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Sora vs. Sibor vs. SOR: How Can They Affect Your Home Loan?

sora vs sibor vs SOR
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SORA is a lower-risk home loan option when compared to SIBOR and SOR. This is because it doesn’t depend on the foreign exchange rate with the US Dollar. So, there’s no impact from any fluctuations in the US economy. There’s more predictability with SORA, which eases how you gauge the monthly pay payments.

You may come across specific acronyms when seeking home loan packages as a first-time or existing homeowner. These are SORA, SOR, and SIBOR.

These are acronyms that represent the interest rate benchmark across the industry. As a result, there’s a better chance of determining the different types of house loans available. It’s important to know what the acronyms mean and how they work.

Learn all about SOR, SORA, and SIBOR, then compare the 3. After that, you can also note the recent and upcoming changes in the market affecting SOR and SIBOR.


When you’re seeking a home or commercial loan, it’s important to understand SORA, SIBOR, and SOR. These can impact this financial option for homeowners and the Singapore interbank market.


SORA (Singapore Overnight Rate Average) is the average volume rate of definite borrowing in an unsecured overnight interbank SGD transaction. This must happen only between the hours of 8 am and 6:15 pm.

SORA home loans are now available in Singapore from 2021. However, there isn’t a diversity of these compared to SIBOR-attached home loans. The overnight rate average SORA calculations must consider the amount being lent.


SIBOR (Singapore Interbank Offered Rate SIBOR) is the average rate at which banks in Singapore seek loans from each other. The interest rate benchmarks determine whether banks borrow unsecured funds overnight interbank SGD transactions from one another in Singapore.

At this point, the banking industry operates as Singapore’s interbank market to move borrowed money and manage the liquid overnight funding market. This goal is to replenish the cash reserves of an area bank whose withdrawals have nearly exhausted reserves.


SOR (Singapore Dollar Swap Offer Rate)

Swap Offer Rate SOR determines the average interest rate charged for commercial loans to large institutions. However, this was discontinued as of April 2021, including SOR home loan packages.

At a Glance

Interest Rate BenchmarkAdministering EntityRate CalculationsLoan Types
SORA (Singapore Overnight Rate Average)MAS (Monetary Authority of Singapore)Validation and Calculation of reported rates by MAS by banks hence the derivation of back-ward looking overnight rates
  • House Loans
  • Commercial Loans
SIBOR (Singapore Interbank Offer Rate)ABS (Association of Banks in Singapore)Compilation and ranking of forward-looking rates from 20 major banks by ABS. Only by eliminating the top and bottom quartiles are the final rate derived. This is the average interbank offered SIBOR rate by the 10 banks that remain.
  • Home Loans
  • Derivatives
  • Government Bonds
  • Corporate Loans


SOR (Singapore Dollar Swap Offer Rate)ABS (Association of Banks in Singapore)ABS uses the borrowed USD LIBOR as an input for deriving the volume rate average of transactions borrowed USD to convert to SGD.
  • Commercial loans
  • Derivatives

How Do SORA & SIBOR Home Loans Work?

SORA rates are seen as backward-looking overnight rate average SORA derived from the average rate of the existing Singapore Interbank Offered Rate lending transactions. On the other hand, SIBOR rate is more forward-looking and vulnerable to high market volatility due to future rates for banks borrowing unsecured funds.

From this, it’s clear there’s more stability regarding SORA home loan packages than SIBOR. Still, how do SORA, SIBOR, and SOR affect your home loan?


It’s better to take an example when trying to understand how these 3 financial terms work. A couple intends to acquire a SORA-pegged $450,000 home loan lasting 25 years for a resale Housing & Development Board (HDB) flat. When it’s time to take the home loan, the compounded SORA rate for three months is 0.08089%.

3-Month Compounded SORA

Always note that the compounded SORA rate changes every three months. This is why it’s called the 3-month compounded Singapore Overnight Rate Average.

On top of the SORA rate, there’s also a markup that the couple incurs from DBS. This is more of a spread and is part of what forms the total interest rate banks charge. Knowing the total interest rate is crucial as it dictates the monthly payments the couple will have to make.

Agreeing to this home loan means you go through a 2-year lock-in period. Once the 24 months elapse, in year 3, you have the option of refinancing. This gives you a chance to acquire a competitive home loan package.

SORA is a lower-risk home loan option when compared to SIBOR and SOR. This is because it doesn’t depend on the foreign exchange rate with the US Dollar. So, there’s no impact from any fluctuations in the US economy.

There’s more predictability with SORA, which eases how you gauge the monthly pay payments. This is true for home, price commercial loans or corporate loans.

Should You Choose a SIBOR-Pegged Home Loan?

If you are considering a SIBOR home loan package, you must begin by choosing between fixed and floating rate home loans

The duration of the loan comes into play with the fixed rate home loan. The goal is to go through the lock-in period for the interest rate of the property loan. As a result, you won’t feel the effect if there’s a rise in interest rates on such alternative loan packages.

You still pay the lower rate agreed upon when you took the loan on a fixed rate. However, if an interest rate falls, you lose because you can’t pay a lower rate during the lock-in period. But, things are the opposite when it comes to floating rate packages.

The choice between fixed and floating rate mortgages is made daily, especially regarding corporate alternative loan packages. Multinational companies have to make this choice to save money. But, things don’t always turn out positively when using borrowed money.

