7 Common Mortgage Mistakes First-Time Buyers Make in Singapore | Homejourney

First-time home buyers in Singapore often fall into common mortgage mistakes like ignoring TDSR limits or skipping loan pre-approvals, leading to rejected applications or financial stress. This Homejourney cluster article breaks down these pitfalls with actionable steps, helping you secure a safe single buyer home loan or single income mortgage while prioritizing trust and transparency.

This focused guide supports our pillar content on First-Time Home Buyer Singapore: 2026 Mortgage Guide, offering tactical advice for singles property Singapore and solo home purchase scenarios.

Why Mortgage Mistakes Hit First-Time Buyers Hardest

Singapore's strict regulations like Total Debt Servicing Ratio (TDSR) at 55% of gross income and Mortgage Servicing Ratio (MSR) for HDB at 30% make mortgages unforgiving for errors[1][2]. First-timers, especially unmarried buyer loans, underestimate costs beyond the purchase price, such as Buyer’s Stamp Duty (BSD) up to 6% or Additional Buyer’s Stamp Duty (ABSD) for non-first properties.

At Homejourney, we verify data from MAS and HDB sources to ensure you avoid these traps. Use our bank rates page to compare DBS, OCBC, UOB, HSBC, and more instantly.

Mistake 1: Ignoring Loan Eligibility and TDSR/MSR Rules

Many assume banks lend whatever they need, but TDSR caps total debt at 55% of income, including credit cards[1][2]. For a $5,000 monthly income, max housing debt is $2,750—yet buyers eye $800,000 loans without checking.

Actionable Fix:

• Get Approval-in-Principle (AIP) first via Homejourney's mortgage calculator.
• Factor existing debts; e.g., a $300 car loan reduces housing eligibility by $165 monthly.
• Singles: Note single income mortgage limits—use our Singpass integration for instant CPF/income verification.

Avoid this by starting on Homejourney bank-rates.

Mistake 2: Overstretching on Monthly Instalments

Borrowing the max leaves no buffer for rate hikes or emergencies. With 3M SORA at ~3% in 2026, a $600,000 loan at 30-year tenure means ~$2,500/month—stretching a $6,000 income family thin[2].

Actionable Fix: Borrow conservatively; aim for housing under 25-30% of income. Test scenarios on Homejourney's calculator.

Understanding SORA and Current Rates

SORA (Singapore Overnight Rate Average) replaced SOR as the key benchmark for floating loans, with banks referencing 3M or 6M compounds. Fixed rates from DBS or UOB offer stability but higher initial costs.

The chart below shows recent interest rate trends in Singapore:

As seen, SORA fluctuated 2.8-3.2% recently—track live on Homejourney for unmarried buyer loan timing.

Mistake 3: Choosing the Wrong Loan Type (HDB vs Bank)

First-timers pick bank loans for lower rates (~0.5-1% below HDB's 2.6%) without noting bank loans' floating risks or stricter TDSR[2]. HDB suits conservative singles property Singapore buyers with 90% LTV.

Actionable Fix: Compare via HDB vs Bank Loan Guide. Apply multi-bank on Homejourney for offers from 10+ partners.

Mistake 4: Forgetting Hidden Costs Like Renovations

Purchase price blinds buyers to $30,000-$80,000 reno for a 4-room HDB in Punggol[1]. Add BSD ($10,000+ on $500,000 flat) and legal fees ($2,000-$3,000).

Actionable Fix:

1. Budget 10-15% extra for reno/furnishing.
2. Quote contractors early; e.g., kitchen revamp $15,000.
3. Post-purchase, check aircon services for maintenance.

Mistake 5: Skipping Pre-Approval and Rushing Due to FOMO

No IPA leads to OTP losses; FOMO from BTO launches pushes hasty bids[1][2].

Actionable Fix: Secure IPA via Homejourney's one-click multi-bank submission using Singpass—get DBS/OCBC quotes fast.

Mistake 6: Overlooking MOP and Exit Strategy

HDB's 5-year MOP locks resale; poor location hurts future value[2].

Actionable Fix: Check URA Master Plan for MRT/upgrades. Search budgets on Homejourney property search.

Mistake 7: Going Solo Without Guidance

Navigating MAS rules alone risks errors[1].

Actionable Fix: Connect with Homejourney Mortgage Brokers via bank-rates for personalized advice.

FAQ: Common Mortgage Questions for First-Time Buyers

Q1: Can singles get a full home loan in Singapore?
A: Yes, single buyer home loan eligibility applies under TDSR; max LTV 75% for bank loans. Calculate on Homejourney[2].

Q2: HDB loan or bank for first-timers?
A: HDB for stability (2.6% fixed); banks for savings if risk-tolerant. Compare on our bank rates page.

Q3: How to improve single income mortgage chances?
A: Reduce debts, boost savings. See Improve Loan Approval Guide.

Q4: What's the impact of SORA hikes?
A: +0.5% on $500,000 loan adds ~$200/month. Track via our chart.

Q5: ABSD for solo unmarried buyer loan?
A: First property exempt; second 17%. Verify eligibility on Homejourney.

Disclaimer: This is general advice; consult professionals for personalized guidance. Homejourney verifies data for your safety.

Steer clear of common mortgage mistakes first time buyers make—start with Homejourney's bank rates and pillar guide for a trusted journey.

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 2 (2026)