Singapore mortgage rates have fallen significantly from the highs seen over the past few years. As we enter August 2026, homeowners are once again seeing fixed home loan packages starting from around 1.40% p.a., while floating packages remain relatively competitive.

But has the mortgage market already reached its bottom?

At Fairloan Mortgage Advisory, we believe the answer may be yes, or at least, we could already be very close to the bottom of the current rate cycle.

Rather than waiting indefinitely for rates to fall another 0.10% or 0.20%, homeowners may want to focus on securing a competitive package today while considering the overall features, flexibility and certainty offered by the loan.

What Is the Lowest Mortgage Rate in Singapore in August 2026?

Based on the mortgage packages we are currently seeing in the market, some foreign banks are offering 2-year fixed rates from around 1.40% p.a.

These banks appear to be pricing their packages aggressively as they compete for mortgage market share.

Local banks, meanwhile, are generally slightly higher, with competitive fixed-rate packages around the 1.50% p.a. range, depending on the loan quantum, property type and individual borrower profile.

This means that for borrowers who qualify for the better packages, the difference between banks can be relatively small.

For example:

Foreign bank fixed rate: from ~1.40% p.a.
Local bank fixed rate: around ~1.50% p.a.

A difference of just 0.10% may not always be enough to determine which package is actually better.

Loan features matter too.

What About SORA Floating Rates?

Floating-rate home loans remain competitive, but the outlook has become less straightforward.

After declining significantly from their previous highs, SORA-linked mortgage rates could face some upward pressure during the second half of 2026.

Our current expectation is that the effective interest rate for competitive floating packages could hover around approximately 1.40% to 1.60% p.a., depending on SORA movements and the bank’s spread.

For borrowers choosing between a fixed rate of around 1.40% to 1.50% and a floating rate within a similar range, the potential savings from taking additional interest-rate risk may therefore be relatively limited.

Fixed vs Floating: Don’t Look at Interest Rate Alone

The lowest headline rate is not necessarily the best home loan.

Homeowners should also compare features such as:

• Lock-in period
• Free conversion or repricing options
• Partial repayment flexibility
• Waiver of penalties upon sale
• Legal subsidies or cash rebates
• Clawback periods
• Whether the package provides flexibility to switch when market conditions change

This becomes particularly important when the difference between fixed and floating rates is very small.

For example, if a fixed package is 1.50% while a floating package works out to approximately 1.45%, the difference is only 0.05 percentage point.

For many homeowners, paying that small premium for a fixed rate may be worthwhile in exchange for greater certainty.

You know exactly what your interest rate will be and, assuming there are no other changes to your loan, your monthly instalment remains predictable throughout the fixed-rate period.

More Homeowners Are Moving Back to Fixed Rates

Over the past year, floating-rate packages became increasingly attractive as SORA declined.

However, we are now seeing a shift in borrower preferences.

At Fairloan Mortgage Advisory, more of our clients are beginning to consider fixed-rate packages again.

One of the main reasons is simple: certainty.

After several years of volatile interest rates, many homeowners would rather lock in an attractive rate and know exactly what they will be paying every month.

When fixed and floating rates are almost identical, there may be less incentive to take the additional uncertainty of a floating package.

The US Federal Reserve Has Paused Again

The US Federal Reserve maintained its target federal funds rate at 3.50%–3.75% at its July 2026 meeting.

This is important for Singapore borrowers because global interest-rate expectations can influence funding costs and, indirectly, Singapore interest rates.

The Federal Reserve continues to face a difficult balancing act. Inflation remains above its longer-term 2% objective, with energy prices and supply shocks adding to inflationary pressure.

At the same time, keeping interest rates elevated for too long carries its own economic risks. This makes the path ahead less certain.

Could the Fed Raise Interest Rates Again?

It is possible.

In fact, three members of the Federal Open Market Committee voted in favour of a 0.25 percentage point increase at the July meeting.

However, our base-case view is that another prolonged aggressive rate-hiking cycle is unlikely unless inflationary pressures worsen significantly. Borrowers should therefore avoid assuming that interest rates will either continuously fall or suddenly return to the extreme levels experienced during the previous tightening cycle.

A more realistic scenario may be a prolonged period where rates remain relatively low but fluctuate within a range.

How Long Could Singapore Mortgage Rates Stay Below 2%?

Our view is that sub-2% mortgage rates could remain available for the next two to three years, although there is no guarantee.

Rather than expecting rates to fall continuously, we believe borrowers may see periods where mortgage rates move moderately higher or lower depending on inflation, energy prices, SORA and expectations surrounding US monetary policy.

This is also why trying to identify the absolute bottom of the mortgage market can be difficult.

A borrower waiting for a 1.40% package to become 1.30%, for example, could potentially end up facing 1.60% instead if market conditions change.

If today’s package already represents a substantial saving compared with your existing mortgage, securing the savings may be more important than trying to time the exact bottom.

Fairloan’s Mortgage Strategy for August 2026

For suitable borrowers, one strategy we currently favour is:

Secure a competitive 2-year fixed rate now, then review the mortgage again towards the end of the fixed period.

Why two years?

Current 2-year fixed packages are particularly attractive, with rates from around 1.40% p.a. for qualifying borrowers.

Locking in for two years provides certainty while avoiding an excessively long commitment.

When the package approaches expiry in 2028, borrowers can reassess the market.

If rates remain attractive, they could potentially secure another fixed package, perhaps even a 3-year fixed rate if the pricing and features make sense at that point.

In an ideal scenario, this could potentially provide approximately five years of relatively low and predictable mortgage rates.

Of course, nobody can guarantee what mortgage rates will be in 2028, so the second step should always depend on market conditions at that time.

Why Five Years of Low Rates Can Make a Big Difference

Consider a homeowner with a remaining mortgage tenure of 20 years.

If the borrower manages to secure attractive rates for the next five years:

5 years ÷ 20 years = 25% of the remaining mortgage tenure.

That means one-quarter of the remaining mortgage journey could potentially be spent at relatively low interest rates.

For a large housing loan, the cumulative interest savings can be significant. This is why mortgage planning should not simply be about finding the cheapest rate today.

It should also consider how today’s package positions you for your next refinancing or repricing opportunity.

So, Have Singapore Mortgage Rates Bottomed Out?

It is impossible to identify the exact bottom until after it has passed.

However, with competitive fixed mortgage rates currently starting around 1.40% p.a., Singapore homeowners are already looking at borrowing costs that are considerably more attractive than the elevated rates experienced in previous years.

The question may therefore be less about:

“Can I get another 0.10% lower?”

and more about:

“Is the rate available today attractive enough for me to lock in?”

For borrowers comparing a fixed and floating package with a difference of less than approximately 0.10%, a competitive fixed rate may be worth considering for the certainty and predictable monthly repayments it provides.

Ultimately, the right package depends on more than the headline interest rate.

Loan quantum, lock-in period, refinancing plans, property type, repayment flexibility and individual financial circumstances should all be considered.

Looking for the Lowest Mortgage Rate in Singapore?

Fairloan Mortgage Advisory compares home loan packages across multiple banks to help homeowners identify suitable options for refinancing, repricing and new property purchases.

Instead of looking only at the lowest advertised rate, we compare the interest rate, lock-in period, subsidies, flexibility and refinancing strategy to help clients structure their mortgage for both today and the years ahead.

*Rates and market observations stated in this article are based on packages and market conditions observed in August 2026. Mortgage rates may change without notice and are subject to bank approval, loan quantum, property type and borrower’s profile.