Fixed Rate Mortgage in Singapore vs Floating: Which Suits an Uncompleted Condo?
Fixed or floating home loan for a new launch? How fixed rate mortgages and SORA-pegged floating loans work during construction, what lock-in periods mean, and how to decide.
Choosing between a fixed rate mortgage in Singapore and a floating package is one of the first decisions after you book a new launch. For a completed home, the choice is fairly simple: you draw the full loan and start paying. For an uncompleted condo, the bank pays the developer in stages over several years, so the question becomes more interesting. You may be locked into a package for a period when you owe very little.
This guide explains how fixed and floating loans work during construction, what lock-in periods and conversion options mean, and how buyers of a new launch such as LinkTown Residences (Hougang Central Residences) can decide. We do not quote live rates; packages change weekly.
Fixed vs floating home loans: the basics
| Fixed rate | Floating rate | |
|---|---|---|
| How the rate is set | Fixed for a set period, usually 2–3 years, then reverts to a floating rate | Benchmark (usually compounded SORA) plus a spread, or a bank’s own deposit/board rate |
| Instalment | Stable during the fixed period | Moves when the benchmark moves |
| Typical pricing | Often higher than floating at the same point in time | Often lower, but can rise |
| Lock-in | Commonly 2–3 years | Commonly 2 years; some packages have shorter or none |
| Suits | Borrowers who need predictable payments | Borrowers with a buffer who accept variation |
Floating rate home loans in Singapore used to be pegged to SIBOR or SOR. Those benchmarks have been phased out, and most floating packages now reference compounded SORA, the average of the actual overnight interbank rate over one or three months. Because it is compounded over a period, it moves more smoothly than the old single-day benchmarks.
Why an uncompleted condo is different
Under the progressive payment scheme, you pay the first 20% (5% at the option and 15% at the S&P) plus the next 5% from your own cash and CPF, and the bank only starts disbursing after that. Loan drawdowns then follow construction milestones through to TOP and CSC. Our progressive payment guide has the full schedule.
You pay interest only on what has been drawn. That changes the maths, as this example shows.
Example: how much does the rate matter during construction?
Take an illustrative S$1.7m unit with a 75% loan of S$1,275,000 over 30 years. The rates below are assumptions for illustration, not quotes.
| Stage reached | Loan drawn | Monthly @ 2.5% | Monthly @ 3.0% | Monthly @ 3.5% |
|---|---|---|---|---|
| Foundation | S$85,000 | ≈ S$336 | ≈ S$358 | ≈ S$382 |
| Reinforced concrete frame | S$255,000 | ≈ S$1,008 | ≈ S$1,075 | ≈ S$1,145 |
| Car park, roads and drains | S$595,000 | ≈ S$2,351 | ≈ S$2,509 | ≈ S$2,672 |
| TOP | S$1,020,000 | ≈ S$4,030 | ≈ S$4,300 | ≈ S$4,580 |
| CSC (fully drawn) | S$1,275,000 | ≈ S$5,038 | ≈ S$5,375 | ≈ S$5,725 |
Illustrative only: amortised over 30 years on the amount drawn; banks recalculate at each drawdown. Assumed rates are not offers.
In the early stages, a 0.5% difference in rate is worth only tens of dollars a month. Once the loan is fully drawn, the same 0.5% gap (2.5% vs 3.0%) is about S$338 a month, or roughly S$4,050 a year. The rate you pay in the year or two around TOP and CSC matters far more than the rate you lock in at booking.
You can test your own numbers with the loan calculator.
Maximum loan & affordability (TDSR)
Estimates for illustration only, based on published IRAS/MAS rules. Rates change; confirm with IRAS, your bank and your lawyer.
Home loan lock-in periods: read the fine print
A lock-in period is the time during which redeeming or refinancing the loan attracts a penalty, typically a percentage of the amount redeemed. For uncompleted properties, check these points with each bank, because practice varies:
- When the lock-in starts. From first disbursement, or from TOP? A lock-in that starts at first drawdown may expire before most of the loan is drawn.
- Clawback of subsidies. Banks often subsidise legal and valuation fees and may claw them back if you redeem within a set period, which can be longer than the lock-in.
- Cancellation of undrawn amounts. Because the loan is drawn progressively, switching banks before full disbursement can attract a cancellation fee on the undrawn portion. Industry sources cite around 1.5–2% of the undisbursed amount, but check your letter of offer.
- Partial prepayment. Some packages allow partial prepayments on the drawn amount without penalty; others charge during lock-in.
- Conversion. Some banks allow a free or low-cost switch to another of their packages, often around TOP. Ask whether this exists and how many times you can use it.
Fixed or floating home loan: how to decide
A fixed rate may suit you if…
- Your budget has little room for rate increases once the loan is fully drawn.
- You are timing the sale of an HDB flat and want one less moving part. See our HDB upgrader guide.
- The fixed period would cover TOP and CSC, when balances are highest.
A floating rate may suit you if…
- You have a healthy cash buffer and can absorb higher instalments.
- You value flexibility, such as a shorter lock-in or the option to convert.
- You expect to reprice or refinance around TOP anyway.
Whichever you choose, your loan amount is still set by TDSR at the 4% stress-test rate and the LTV limits, not by the package rate. Our home loan guide for new launches covers those rules, and our CPF guide explains how CPF can help with instalments.
Repricing and refinancing after lock-in
Most Singapore borrowers do not keep the same package for 30 years. Once the lock-in ends, you can:
- Reprice to a different package with the same bank, usually with less paperwork and sometimes a small admin fee.
- Refinance to another bank, which may offer a better rate but can involve new legal and valuation costs (often subsidised) and a new lock-in.
For a new launch, a common approach is to review your package a few months before TOP, when the balance is about to jump and your original lock-in may have expired.
A checklist before you sign
- Get an in-principle approval before booking.
- Compare the rate for years 1–3 and what it reverts to after.
- Confirm lock-in start date, penalty and clawback terms.
- Ask about conversion options and cancellation fees for undrawn amounts.
- Stress-test your budget at a higher rate than today’s.
Planning to buy at LinkTown Residences when it launches? Register your interest for launch details and a payment schedule for your chosen unit type.
General information only, not financial advice. Package features, lock-ins, fees and conversion terms vary by bank and change often. Verify with your bank, mortgage adviser, MAS and CPF. Information as at Sep 2026.
