Fixed vs Floating Home Loans Singapore: Rate Resets and Lock-ins

A fixed bank mortgage rate provides certainty for its specified period. A floating package changes with its contractual benchmark and spread. Neither label tells you whether the loan is cheaper, more flexible or penalty-free.

Read the whole rate schedule

Write down the initial rate, how long it applies, the rate or formula thereafter, the reset frequency and all fees. A SORA-linked quote includes the benchmark and lender spread; the advertised spread alone is not the payable mortgage rate. Different averaging and reset conventions can affect when changes reach your payment. MoneySense: home loans, repricing and refinancing.

Fixed rates are not necessarily more expensive than floating rates at the time you apply. Use current comparable written offers, rather than assuming a “certainty premium”. At the end of a fixed period, check the contractual follow-on rate instead of assuming another fixed offer will be available.

Rate period and lock-in are separate checks

Both fixed and floating packages can impose lock-ins, subsidy clawbacks and prepayment restrictions. The fixed-rate period, lock-in period and subsidy-clawback period may differ. A floating package can be restrictive; a fixed package can contain a sale waiver or partial repayment allowance. Only the actual contract establishes this.

A payment stress test

For S$600,000 over 25 years, 3.5% gives S$3,003.74 monthly; 4.5% gives S$3,334.99. The S$331.25 increase is about S$3,975 over twelve payments. These are constant-rate scenarios, not rate forecasts. For an existing loan, use the balance and term remaining when the reset occurs.

Test the mortgage payment alongside income disruption and other fixed expenses. Regulatory assessment rates are lending checks, not a promise that future rates cannot rise further. A fixed period can postpone a reset risk without removing it from a long-term budget.

Which terms matter in your situation?

• Limited room for payment increases: initial certainty may be useful, but you must still fund the payments and a later reset.
• Large cash reserve: you may be able to tolerate floating-rate variation, after checking contractual restrictions.
• Possible sale or prepayment: quantify the exit cost of each offer before accepting either rate.

Compare before deciding

Use repayment scenarios for cashflow, lock-in terms for flexibility, and refinance versus reprice if changing an existing package. Treat a future refinance as an option subject to approval, rather than the only way the plan remains affordable.

Last updated: 14 Sep 2026 · Editorial Policy · Advertising Disclosure · Corrections