MAS tightened in April: what that means for your mortgage decision now

MAS tightened monetary policy in April 2026 for the first time in roughly three years, and raised its inflation forecast for the year. For borrowers weighing a refinancing decision, the macro signal has shifted: this is not a stable, hold-steady environment. It is one where the central bank is actively leaning against rising imported inflation.

What the data actually says

Singapore's Q1 2026 GDP growth was revised to 6% year-on-year, above the advance estimate of 4.6% and well above the Reuters consensus of 5.1%. The revision was published on 25 May 2026, after MAS had already made its April policy decision on the basis of the 4.6% advance figure. The Ministry of Trade and Industry held its full-year growth forecast at 2–4%, noting that the strong start offsets a weaker outlook for the months ahead, partly due to risks from the Iran conflict and energy supply disruptions.

Core inflation (which strips out private transport and accommodation costs) eased to 1.4% in April 2026, down from 1.7% in March. That is not a fresh low: January came in at 1.0%, February at 1.4%, March at 1.7%, and April at 1.4%. The April reading is a partial reversal of the March spike, not a new downtrend. MAS itself expects core inflation to rise toward 2.5% year-on-year for some time before easing toward its historical average in the later part of 2027.

At its 14 April 2026 Monetary Policy Statement, MAS raised its 2026 inflation forecast from the January range of 1–2% to 1.5–2.5% for both core and headline. The driver is imported energy costs from Middle East supply disruptions.

How MAS actually operates

MAS does not set a domestic policy interest rate. It manages the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) against a trade-weighted basket of currencies within a policy band. This framework has three levers: the slope of appreciation (how fast the S$ is allowed to rise), the width of the band (the tolerance range around the central path), and the centre (the level at which the band is set). MAS intervenes in the foreign exchange market, primarily in the S$/US$ spot market, to keep the S$NEER inside that band.

When MAS steepens the slope, it allows the Singapore dollar to appreciate faster, which dampens the cost of imports. When it eases the slope, it provides more room for export competitiveness and growth. Domestic interest rates, including SORA, are shaped by this exchange rate policy and by broader global rate conditions, not by a local policy rate.

At the April 2026 review, MAS increased slightly the rate of appreciation of the S$NEER policy band. The width and centre were unchanged. This was a tightening move, and the first such move in approximately three years.

How this connects to your mortgage rate

Singapore mortgage rates are benchmarked primarily to SORA (Singapore Overnight Rate Average), the volume-weighted average of unsecured overnight interbank SGD borrowing rates. When MAS tightens by steepening the slope of appreciation, it does not move SORA directly. SORA primarily tracks global rates, especially the US Fed Funds rate. What changes is the broader picture: MAS's April decision confirms that imported inflation pressures are material enough to warrant a hawkish stance, the official inflation forecast has been raised, and global rate conditions could tighten further if energy disruptions persist. Together, these factors weight the risk to SORA asymmetrically toward the upside over the next 12 months.

As of late May 2026, three-month compounded SORA has remained range-bound, but the policy backdrop has shifted. The gap between fixed and floating packages has narrowed over the past year. In the current environment, that narrowing makes fixed rates more attractive than the headline spread alone might suggest.

Fixed or floating: what the current environment suggests

This is not a universal answer. It depends on your loan size, remaining tenure, and risk tolerance. But the macro context now tilts the trade-off more clearly toward fixed than it did six months ago.

The case for fixed: MAS tightened in April and raised its inflation forecast. Core inflation is expected to climb toward 2.5% on imported energy costs. A fixed rate (1Y, 2Y, or 3Y) insulates you from the scenario where SORA moves higher as those pressures feed through. The cost is a slightly higher rate today in exchange for certainty over the fixed period.

The case for floating: If you have meaningful financial buffer and believe energy disruptions will be short-lived, floating still captures a lower rate today. You also retain flexibility if conditions ease faster than MAS expects. The risk is that you are exposed if the inflation forecast proves accurate.

The honest framing: if you are refinancing a large loan and your budget is tight, the fixed-rate premium is more justified now than it was when MAS was on hold. If you have buffer and a shorter remaining tenure, floating remains a reasonable choice, but the downside scenario is more concrete than it was at the start of 2026.

The refinancing window

Refinancing decisions are rarely about timing the market perfectly. They are about acting when the conditions are clear enough to make a sound decision. The current conditions are clear, but they are not benign: MAS has tightened, inflation is forecast to rise, and the forward risks are weighted to the upside on rates.

Borrowers whose lock-in periods expire in the next three to six months should treat this as an active decision point. The April CPI easing is a single-month partial reversal inside an uptrend that MAS is actively pushing against. It is not a signal to wait for further cooling.

What to check before you act

Before comparing packages, confirm three things:

• Your lock-in expiry date. Refinancing before your lock-in ends typically triggers a penalty of 0.75–1.5% of the outstanding loan amount. Factor this into any rate comparison.
• Your Total Debt Servicing Ratio (TDSR). TDSR caps total monthly debt obligations at 55% of gross monthly income. If your income or other debts have changed since your original loan, your refinancing options may differ from what you expect.
• The spread, not just the headline rate. Floating-rate packages are quoted as SORA plus a bank spread. Two packages with the same SORA base can differ meaningfully on the spread, and that spread is what the bank controls.

The macro environment has shifted. The decision still comes down to your numbers, but the policy backdrop now makes a stronger case for locking in certainty.