SORA Drops to 2.08%: What It Means for Homebuyers in 2025

Authored by Raymond Tiah

SORA Falls to 2.08% – What’s the Impact?

As of 13 March 2025, the Singapore Overnight Rate Average (SORA) dropped to 2.08%, its lowest point since December 2022. For buyers and homeowners, this dip could mean lower mortgage costs—but how long will it last, and should you act now?

Why Did SORA Drop?

Several factors are behind the recent decline in interest rates:

• Increased bank liquidity – Slower lending activity and high fixed deposits leave banks with more funds.

• Strong Singapore dollar (SGD) – A resilient currency eases pressure on domestic interest rates.

• Global rate shifts – The US Federal Reserve is expected to reduce rates, influencing borrowing costs worldwide.

What This Means for You as a Buyer

The dip in SORA to 2.08% presents several important implications for prospective homebuyers in Singapore. Here's how it could affect your property journey:

 Lower Monthly Mortgage Repayments

Floating-rate home loans pegged to SORA are now more affordable. With lower interest rates, your monthly instalments will decrease, easing cash flow and improving your ability to manage long-term financial commitments.

 Greater Loan Eligibility

As rates fall, your Total Debt Servicing Ratio (TDSR) improves. This means banks may approve larger loans, allowing you to consider better locations or larger unit sizes without exceeding your monthly income limits.

 More Flexible Financing Options

With SORA dipping, buyers can now assess whether to go with a floating-rate package or lock in fixed rates. Floating rates offer short-term savings, while fixed packages may still be appealing for those seeking stability.

 It May Be a Short-Term Window

Interest rates are not guaranteed to stay low. Global developments—especially from the U.S. Fed—can quickly push borrowing costs up again. Buyers who wait may face higher monthly repayments later.

 Increased Market Activity

As loans become cheaper, more buyers are entering the market, creating higher demand for well-priced or prime-location homes. This can result in quicker sales cycles and tighter competition for attractive units.

Current Market Reactions

The market is already responding:

• Resale condo prices dipped in October 2024 (first time in 10 months), but resale volume jumped 8.1%, showing growing buyer confidence.

• More buyers are returning, encouraged by better affordability.

• Developers may react by firming prices for upcoming new launches in 2025.

Should You Act Now?

Now may be a strategic window to buy:

• Lower borrowing costs make financing more manageable.

• Delaying could mean facing higher prices if buyer demand continues to rise.

Let’s review your budget, timeline, and goals—so you can make the most of current market conditions.

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