until reversion)Yes
Lock-inAlmost alwaysSometimes none
Best forBudget certainty, rising-rate outlookCost savings, falling/stable-rate outlook

Neither is universally better — the right choice depends on your rate outlook and how much payment certainty you need. Many buyers split the difference or refinance when their lock-in ends.

Why It Matters

The fixed-versus-floating choice directly shapes your monthly outlay and your exposure to rate swings. Picking the wrong one for the rate cycle — or ignoring the lock-in — can cost thousands in extra interest or early-redemption penalties over a loan's life.

Where to Find This on ShiokNest

Look for the tooltip icon next to this metric on ShiokNest for a quick reminder of its definition.

Official Sources

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Frequently Asked Questions

What happens when my fixed-rate period ends?
The loan typically reverts to a floating rate pegged to SORA plus a spread. Many borrowers refinance around this point to secure a better package.
Is a lock-in the same as the fixed period?
Not always. The lock-in is when redemption penalties apply; it often matches the fixed period but can differ. Check both before committing.
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This glossary article is auto-generated from ShiokNest's financial data and updated periodically. Rates and figures are current as of July 2026. Check official sources for the latest.