The Fed Raised Rates Three Weeks Ago. Singapore's Benchmark Has Moved 0.03 Points

For three years the direction of interest rates seemed settled. After the sharp rises of 2022 and 2023, rates came down, and Singapore home loans got cheaper with them.

On Wednesday, 16 September, the US Federal Reserve broke that pattern. It raised its policy rate by 0.25 percentage points, its first increase since 2023, and its policymakers signalled that more increases could follow.

For many homeowners here, the memory of 2023 is still fresh: floating-rate repayments that jumped by hundreds of dollars a month within a year. So the question that followed was predictable. If the Fed is raising again, is that about to happen again here?

CNA put it to the people who watch this for a living. Their answers, and our own data, point to the same conclusion: the risk is real, but it is not the same risk as 2023, and it has not arrived yet.

Singapore does not set interest rates the way the Fed does. MAS manages monetary policy through the exchange rate, so there is no Singapore "policy rate" to raise in response.

What floating home loans here usually track is SORA, the Singapore Overnight Rate Average. As CNA explained, SORA is based on actual transactions in Singapore's overnight interbank market, and it is affected by domestic liquidity and wider financial conditions as well as by what happens abroad. Many floating mortgages are priced at compounded SORA plus a margin set by the bank.

US rates do matter. They influence global funding conditions, and those feed into SORA. "When the Fed raises rates, funding costs generally rise, and benchmarks such as SORA may also move higher," SingCapital chief executive Alfred Chia told CNA. But he added that home loan rates may not move immediately, and any increase "may also not be a direct one-for-one adjustment". It also depends on competition between banks.

OCBC's chief economist Selena Ling pointed to the variable that matters most: how long rates stay high. "Higher-for-longer rates would keep mortgage servicing costs elevated, especially for borrowers on floating-rate mortgages linked to SORA," she said.

Very little. Here is the 3-month compounded SORA that MAS publishes, the version most floating home loans reference, at the end of each month over the past year:

Source: MAS.

On 16 September, the day of the Fed's decision, it stood at 1.20%. Three weeks later it is 1.23%, up 0.03 points.

Two things are worth noticing. First, the turn came before the Fed. SORA bottomed in April at 1.02% and has been rising slowly since May. Second, the 3-month compounded figure is backward-looking: it averages the overnight rate over the previous three months, so it changes slowly. If the overnight rate does climb, floating-rate borrowers will see it gradually, not overnight.

This is the comparison that puts the hike in proportion. Here is where 3-month compounded SORA ended each year:

Its highest point since 2020 was 3.76%, published on 6 November 2023. Today's 1.23% is about a third of that.

The 2022–2023 shock was SORA rising by more than three points in about two years. What has happened since the Fed's hike is a rise of 0.03 points. Even if SORA climbed by several times the Fed's quarter point, it would still be well below where floating-rate borrowers were paying in 2023 and 2024.

To make this concrete, take the national median 4-room HDB resale price in 2026 H1, $630,000, and a 75 per cent loan of $472,500 over 25 years:

Level monthly instalments on a monthly-rest loan. The rate is whatever the loan averages over 25 years, not this year's rate.

Read down the table and each half-point adds roughly $110 to $130 to the monthly payment on this loan, and tens of thousands of dollars over the full term. A quarter-point rise is about half that.

That is noticeable but manageable for most households. The people Ling flagged as most exposed are those with large outstanding loans or repayments that already take a large share of income. A bigger loan scales these numbers up. A private-property loan of twice this size feels each step twice as hard.

This is the decision where the rate outlook matters most for HDB buyers, and it is a one-way door.

HDB's concessionary loan rate was 2.6 per cent for April to September 2026, set at 0.1 point above the CPF Ordinary Account rate and reviewed every quarter. It has stayed close to that level for years.

SORA has moved far more:

• From 14 November 2022 to 14 March 2025, 3-month compounded SORA was above 2.6 per cent on 585 published days. On those days, a SORA-pegged loan cost more than an HDB loan even before the bank's margin.
• Since March 2025, it has been below 2.6 per cent. At 1.23 per cent today, a SORA-pegged package can be cheaper than an HDB loan even after the bank adds its margin, depending on the package.

So the choice is not simply about which rate is lower this month. The key rule is in the fine print: you can refinance from an HDB loan to a bank loan, but never from a bank loan back to an HDB loan. A buyer who leaves the HDB loan for a cheaper SORA package gives up the HDB rate for good, including in any future 2023-style spike.

