As we enter September 2026, Singapore home loan rates are beginning to move higher again.

 

Earlier this year, Fairloan Mortgage Advisory highlighted that mortgage rates were unlikely to continue falling indefinitely and that we could see some upward movement towards the second half of 2026.

 

We are now starting to see this happen.

Several local-bank fixed-rate packages have been revised upwards, while both the 1-month and 3-month compounded SORA benchmarks have been climbing from their earlier lows.

 

For homeowners who have been waiting for mortgage rates to fall even further, this is an important development.

SORA Has Started Moving Higher Again

At the end of August 2026, the 1-month compounded SORA was approximately 1.25%, while the 3-month compounded SORA was around 1.18%. Recent published data showed figures of approximately 1.2543% for 1M SORA and 1.1805% for 3M SORA.

 

More importantly, the underlying daily SORA readings have also been moving higher during the second half of August.

 

This matters because compounded SORA is essentially a backward-looking average. If daily SORA remains elevated, the 1-month and eventually the 3-month compounded benchmarks will gradually reflect those higher readings as well.

 

For example, assuming a floating mortgage package with a spread of around 0.30%:

• 1M SORA of 1.25% + 0.30% spread = approximately 1.55%
• 3M SORA of 1.18% + 0.30% spread = approximately 1.48%

 

This already puts many floating packages close to the mid-1% range.

If daily SORA continues trending upwards, floating mortgage rates could gradually rise further over the coming months.

Local Banks Have Also Increased Some Fixed Rates

The movement is not limited to floating packages.

 

We have also observed local banks adjusting some of their fixed-rate offerings upwards.

 

For example, DBS states that its 3-year fixed HDB package changed for offers accepted from 1 September 2026, compared with the prevailing 1.70% rate for offers accepted by 31 August.

 

This is consistent with what Fairloan had expected earlier this year.

Mortgage rates fell very quickly from their 2023–2024 highs, but once rates reached the low-to-mid 1% range, there was increasingly limited room for further sharp declines.

 

The market therefore appears to be entering a different phase, not a return to extremely high mortgage rates, but a period where rates may fluctuate within a relatively narrow range.

 

What Will the US Federal Reserve Do Next?

The next Federal Open Market Committee (FOMC) meeting will take place on 15–16 September 2026.

 

The Federal Reserve currently maintains its federal funds target range at 3.50%–3.75%.

 

At Fairloan, our base case is that the US Fed may choose to keep rates unchanged at the upcoming meeting while continuing to monitor inflation.

 

However, the possibility of another rate increase should not be ruled out.

 

Inflation remains above the Fed’s 2% objective, and recent Fed minutes showed that several policymakers had already favoured a 25-basis-point increase at the July meeting.

 

Recent US inflation data has also increased market expectations of further tightening. As of late August, markets had increased the probability of a September hike, while expectations had strengthened that at least one 25-basis-point increase could occur before the end of 2026.

 

Therefore, if inflation remains persistent towards the end of the year, we cannot rule out the Fed moving the target range up by 25 basis points to approximately 3.75%–4.00%.

 

Interestingly, this would also be broadly consistent with the Fed’s June 2026 projections. The median projection for the federal funds rate at the end of 2026 was 3.8%.

 

Does This Mean Singapore Mortgage Rates Will Rise Sharply?

Not necessarily.

 

This is where homeowners should look at the bigger picture.

 

Despite some near-term upward pressure, Fairloan’s view remains that Singapore home loan rates are likely to remain below 2% for the foreseeable future, barring another major inflation or geopolitical shock.

 

The extremely low mortgage rates of 1% or below seen during the COVID period were unusual.

 

Similarly, mortgage rates of 3% to 4% experienced during the aggressive global rate-hike cycle were also unlikely to represent the long-term normal.

 

Instead, we believe Singapore mortgage rates may settle somewhere between these two extremes.

 

Fairloan Mortgage Rate Forecast for 2027 and 2028

Based on the information currently available, our working forecast is:

Period	Fairloan Estimated Competitive Home Loan Range*
Remaining 2026	Around 1.5%–1.8%
2027	Around 1.45%–1.60%
2028	Around 1.45%–1.60%
From around 2028/2029, if inflation improves	Potentially around 1.30%–1.50%

*Indicative estimates for competitive mortgage packages, particularly for larger loan amounts such as approximately S$1 million. Actual rates depend on loan size, property type, bank pricing and market conditions.

