SORA vs SIBOR vs SOR Rates

Whether you’re a first-time buyer or existing home owner, you might come across acronyms such as SORA, SIBOR or SOR as you begin exploring potential home loan options. What do these terms stand for, how they are related to home loans, and how they will affect your purchase decisions? These acronyms represent industry-wide benchmark interest rates used to determine the various types of home loans in the market. First, let’s understand how they work, how they’re different, and compare their historical rates. From there, you’ll get a clearer understanding of how they affect your mortgage.

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What's The SORA, SIBOR And SOR Historical Data?

Previously, banks pegged their floating-rate home loans to Swap Offer Rate (SOR) and Singapore Interbank Offered Rate (SIBOR).


But from 2021 onwards, banks will have to switch SIBOR and SOR loans over to the new benchmark, Singapore Overnight Rate Average (SORA), to comply with Monetary Authority of Singapore (MAS) regulations.


Determined by the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore, SORA is a more legitimate benchmark compared to SIBOR and SOR. The latter have been tainted by scandal and fraudulent manipulation.


While SIBOR is based on how and what future rates which banks plan to borrow at, SOR (another interbank lending rate) was based on the exchange rate between USD and SGD, which make SIBOR and SOR more volatile than SORA. SORA generally swings less than SOR but more than SIBOR, however, given market uncertainties, SIBOR was lower than SOR during certain periods, and there were also moments when SOR took over SIBOR.

SORA Rates Guide 2021

Find out everything about the newly introduced MAS SORA rate. Learn the differences between SORA, SIBOR and SOR and how it affects your home loans.

What Are SORA, SIBOR and SOR?

Singapore Overnight Rate Average (SORA)

SORA is the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market made between 8am and 6.15pm in Singapore. As of mid-2021, the major banks in Singapore are beginning to roll out SORA-pegged home loans, although the variety is somewhat limited compared to SIBOR-linked home loans.

Singapore Interbank Offered Rate (SIBOR)

SIBOR is derived as the average rate at which Singapore banks loan from one another. Currently, it is still widely used to price derivatives, corporate loans to small and medium-sized enterprises, government and corporate bonds, as well as housing loans.

Singapore Dollar Swap Offer Rate (SOR)

On the other hand, SOR was used to price commercial loans and bonds to large institutions with hedging requirements. Unlike SIBOR, SOR was based on the cost of borrowing in USD before converting to SGD. Thus, it is also affected by currency exchange fluctuations. To have a better understanding of these two benchmarks, you can refer to our SIBOR vs SOR Historical Rate Chart.

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Compare SORA vs SIBOR vs SOR

If you’re in the market for a housing loan or a corporate loan, it helps to know how SORA, SIBOR and SOR may affect your financial decisions. Here’s an overview of the similarities and differences between these 3 interest rate benchmarks.

Interest rate benchmarkDefinitionAdministered byCalculationType of rateTypes of loan
Singapore Overnight Rate Average (SORA)Volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market made between 8am and 6.15pm.

Monetary Authority of Singapore (MAS)

SORA rates are published daily at 9am on the MAS website.

MAS to validate and calculate the rates reported by banks to derive the backward-looking overnight rates.Floating interest rate. It’s based on yesterday’s actual interbank lending transactions.
  • Commercial loans
  • Home loans
Singapore Interbank Offered Rate (SIBOR)Daily reference rate based on the interest rates at which banks offer to lend to other banks in the unsecured interbank market.

Association of Banks in Singapore (ABS)

SIBOR rates are published 7 days later on the ABS website.

ABS to compile and rank the forward-looking rates from the top 20 banks. The top and bottom quartiles are removed before the final rate is derived - the average of the rates offered by the 10 remaining banks.Floating interest rate. It’s based on a poll of rate forecasts by the ABS’ 20 member banks.
  • Derivatives
  • Corporate loans
  • Government bonds
  • Home loans
Singapore Dollar Swap Offer Rate (SOR)Volume-weighted average rate of transactions borrowed in USD converted to SGD, computed using the USD LIBOR.

