A marketing flyer circulating this month lays out a four-step chain: rates fall, more buyers qualify, demand rises, prices follow. It is a tidy argument and the last two steps are fair. The first is wrong in Singapore, and it is the step people act on.
How a Singapore bank actually sizes your loan
When a bank decides how much it will lend you, it does not use the rate on the package. It tests your ability to repay at a stress rate set by MAS, currently a floor of 4%, under the Total Debt Servicing Ratio, which caps all your monthly debt at 55% of gross income. For an HDB flat or EC the Mortgage Servicing Ratio applies as well. Loan-to-Value then caps the loan against the price. None of those three limits moves when SORA moves. A household earning $12,000 a month with no other debts qualifies today for a maximum loan of about $1,382,444 over 30 years, and it qualifies for exactly that if SORA halves tomorrow, because the test was never run at SORA.
What does move is the monthly. On that same $1,382,444 loan, the repayment at the 4% floor is $6,600, at a 2.6% package it is $5,534, and at a 1.6% two-year fixed it is $4,838. That is the real and useful effect of cheaper money: the same loan costs less to carry. It is not a bigger loan.
Where rates are, in Roov's own data
Three-month compounded SORA is 1.20% today, against 1.02% ninety days ago, so the flyer's premise of a flat, not-falling rate is broadly right. The best two-year fixed packages Roov tracks sit around 1.6%, and the monthly figures above use those. The live rates page shows the packages by loan size and the ninety-day path.
So what is the decision?
The honest version of the flyer's chain is this: if rates fall, your budget stays the same, your monthly falls, and the buyers competing with you for the same unit are a little more willing, so prices tend to firm. Waiting for cheaper money to buy the same home is therefore usually a bet on paying more for it and carrying it more cheaply, which may or may not net out in your favour, and which no flyer can decide for you. What can decide it is your own arithmetic: the affordability calculator shows the loan at the floor and the monthly at your rate side by side, without an account, and the borrowing guide explains the three limits in prose. If you already hold a loan, the question is whether to refinance, which is a different one.
Sources: the MAS stress-test floor and TDSR as read from Roov's rate table on the day of writing; SORA from MAS via Roov's daily ingest; package rates from the banks' published sheets. The flyer is a PropNex "Property Wealth Report" mailer, October issue.