Best Banks for First-Time Home Buyers: Rates & Fees Explained
For first-time home buyers in Singapore, choosing the right bank can mean saving tens of thousands of dollars over your loan tenure. As of January 2026, fixed mortgage rates have dropped to historic lows between 1.45% and 1.75%, nearly half the rates from just one year ago.[1] However, the "best" bank isn't determined by rates alone—fees, features, flexibility, and customer service matter equally. This guide breaks down what first-time buyers need to know to make an informed decision.
At Homejourney, we prioritize your safety and trust by verifying information from official sources and providing transparent comparisons. Our Bank Rates page lets you compare rates from all major Singapore banks instantly and calculate your borrowing power in seconds.
Understanding Current Market Rates for First-Time Buyers
The mortgage landscape has shifted dramatically. Banks now offer rates lower than HDB's concessionary rate of 2.6%, making private bank loans increasingly attractive for first-time buyers.[2] Most competitive banks offer 2-year fixed rates between 1.48% and 1.75%, with some promotional rates as low as 1.45% for larger loan amounts.[1]
For first-time buyers, fixed-rate loans are typically recommended during the initial lock-in period (usually 2-3 years) because they provide payment certainty. After the lock-in period, loans typically convert to floating rates pegged to SORA (Singapore Overnight Rate Average) plus a spread.
The chart below shows recent interest rate trends in Singapore to help you understand how rates have moved:
As you can see, rates have stabilized at historically low levels. Market analysts expect rates to bottom around Q2 2026 before gradually rising, creating a window for first-time buyers to lock in favorable rates now.[3]
Top Banks for First-Time Home Buyers: Rates & Features
DBS Bank – Best Overall for First-Time Buyers
Current Rates (January 2026): 2-year fixed at 1.75% (minimum $500,000 loan)[1]
DBS dominates Singapore's mortgage market and offers excellent features for first-time buyers. Their POSB HDB loan carries a 1.55% fixed rate with no early repayment penalties during the lock-in period—a significant advantage for buyers who may need flexibility.[2] For private residential properties, DBS offers competitive fixed rates with the ability to switch to floating rates (3M SORA + 0.32%) anytime during the lock-in period without penalties.
Key advantages: 100% penalty waiver on sale, free conversion after 24 months, strong online banking platform, and excellent customer service reputation. DBS saw a 13-fold increase in refinancing applications in late 2025, indicating strong customer satisfaction.[2]
Who it's best for: First-time buyers purchasing HDB flats or private properties up to $1.5 million, those who value flexibility and may need to sell within the lock-in period.
OCBC Bank – Best for Long-Term Fixed Rates
Current Rates (January 2026): 2-year fixed at 1.65% (competitive spreads on longer tenures)[1]
OCBC offers particularly attractive rates for longer fixed periods (3-5 years), making them ideal for first-time buyers who want maximum payment certainty. A homeowner with a $500,000 loan can save up to $4,100 annually by switching to OCBC's five-year fixed package.[2] OCBC saw a seven-fold increase in home owner switches in the first 11 months of 2025, reflecting strong competitive positioning.
Key advantages: Competitive rates on 3-5 year fixed periods, straightforward application process, strong digital banking platform, and excellent refinancing support.
Who it's best for: First-time buyers planning to stay in their property long-term and wanting predictable payments for 5+ years.
UOB (United Overseas Bank) – Best for Flexibility
Current Rates (January 2026): Competitive 2-year fixed rates in the 1.60-1.75% range[1]
UOB offers flexible loan structures that appeal to first-time buyers with varying income stability. Their SORA-based floating rates start from 3M SORA + 0.40%, and they provide excellent refinancing options. For more details on UOB's complete offerings, see our Who Should Choose UOB Home Loan? Complete 2026 Review | Homejourney and UOB Home Loan Review: Complete Rates & Fees Explained | Homejourney 2026 .
Key advantages: Flexible loan structures, competitive floating rates, good customer service, multiple rate options.
Who it's best for: First-time buyers who may have variable income or want to switch between fixed and floating rates.
HSBC – Best for Premium Borrowers
Current Rates (January 2026): Rates as low as 1.48% for HSBC Premier customers with $1 million+ loans[4]
HSBC targets affluent first-time buyers with premium banking relationships. Their preferential rates require a total relationship balance of at least $200,000 with HSBC Premier, but qualified borrowers receive some of Singapore's lowest rates plus up to $3,500 cash incentives for refinancing.[4]
Key advantages: Lowest advertised rates for large loans, cash incentives, premium customer service, international banking benefits.
Who it's best for: First-time buyers with substantial savings/investments, those borrowing over $1 million, or those needing international banking services.
Standard Chartered & Maybank – Competitive Alternatives
Standard Chartered Rates: 2-year fixed at 1.68%[1]
Maybank Rates: 2-year fixed at 1.65%[1]
Both banks offer competitive rates and strong customer service. Standard Chartered provides excellent refinancing support, while Maybank offers attractive rates for borrowers with existing banking relationships.
