Should I choose a fixed or floating rate bank loan?
Choose a fixed rate if you want payment certainty and expect interest rates to rise, or a floating rate if you're comfortable with variability and believe SORA will stay low or fall. Fixed rates currently offer stability at a slightly higher cost, while floating rates are cheaper today but can increase over time.
Last updated: 22 Apr 2026
The choice between fixed and floating depends on your view of interest rates and your tolerance for payment variability.
Fixed rate (currently ~1.30%-1.88%):
- Monthly repayment stays the same for the lock-in period (2-3 years)
- Offers certainty and ease of budgeting
- Slightly higher than floating today, but protects you if SORA rises
- Best choice when rates are near a floor and likely to increase
Floating rate (currently ~1M SORA + 0.00% to 0.25% ≈ 1.03%-1.38%):
- Repayment moves with SORA monthly or quarterly
- Slightly cheaper today, but could increase
- Better suited to borrowers who monitor rates actively
- Makes sense if you believe SORA will fall further