With the economy's direction, what's best if we need to take a bank home loan - fixed, 3m SORA, or hybrid mortgage plans, and why?

As per title, everyone is aware that interest rates are moving upwards. The question is where we think it'll stop, and what are home owners who are looking to get a new loan (or refinance) to do? Any advice from the gurus here very welcome.

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As someone who isn't terribly math-inclined, I am finding it dizziying to decide and understand what's what and where's where with the market.

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For example, fixed is at about 2.75% (and likely to climb again soon), a 3M SORA with 0.7% spread is at around 1.5%, and a blend (such as from DBS, using a 50-50 split between fixed and floating) sits around 1.7%. We'll use those numbers and see what I think, for gurus to respond to please.

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Blended approach (i.e. DBS/UOB 50% of loan is paid in fixed rate, 50% takes a 3M SORA rate)

I don't understand enough to know if a blended approach is better - because the way I see it, I pay "more" now with the fixed rate (since it's so much higher) but "save" later if rates climb. However, the blended rate pays lower now, but will ask for their pound of flesh when SORA rises later. So, all in all, it feels like a better hedge bet. But is it?

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Pros: It seems to help hedge against any changes to SORA and fixed rates if they go significantly higher

Cons: It's unclear if the "savings" you get from having some of the loan in fixed rates outweigh the cost in the long run.

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3M SORA approach (1 or 2yr lockin)

I have also read some viewpoints that suggest that 3M SORA lags far enough behind that if we were to take a 1yr or 2yr lockin for this, it is unlikely to go beyond 2.5 to 3% at worst. However, 3M SORA has climbed from 0.1 to 0.8 in the span of 6 months this year. We're not sure how to read future trends based off of this and past analysis of trend cycles.

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Pros: Continue to enjoy lower interest rates. "For now". How long now is, anyone's guess?

If we take a 1yr lockin, we can look around at the market again in a year's time.

Cons: If rates continue to spike after the 1 or 2yr lockin, we will be locked in and may be losing out if it goes higher than the current fixed rate.

Also, by the end of 1 or 2 years, if the rates remain elevated, I would be in a worse position then when I refinance?

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Fixed approach (at 2.65% to 2.75% as of time of writing)

Nothing much to say, it's fixed rate.

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Pros: Locking in a rate for 2years (no more 5yr loans). If rates go siginificantly higher, we "save" on the mortage interest fees

Cons: You pay "more" interest fees from the start, since 3M SORA is still much lower than the fixed rates are at right now. Does this "more" offset the "savings" if rates go up?

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With all that in mind, what's a young couple to do? Any help welcome please.

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