Understanding Mortgage Fees for First-Time Buyers
Beyond interest rates, fees significantly impact your total borrowing cost. First-time buyers should budget for:
- Valuation Fee: $300-$600 (bank assesses property value)
- Legal Fees: $800-$1,500 (conveyancing and documentation)
- Loan Processing Fee: $0-$500 (varies by bank; some waive for competitive loans)
- Mortgage Insurance: 0.3-0.5% of loan amount (protects bank if you default)
- Stamp Duty: 0.2% of loan amount (government fee)
- Refinancing Costs: $500-$2,000 if switching banks later
For a $500,000 loan, total upfront fees typically range from $3,500-$5,500. Many banks offer fee waivers or rebates during promotional periods, so always ask about current promotions when applying.
Fixed vs. Floating Rates: Which Should First-Time Buyers Choose?
Fixed Rates (Current: 1.45-1.75% for 2 years): Your interest rate remains constant for the lock-in period (typically 2-3 years). Monthly payments are predictable, making budgeting easier. This is ideal for first-time buyers who want certainty and may be stretching their budget.
Floating Rates (Current: 3M SORA + 0.25-0.40%): Your rate fluctuates with SORA, meaning monthly payments can change. Currently, 3M SORA is approximately 1.17%, making floating rates around 1.42-1.57%—competitive with fixed rates. However, if rates rise, your payments increase.
Recommendation for first-time buyers: Start with a 2-3 year fixed rate to establish payment certainty while learning about homeownership costs. After the lock-in period, you can reassess and potentially switch to floating rates if SORA trends favorably. Use Homejourney's Bank Rates page to track live SORA rates and time your decisions perfectly.
How to Choose the Best Bank: A Step-by-Step Framework
Step 1: Calculate Your Borrowing Power
First-time buyers can borrow up to 75% of the property price (or 80% for HDB flats). Your maximum loan is also limited by Total Debt Service Ratio (TDSR) rules—your total monthly debt shouldn't exceed 60% of gross income. Use Homejourney's mortgage eligibility calculator at Bank Rates to instantly see how much you can borrow from each bank.
Step 2: Compare Rates Across All Banks
Don't settle for the first quote. Rates vary significantly based on loan amount, property type, and your banking relationship. On Homejourney's Bank Rates page, you can compare current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and other major lenders in one place.
Step 3: Evaluate Total Cost, Not Just Interest Rate
A 0.1% lower rate saves only $500 annually on a $500,000 loan. But fee waivers, cash rebates, and penalty-free switches could save more. Calculate the total cost including fees over your expected holding period.
Step 4: Consider Non-Rate Factors
Evaluate customer service reputation, online banking quality, flexibility to refinance, and the ability to switch between fixed and floating rates. Read reviews from other first-time buyers to understand the application experience.
Step 5: Apply Through Homejourney
Instead of visiting each bank separately, submit one application through Homejourney's Bank Rates page. Banks will compete for your business, and you'll receive the best offers from all major lenders. Use Singpass/MyInfo to auto-fill your application in seconds for faster approval.
Special Considerations for First-Time HDB Buyers
First-time buyers purchasing HDB flats have unique options. HDB offers a concessionary loan rate fixed at 2.6%, but this requires meeting income and ownership restrictions.[1] However, private bank loans now offer better rates (1.55-1.75%), and you're not locked into HDB's rate.
First-time HDB buyers may also qualify for grants: singles aged 35+ with income below $4,500 can receive $2,500-$40,000, while couples/families buying resale flats can get $40,000-$50,000.[1] These grants reduce your loan amount, so calculate your net borrowing need before comparing bank rates.
Red Flags and What to Avoid
- Rates that seem too good to be true: Extremely low advertised rates often come with high spreads after the promotional period. Always ask about the full rate structure.
- Hidden fees: Ensure all fees (valuation, legal, processing) are disclosed upfront. Homejourney's transparent approach ensures you see the complete picture.
- Inflexible lock-in periods: Avoid banks with penalties for early repayment or refinancing. DBS and OCBC offer penalty waivers on sale, which is valuable.
- Poor customer service during application: If a bank is slow or unresponsive during the application process, they may be worse during refinancing. Homejourney connects you with responsive lenders.
FAQ: Common Questions from First-Time Home Buyers
Q: Should I lock in a fixed rate now or wait for rates to drop further?
A: Market analysts expect rates to bottom around Q2 2026 before rising gradually.[3] If you're ready to buy now and rates fit your budget, locking in current rates (1.45-1.75%) is prudent. Waiting for marginal improvements risks missing the opportunity if rates rise. Use Homejourney's rate tracking to monitor SORA trends and time your decision.
Q: What's the difference between 3M SORA and 1M SORA?
A: 3M SORA (3-month average) and 1M SORA (1-month average) are benchmarks that floating rates are pegged to. 3M SORA is more stable but typically higher; 1M SORA is more volatile but often lower. Most banks offer 3M SORA for residential loans. Currently, 3M SORA is around 1.17%, while promotional 1M SORA spreads start from +0.25-0.30%.[1]
Q: Can I switch banks after taking a loan?
A: Yes, but typically only after the lock-in period ends (usually 2-3 years). Switching before incurs penalties. After lock-in, you can refinance to another bank without penalties at most major lenders. Homejourney's refinancing guide simplifies this process and helps you compare new offers from all banks.
