Mortgage Interest Rates Singapore 2026: An Favourable Outlook
For those considering a property purchase or home loan refinance in Singapore, the forecast for mortgage interest rates in Singapore 2026 appears promising. Financial analysts predict a potentially favourable environment for borrowers.
One notable projection from Maybank Research indicates that the three-month Singapore Overnight Rate Average (SORA) could decrease to 0.7% by the close of 2026. This outlook was shared at the BCA-Redas Built Environment and Real Estate Prospects Seminar. This prediction follows a steady decline in SORA, which stood at approximately 3.07% at the end of 2024 and had fallen to 1.19% by the end of 2025.
This anticipated drop in SORA is significant because the compounded three-month SORA serves as the primary benchmark for most floating-rate home loans in Singapore. It directly influences the mortgage interest rates offered by banks by acting as the base rate to which banks add their own margins.
Property Market Dynamics and SORA
Lower SORA rates typically lead to reduced borrowing costs for consumers. This creates a more attractive market for both new home buyers and existing homeowners looking to refinance home loan Singapore. The current trend suggests that average mortgage rates among major banks in Singapore have already started to fall, moving below 2% in recent months. This adjustment reflects banks’ expectations of further interest rate cuts by the US Federal Reserve, which often influences global and local interest rate decisions.
Beyond individual borrowers, a lower interest rate environment is also good news for property developers and the broader construction sector. Reduced financing costs can stimulate development activity, supporting growth in the real estate market.
Understanding the impact of SORA on property prices Singapore
The relationship between SORA and property prices is direct. When SORA falls, the cost of borrowing for home loans decreases. This makes property ownership more affordable, potentially increasing demand and providing support for property prices in Singapore. However, other factors like supply, economic growth, and government policies also influence property prices.
Construction Sector Growth and Housing Supply
Singapore’s construction industry anticipates significant growth in the coming years. The Minister for National Development stated that construction projects worth between $47 to $53 billion are expected for 2026. Large-scale infrastructure projects, such as the Tuas Mega Port, the North-South Corridor, the Cross Island Line, and expansions of Resorts World Sentosa and Marina Bay Sands, are driving this growth. Changi Airport Terminal 5 is another major contributor.
In addition to these mega-projects, there is a steady pipeline of both public and private residential developments. The Housing Development Board (HDB) plans to launch 19,600 Build-To-Order (BTO) flats in 2026, with a total of 55,000 new BTO flats projected over 2025 to 2027. This increase in supply aims to meet housing demand, with the government indicating potential to further increase BTO launches if needed.
The increased supply of BTO flats has already shown a positive effect on application rates for first-timer families, reducing them from nearly seven times in 2020 to between 1.1 and 1.9 times in 2025. This balance in supply helps stabilise the market.
How ZaiDean Can Help With Mortgage Interest Rates Singapore 2026
The outlook for mortgage interest rates Singapore 2026 presents an opportune moment for property owners and aspiring buyers. With SORA projected to decrease, borrowing costs may become more manageable. Whether you are looking to purchase your first home, upgrade, or refinance home loan Singapore, understanding these market dynamics is crucial. As ZaiDean, I provide clear, practical analysis to help you make informed decisions about your property investments, without unnecessary hype or exaggeration.