Why Rates Differ by Property Type
The same bank can quote three different rates on the same day, because the loan rules and the risk differ for each kind of property.
HDB flats are the only homes that can be financed with an HDB concessionary loan at 2.6%, so the real question is whether a bank package beats it. See HDB home loan rates.
Condos and private homes carry larger loans, and new launches are financed in stages under the progressive payment scheme. See condo and private property rates.
Commercial property cannot be paid for with CPF, and banks underwrite it on separate terms from residential loans. See commercial property rates.
Fixed or Floating?
A fixed rate stays the same for a set period, usually two to five years, so your instalment does not change. When the fixed period ends, the loan moves to the floating rate written into the package.
A floating rate is a benchmark plus a margin the bank adds on top, called the spread. Most floating packages use SORA, so your instalment changes when SORA does, usually every three months.
Neither is cheaper every year. When markets expect rates to fall, banks often price fixed packages below floating ones, and the other way round when rates are expected to rise. Fixed suits you if a predictable instalment matters most. Floating suits you if you can absorb a higher instalment for a while, in return for paying less when rates fall.
Lock-in Periods and Clawbacks
Most packages have a lock-in period, typically two or three years. If you repay the loan in full during it, whether by selling or by refinancing to another bank, the bank charges a penalty, commonly 1.5% of the amount repaid. Some packages also limit how much you can repay early in part.
Many banks also pay your legal and valuation fees as a subsidy. If you leave within a set period, often three years, the bank can take that subsidy back. This is the clawback.
So the lowest rate is not always the best deal. If you might sell or refinance within three years, a package with a shorter lock-in or no clawback can cost you less overall. Once your lock-in ends, compare refinancing rates before you accept your bank's repricing offer.
What Moves Home Loan Rates
Every rate on this page is made of two parts: a benchmark and the bank's spread.
SORA (the Singapore Overnight Rate Average) is the benchmark for most floating loans. It reflects what banks pay to borrow from each other overnight, is published every business day by the Monetary Authority of Singapore, and broadly follows global interest rates, especially US ones. See today's SORA rate.
Bank spreads are set by each bank, and they change more often than most people expect. A bank keen to grow its mortgage book will narrow its spread; one that has met its target will widen it. Spreads also differ by loan size and property type, which is why the same bank can quote different rates for an HDB flat and a condo on the same day.
Fixed rates are priced from where banks expect rates to be over the fixed period, so they often move before SORA does.