Still, there’s not as much unpredictability today so you might enjoy some stability with SIBOR loans.

real estate broker agent with customer holding home

Should You Choose SORA-Pegged Home Loan?

It’s hard to say if choosing Singapore Overnight Rate Average home loans is the better option. Yes, there’s more stability with the house loans’ interest rates banks charge. But, there is a SORA conversion package available in the market.

Make financing your dream home possible with the Maybank Private Property Home Loan.

What Entails Shifting from SOR and SIBOR to SORA?

Shifting from SIBOR to SORA

There’s more predictability regarding the SORA conversion package, making them a stable option. It’s important to know that SORA’s backward looking nature is its stronghold.

As for SIBOR, it’s all about the future. It reflects the interest rates that Singapore banks are planning to charge at a future date. This makes SIBOR unpredictable since banks have an option to increase or decrease home loans’ interest rates banks charge without any explanation.

SORA conversion package is more predictable because of the 3-month which even future loans might use. But, since there are more SIBOR loan options, these are worth considering.

Still, anyone with a floating rate home loan package must understand that SORA will replace SOR and SIBOR. SORA will take the position of the key benchmark interest rate for home loans and other types in the market.

Shifting from SOR to SORA

Shifting from a SOR loan to a SORA loan requires a standardized Adjustment Spread application. This helps account for the term of the loan and credit risks. SOR does factor in the two, but SORA loans don’t do the same. As a result, you note that SORA is lower than SOR.

The Adjustment Spread is calculated based on the average difference between 3-month SORA and SOR. Compounding the two takes place in advance over the last 3 months, subject to zero floors. Thankfully, there are no additional fees during this switch.

As for SIBOR home loan borrowers, other banks are contacting their clients to provide a list of options. If you’re yet to hear from them, visit the nearest branch immediately since the 6-month SIBOR was discontinued on 31st March 2022.

As for borrowers with loans that have a 1 to 3-month SIBOR reference, there’s still a waiting period for loan conversion. The benchmark interest rate will continue until 31st December 2024.

What is SORA Affected By?

When comparing SORA vs SIBOR vs SOR, it’s important to note that there’s a change taking place in the market. Existing homeowners with SIBOR loans are checking out options to transition to the SORA-pegged home loan package.

Sora is affected by the following factors:-

  • Shifting from SOR and SIBOR benefits the market.
  • Clear Market Fragmentation through SORA
  • Economic Outlook of Singapore and the Global Banking System

Moving from SOR and SIBOR means supporting a more stable SORA single rate benchmark. This works towards promoting the SGD financial markets to improve robustness and integrity.

The financial institutions/banks and customers benefit from Singapore’s Overnight Average Rate and ensure clear market fragmentation. It aids pricing and trouble-free assessment of interest rate pegged loans.

A boom or a recession determines the eligible transactions of $1 million and above from a minimum of 5 reporting Singapore banks. This is because the volume rate average is based on transactions during the previous day published at 9 am the next day.

Despite a shift in the market, SORA and SIBOR-pegged home loans are still available. Homeowners can still look into refinancing options both ways before the SIBOR term expires.

Related Questions

1. Which year will SORA replace SOR and SIBOR?

SORA is all set to replace SOR and SIBOR in Singapore. This will become the new interest rate benchmark from 31st December 2024. This means the discontinuation of SOR and SIBOR also happens on 31st December 2024.

2. What is the Current SIBOR Rate?

SIBOR rate is compounded to the 1-month, 3-month, and 6-month options. However, it’s worth noting that the 6-month SIBOR rate no longer applies. This is because it was discontinued as of 31st March 2022. Still, the 1-month and 3-month current SIBOR home loans interest rates are 1.66% and 1.91%, respectively, as the ABS (Association of Banks in Singapore) published.

3. Are there SIBOR-pegged loans in the market today?

Yes, there are SIBOR-pegged loans available since the phasing out takes time. The 6-month option was phased out in March 2022. The remaining 1 and 3-month options will continue until 31st December 2024 and head in the same direction as SOR.

4. What is the Difference between 3-month SORA and the 3-month SIBOR rate?

The 3-month SORA rate relies on the average rate of volume-weighted borrowing transactions in Singapore’s unsecured overnight interbank SGD money market. This is over 3 months.

On the other hand, the 3-month SIBOR rate relies on the interest rates banks plan to lend to other banks. This occurs in the unsecured Singapore Interbank Offered Rate market in 3 months.

5. Is SOR still applicable in Singapore?

Many changes are taking place in borrowing interest rate pegged loans in Singapore. A good example is the discontinuation of Swap Offer Rate SOR—Singapore no longer offers SOR-pegged loans as of April 2021.

With the increase in owning properties through the increase in interest rate and the government’s new cooling measures on acquiring properties in Singapore, understand more about the property loan tenures for private property.

young asian couple moving in new house


SORA, SIBOR, and SOR are crucial to Singaporean homeowners who want to get or have an existing property loan. The three are greatly affected by the current market in Singapore. However, it’s worth noting that SOR was discontinued in April 2021.

Key Takeaways

  • SORA home loan packages offer more stability than SIBOR and SOR hence the shift taking place in Singapore.
  • There’s less risk involved when opting to get a SORA house loan than it was with both SIBOR and SOR.
  • SIBOR-pegged loans offer fixed interest rates. This means if interest rates rise, you’re shielded. But, if they go lower, any adjustment won’t be made to your agreement.  

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