Association of Banks in Singapore (ABS)

SIBOR rates are published 7 days later on the ABS website.

ABS to use USD LIBOR as an input to derive the volume-weighted average rate of transactions borrowed in USD converted to SGD.Floating interest rate. It’s based on the foreign exchange rate with the US dollar.
  • Derivatives
  • Commercial loans

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How do SORA or SIBOR home loans work?

SORA rates are considered backwards-looking overnight rates based on the average rate of all actual interbank lending transactions, unlike SIBOR rates which are forward-looking term rates that are subjected to higher market volatility due to the future rates which banks plan to borrow at. Thus, SORA offers more stability and transparency.


By now you should understand what SORA, SIBOR and SOR mean as finance terms, but how do they actually impact your home loan?


Let’s use an example to illustrate. We’ll assume that you and your partner are keen on taking up a SORA-pegged $500,000 loan with a tenure of 25 years for a resale HDB flat.


At the time when you’re ready to take up the loan with DBS, the 3-month Compounded SORA rate offered is 0.1332% (as of 8 July 2021). 


As its name suggests, the 3-month SORA rate is updated every 3 months on MAS website, so your home loan package will update every 3 months as well.


On top of the 3-month SORA rate, DBS also charges a mark-up, which we call a “spread”. Those 2 components form the total interest rate, and is what determines your monthly payments. 


DBS’ spread = 1.20%.

3-month Compounded SORA = 0.1332%

Total interest for the month:

0.1332% (3M Compounded SORA) + 1.20% (bank’s spread) = approx. 1.34%


DBS’ current spread is at 1.20% for the first 2 years, so your monthly payment will be $1,962.31, with a total interest paid of $88,693.84. 


This home loan has a lock-in period of 2 years, so from Year 3 onwards, you can choose to continue with DBS (if they are still offering a favourable interest rate), or refinance to a more competitive home loan package.


When compared to SIBOR and SOR, the 3-month Compounded SORA seems like a lower-risk option too as it does not rely on the foreign exchange rate with the US dollar, thus, it is not directly affected by the US economy.  


In summary, SORA seems to be more predictable and will make it easier for you to gauge how much to pay for monthly instalments, whether it’s a commercial, corporate or home loan. If you’re keen to know how the 3 rates may affect your home loans, find out more in our blog article- SIBOR, SORA and SOR Rates Explained.

Frequently Asked Questions

When will SORA replace SIBOR?

SORA will replace SIBOR as the new interest rate benchmark in about 3 years’ time, by the end of 2024.

Is SOR discontinued?

Yes, as of April 2021, banks have ceased to issue SOR-pegged loans and securities that mature after end-2021.

Do SIBOR-pegged loans still exist?

Yes. The transition from SIBOR to SORA will take place in gradual phases over 3 years from 2021.

When is the most current SORA rate published?

The most current 1-month, 3-month and 6-month Compounded SORA overnight rates are published daily at 9am on the Monetary Authority of Singapore (MAS) website.

What is the current SIBOR rate?

The 1-month, 3-month and 6-month Compounded SIBOR rates are currently at 0.26571% p.a., 0.43214% p.a., and 0.59107% p.a. respectively (last published on the Association of Banks in Singapore (ABS) website on 1 July 2021).

What is the difference between 3M SORA and 3M SIBOR rate?

The 3-month SORA rate is determined by the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore over the recent past 3 months, while the 3-month SIBOR is based on the interest rates at which banks plan to lend to other banks in the unsecured interbank market (how and what future rates which banks plan to borrow at) in the coming 3 months.

How is SIBOR derived?

The forward-looking rates from the top 20 banks are compiled and ranked by ABS, before the top and bottom quartiles are removed. Then, the final rate is derived - the average of the rates offered by the 10 remaining banks.

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