Volume-weighted average of overnight unsecured interbank SGD lending. Replaced SIBOR as the benchmark for floating-rate home loans in Singapore.
SORA — Singapore Overnight Rate Average — is the volume-weighted average rate of unsecured overnight interbank SGD borrowing. Published by MAS each business day, it represents the actual cost banks pay each other for overnight liquidity.
SORA replaced SIBOR (Singapore Interbank Offered Rate) as the benchmark for floating-rate home loans. SIBOR was fully phased out at end-2024 — all SIBOR-based loans converted to SORA.
SIBOR was a quoted rate — banks submitted what they thought they could borrow at. After the LIBOR scandal in the early 2010s exposed widespread manipulation of quoted reference rates globally, regulators pushed for transaction-based benchmarks.
SORA is computed from actual overnight trades — harder to manipulate and more representative of real funding costs.
The transition was led by MAS via the SC-STS (Steering Committee for SOR & SIBOR Transition to SORA), with mortgage products migrating from 2021 onwards.
Since SORA is an overnight rate, mortgages don't use it raw — they use Compounded SORA, the rate compounded over a defined backward-looking window.
Common windows: 1-month Compounded SORA, 3-month Compounded SORA. Banks publish these daily.
A 3-month Compounded SORA mortgage typically resets quarterly. The benefit is smoother, less reactive movement compared to SIBOR's daily fluctuations.
Bank pricing is typically expressed as '3M SORA + 0.80%'. If 3-month Compounded SORA today is 3.50%, your loan rate is 4.30% for the next quarter.
Spreads (the '+0.80%' part) range from ~0.60% for the cheapest banks during competitive periods to 1.00%+ for less aggressive pricing.
Spreads can step up after the lock-in period. Read the loan agreement carefully — the rate that gets you through the door may not be the rate you pay long-term.
Refinancing every 2 – 3 years to catch lower spreads is normal practice in Singapore.
Singapore Overnight Rate Average — the volume-weighted average rate at which banks in Singapore lent each other SGD on an unsecured overnight basis. Published daily by MAS. Replaced SIBOR as the benchmark for floating-rate Singapore home loans.
SORA is computed from actual transactions, while SIBOR was a quoted rate based on bank submissions. After the global LIBOR manipulation scandal exposed weaknesses in quoted benchmarks, regulators pushed for transaction-based alternatives. SORA is harder to manipulate and better reflects real funding costs.
SORA is an overnight rate, but mortgages don't reset daily — they use compounded SORA over a defined window (typically 1 or 3 months). Compounded SORA smooths out daily fluctuations and gives a representative rate for the period.
Typically as '3M Compounded SORA + bank spread'. For example, if 3-month Compounded SORA is 3.50% and the bank spread is 0.80%, your mortgage rate is 4.30% for the next 3-month reset period. Spreads vary by bank, lock-in terms, and loan size — comparison shopping every 2 – 3 years is the norm.