 

We therefore remain relatively comfortable with the longer-term mortgage outlook.

 

Even if rates increase slightly during the remainder of 2026, we do not currently expect a return to the 3%–4% mortgage environment experienced previously.

 

Why Could Rates Fall Again From 2028?

A major factor will continue to be the direction of US inflation.

 

The Federal Reserve’s June projections showed policymakers expecting inflation to gradually moderate over the coming years, although the projected policy-rate path remains higher than previously expected.

 

The median projected federal funds rate was:

2026: 3.8%
2027: 3.6%
2028: 3.4%

 

The longer-run median projection was around 3.1%.

 

This does not mean Singapore mortgage rates will move directly in the same proportion as US rates.

 

Singapore’s SORA is influenced by domestic SGD liquidity, monetary conditions and global rates, among other factors.

 

Nevertheless, if US inflation eventually moves convincingly back towards the Fed’s target and global monetary conditions ease, it should create a more favourable environment for Singapore borrowing costs as well.

 

Under such a scenario, we believe competitive Singapore mortgage rates in the 1.30%–1.50% range could become possible again from around 2028 onwards, potentially remaining around those levels for several years.

 

This remains a forecast rather than a guarantee, and we will update our outlook as economic conditions change.

 

Should You Choose Fixed or Floating Rates Now?

This has become a more interesting question than it was several months ago.

 

When floating rates were considerably cheaper than fixed rates, borrowers willing to accept some volatility had a strong reason to consider SORA packages.

 

Today, that difference has narrowed.

 

With 3M SORA around 1.18%, even a relatively competitive SORA + 0.30% package already works out to approximately 1.48%.

 

If SORA continues rising, that effective rate will increase.

 

At the same time, fixed rates provide borrowers with certainty over their monthly instalments.

 

However, this does not mean everyone should automatically choose a fixed package.

 

Your decision should depend on your circumstances, expected holding period, lock-in period and future plans.

 

The Lowest Mortgage Rate Is Not Always the Best Mortgage Package

One of the most important things we tell our clients at Fairloan is:

The lowest advertised interest rate does not necessarily mean it is the best home loan for you.

 

Two borrowers with exactly the same loan amount may be better suited to completely different banks.

 

For example, one homeowner may intend to sell the property within the next two years and therefore require a package with a waiver of penalty upon sale.

 

Another may prioritise interest-rate certainty and prefer a longer fixed-rate period.

 

For some borrowers, income eligibility can also differ substantially from one bank to another — particularly for self-employed applicants, commission earners, business owners or borrowers with variable income.

 

Other considerations can include:

• fixed versus floating rates;
• length of lock-in period;
• waiver of penalty upon sale;
• partial repayment flexibility;
• refinancing subsidies;
• legal-fee clawbacks;
• minimum loan amount;
• cash-rebate conditions;
• repricing options; and
• each bank’s individual income-assessment criteria.

 

This is why simply applying to the bank offering the lowest headline rate may not always result in the best outcome.

 

Fairloan Will Continue Monitoring Mortgage Rates

The Singapore mortgage market has changed significantly over the past few years.

 

We moved from exceptionally low rates, to one of the fastest global interest-rate increases in decades, and subsequently back towards the mid-1% mortgage environment we are seeing today.

 

As we enter the final few months of 2026, there could still be some volatility.

 

Our current view is that mortgage rates may edge slightly higher in the near term, before eventually stabilising. The more comforting long-term picture is that, based on current economic conditions, we continue to expect sub-2% Singapore home loan rates to remain achievable over the next few years.

 

Fairloan Mortgage Advisory will continue monitoring SORA, Singapore bank mortgage packages, US inflation and Federal Reserve policy and update our outlook whenever there are meaningful changes.

 

Most importantly, our role is not simply to find the lowest number on a rate sheet. We assess the borrower’s loan amount, income profile, property plans and refinancing requirements before recommending the bank and home loan package that best suits the client’s actual needs.

 

Because the lowest rate does not always mean the best rate.

 

Do check out the latest home loan rate offered in September 2026 here.