Why Buying Or Refinancing Makes More Sense In 2026

Why Buying Or Refinancing Makes More Sense In 2026

By Keith Tan Boon Kee | January 2026

If you've been sitting on the fence about buying property or refinancing your home loan, 2026 might be the year to act. Interest rates are finally shifting in favor of borrowers, and the window of opportunity may not stay open forever.

The SORA Rate Outlook

The Singapore Overnight Rate Average (SORA) has been on a downward trend. After peaking in 2023-2024, rates are expected to fall to around 0.7% by December 2026, according to market forecasts.

What this means for you:

For a $1 million loan over 25 years, every 0.5% reduction in interest rates saves you approximately $250 per month. Over the life of the loan, that's $75,000 in savings.

Why Buying Now Makes Sense

1. Lower Monthly Payments

With SORA rates declining, your monthly mortgage payments will be more affordable compared to 2023-2024. A buyer who waited out the high-rate period is now rewarded with better financing terms.

2. Property Prices Have Stabilized

The cooling measures introduced over the past few years have done their job. Price growth has moderated, meaning you're less likely to be buying at a peak. The frenzied bidding wars of 2021-2022 are largely behind us.

3. More Negotiating Power

In a stabilized market, buyers have more room to negotiate. Developers may offer better discounts, and resale sellers are more realistic about pricing.

4. Rental Yields Remain Strong

Singapore's rental market continues to be robust. If you're buying for investment, rental yields of 3-4% are achievable in many districts, which compares favorably to the cost of borrowing.

Why Refinancing Now Makes Sense

1. Lock In Lower Rates

If you took out a loan during the high-rate period (2022-2024), you're likely paying 3.5-4.5% or more. Refinancing now could bring that down to 2.5-3%, saving you hundreds monthly.

2. Banks Are Competing for Business

With rates falling, banks are actively competing for refinancing customers. This means better packages, cashback offers, and more favorable terms.

3. Consider Fixed vs Floating

In a declining rate environment, floating rates (pegged to SORA) may be more attractive. However, if you prefer certainty, some banks offer competitive fixed-rate packages for 2-3 years.

When NOT to Refinance

Refinancing isn't always the right move. Consider staying put if:

My Recommendations

For First-Time Buyers:

For Existing Homeowners:

For Investors:

The Bottom Line

2026 presents a favorable environment for both buyers and existing homeowners looking to optimize their financing. The combination of lower interest rates, stabilized prices, and strong rental demand creates a window of opportunity.

However, every situation is different. Your decision should be based on your personal financial situation, investment goals, and risk tolerance.

Need Help With Your Property Decision?

I've helped over 1,000 clients navigate buying, selling, and financing decisions over 25 years. Whether you're a first-time buyer or looking to refinance, I can help you analyze your options.

Contact Keith Tan:

CEA: R003793E | ERA Realty Network