The Fed's hike does not settle that choice either way. It is a reminder that the gap between SORA and 2.6 per cent can close, and once did, by a lot. We compare the two loans in more depth in our fixed or floating home loan guide.

We do not give advice on individual loans, and nobody can tell you where SORA will be in two years. But the trade-off can be set out clearly.

A fixed rate buys certainty for its lock-in period, usually two to three years. If rates rise, you are protected until it ends. If they fall, you pay more than you would have. Ling noted that borrowers on fixed-rate packages are less affected by higher-for-longer rates.

A floating rate passes changes on, and because most reference the backward-looking 3-month compounded SORA, they arrive gradually. You pay less when SORA is low and more when it rises, with no cap.

What matters most is how much a rise would hurt you. If a few hundred dollars more a month would strain your household budget, certainty is worth paying for. If you have slack, a floating rate's exposure may be a risk you can carry.

We wrote in June that fixed rates were still winning over cheaper SORA for many borrowers once lock-ins and margins were included. A single Fed move does not change that analysis. Check the current packages, the lock-in, and the penalty for repricing before deciding. Our guide to repricing versus refinancing covers the switching costs.

Not yet, on the evidence so far.

Private home prices rose 1.4 per cent in the third quarter, URA's flash estimate showed, the fastest in nearly two years. HDB resale prices were roughly flat, as they have been all year. Borrowing costs at today's SORA levels are not what is holding buyers back.

The concern is about direction rather than level. Analysts commenting on recent land sales have flagged it. After Eco World's record bid for a Sin Ming site, Newmark's Wong Shanting warned that job market weakness and "the possibility of higher interest rates in the short-to-medium term" could dampen appetite for homes at benchmark prices when the project launches.

That is the risk to watch. Developers are paying land prices that assume today's demand will hold for years. If rates turn upward and stay there, the homes built on that land will be selling into a tighter market than the one they were priced for.

Some limits worth stating.

One hike is not a cycle. The Fed signalled more increases could follow, but signals change. Three weeks of SORA data say what has happened, not what will.

SORA is a benchmark, not a loan rate. Floating packages add a bank margin that varies by bank and package, and changes after lock-ins. We do not track bank packages.

Our loan table is an illustration. It assumes a $472,500 loan at a single average rate for 25 years. Real loans change rate over time, and your own size, term and package will differ.

HDB's rate is reviewed quarterly. The 2.6 per cent applied from April to September 2026. Check HDB's current rate before comparing.

What we would not hedge on: three weeks after the Fed's hike, the benchmark behind Singapore's floating home loans has risen by 0.03 points, and it is about a third of its 2023 peak.

Two kinds of numbers, kept apart.

From the reporting: the size and date of the Fed's hike, its being the first since 2023, the signal of more to come, how SORA is set, and the comments from Alfred Chia and Selena Ling come from CNA, linked below. URA's 1.4 per cent Q3 figure comes from URA's flash estimate, and Wong Shanting's comment from The Straits Times' report on the Sin Ming tender.

PropKaki's own data, as of 6 October 2026:

• SORA readings are MAS's published 3-month compounded SORA, read live from MAS on 6 October 2026 (1,698 daily values since January 2020).
• The loan table applies standard monthly-rest loan arithmetic to a 75 per cent loan on the national median 4-room HDB resale price for 2026 H1 ($630,000, 5,379 resales), over 25 years.
• HDB loan rules (the 2.6 per cent rate, the no-refinancing-back rule) were read from HDB, MAS and CPF pages on 19 September 2026.

The news:

• CNA: CNA Explains: Will Singapore home loan rates rise after the Fed's rate hike?, 17 September 2026, with comment from Alfred Chia (SingCapital) and Selena Ling (OCBC).
• Urban Redevelopment Authority: Q3 2026 flash estimate of the private residential price index, 1 October 2026.

The data:

• Monetary Authority of Singapore: domestic interest rates, 3-month compounded SORA, January 2020 to 6 October 2026.
• PropKaki national median 4-room HDB resale price, 2026 H1.
• HDB, MAS and CPF housing loan rules, as read on 19 September 2026.

This is commentary by the PropKaki Editorial Desk on reporting by CNA and on MAS data. The Fed decision and the expert views belong to that reporting; the SORA and loan analysis, the framing and the opinions are ours.

It is opinion and general information, not financial, legal or property advice, and not a forecast of interest rates or a recommendation on any loan. Speak to your bank or an independent adviser before choosing or changing a home loan.

Published 6 October 2026.