Your Floating Rate Has Already Risen. You Just Haven't Paid It Yet.

Almost every floating home loan in Singapore is priced off 3-month compounded SORA. On 11 August 2026 that benchmark stood at 1.1172%. The overnight SORA that feeds into it printed 1.3688% the same day.

Those two numbers are 25 basis points apart, and the gap is not a market view about the future. It is arithmetic about the past. Compounded SORA is calculated in arrears — the 3-month figure is the compounded average of the daily overnight rate over the preceding three months. If the overnight rate simply stays where it is, the benchmark on your loan rises to meet it, and nothing new has to happen in the market for that to occur.

The ladder is the signal

MAS publishes SORA in four forms each business day. All four, as at 11 August 2026:

Read it as three overlapping averages of the same series. The most recent month averages higher than the last three months, which average higher than the last six. A compounded ladder in that order means the underlying rate has been rising — the shorter the lookback window, the more of the recent increase it contains.

That is a more reliable read than any single print. One day's overnight rate is noisy: it moves with interbank liquidity, quarter-ends and month-ends, and 1.3688% on one Tuesday is not a forecast. But the ordering of the compounded tenors is not noisy, and it is unambiguous.

For context on how far this has come: 3-month compounded SORA rose for the first time in two years in May 2026, at 1.07%. Three months later it is 1.1172%.

MAS never set a rate

Here is the part that catches people out. When Singapore mortgage rates move, the instinct is to ask what MAS did to interest rates. MAS did nothing to interest rates, because it does not have an interest rate.

Read the July 2026 Monetary Policy Statement and you will not find a policy rate anywhere in it. What you find is this:

"MAS will therefore increase the rate of appreciation of the policy band very slightly. The extent of this increase is smaller than that in April. There will be no change to the width of the policy band and the level at which it is centred."

The instrument is the Singapore dollar nominal effective exchange rate — the S$NEER — and the policy decision is how steeply the currency is allowed to appreciate. That is the whole toolkit.

The consequence for your mortgage follows from a constraint, not a choice. Singapore runs an open capital account and manages the exchange rate. A country cannot do both of those and also set its own interest rates: money would simply move to arbitrage the difference. So Singapore's interest rates are, to a first approximation, imported — roughly the foreign rate minus however much the market expects the Singapore dollar to appreciate.

You can see the wedge directly. The Federal Reserve has held its target range at 3.50%–3.75% for five consecutive meetings through July 2026, with three members dissenting in favour of a hike. Against a 3.625% midpoint, Singapore's overnight rate of 1.3688% sits 2.26 percentage points lower. Nobody legislated that discount. It is the expected appreciation of the Singapore dollar, priced.

Which explains the direction of travel. MAS steepened the appreciation path in April, and steepened it again in July — but "very slightly," and by explicitly less than in April. A smaller addition to the expected appreciation path implies a smaller discount to the external anchor, which nudges domestic rates up toward it. Meanwhile the anchor itself has stopped falling.

That reading is a mechanism, not a forecast, and MAS does not target it. But it is consistent with the ladder above, and with MAS's stated reason for tightening: core inflation came in at 1.5% year-on-year in Q2, up from 1.2% before the Middle East conflict, and MAS now projects both core and CPI-All Items inflation to average 1.5%–2.5% for 2026, with core stepping up from July and staying elevated into early next year.

What it costs on an actual loan

The cheapest floating packages on offer are 3M SORA + 0.20%, which at today's benchmark is 1.3172%. The cheapest fixed rate is around 1.35%.

Two questions matter. First: how far does the benchmark have to move before the float loses to the fixed?

Fixed at 1.35% equals a floating package once 3M SORA reaches 1.15%. It is at 1.1172%. The breakeven is 3.3 basis points away — and the overnight rate already prints 21.9 basis points above it.

Second: what does the convergence cost if the overnight rate simply holds? On a S$1,000,000 loan with 25 years remaining:

That is S$118 a month, or S$1,413 a year, from no further market movement at all. Over a two-year lock-in the converged float costs S$96,762 against S$94,303 on the 1.35% fixed — a difference of S$2,460.

On a S$600,000 loan over the same tenure the monthly step is S$71; on S$800,000 it is S$94.

None of this is a large sum against the size of the debt, and that is worth saying plainly. The point is directional, not dramatic: the certainty premium on a fixed rate is currently about 3 basis points, and the benchmark has already moved further than that in the data you can see.

What we would actually do

If your lock-in has expired or expires within six months, this is the window to compare packages rather than wait. Waiting for the increase to show up in your instalment means waiting for something that has, mechanically, already happened.

If you are mid lock-in, do nothing. A 25-basis-point drift does not justify a break fee, and our reprice-versus-refinance math sets out where the line sits.

If you are choosing between fixed and floating on a new purchase, the trade-off is no longer the one it was in June, when we priced the same decision at a 13-basis-point spread with SORA still falling. The spread has narrowed to roughly 3 basis points and the direction has turned. Certainty is cheaper than it was, and worth more.

And a reminder that cuts the other way: a cheap headline rate does not enlarge your loan. Banks still size every loan against a stress floor near 4%, not the 1.3% you pay.

Rates quoted are indicative package rates as at 11 August 2026 and vary by loan size, property type and borrower profile. SORA figures are MAS-published benchmarks as at 11 August 2026. The convergence scenario assumes the overnight rate holds; it is an illustration of the lag, not a forecast.

Methodology published. No spin.