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

First-time buyers in Singapore often fall into common mortgage mistakes like ignoring TDSR limits or skipping pre-approvals, leading to rejected loans or financial stress. This guide highlights these pitfalls with actionable steps, helping young couples, married couples, and BTO loan couples secure their first home safely through Homejourney's trusted tools.

As part of our pillar content on BTO Buyer Complete Financing Guide, this cluster focuses on mortgage-specific errors. Homejourney prioritizes your safety with verified bank rates and Singpass-enabled applications at https://www.homejourney.sg/bank-rates.

Why Mortgage Mistakes Hurt First-Time Buyers

Singapore's strict rules like TDSR (55% debt-to-income cap) and MSR (30% for HDB) make home loans complex[1][2]. Young couples home loans or newlyweds property purchases fail when buyers overlook these, facing loan rejections or overborrowing. In 2026, with SORA rates fluctuating, these errors amplify risks amid high HDB prices around S$500,000 for 4-room flats[1].

Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator lets you test scenarios instantly, ensuring couple first home plans stay within safe limits.

Mistake 1: Ignoring Loan Eligibility and TDSR/MSR Rules

Many assume banks lend what they need, but TDSR caps total debt at 55% of income, MSR at 30% for HDB[1][2]. A couple earning S$8,000 monthly might qualify for S$600,000 but get denied if car loans push TDSR over.

Actionable Fix:

1. Get HDB or bank Approval-in-Principle (AIP) early via Homejourney's multi-bank tool.
2. Factor CPF Ordinary Account (OA) usage: Up to 80% for HDB downpayment.
3. Use our calculator to simulate: Input income, debts, see max loan.

Avoid this by comparing DBS, OCBC, UOB rates on Homejourney first[1].

Mistake 2: Overstretching Monthly Instalments

Buyers max out loans, leaving no buffer for rate hikes or kids' costs. At 3% SORA, a S$500,000 loan means S$2,100/month, but 4% jumps it to S$2,380[2].

Singapore Tip: HDB loans (2.6% fixed) suit conservative couples, bank loans (SORA+1%) riskier but cheaper long-term[2].

Understanding SORA and Rate Trends

SORA (Singapore Overnight Rate Average) replaced SOR as the key benchmark for floating loans. Most banks peg to 3M SORA (around 3.0% in early 2026) plus 0.8-1.2% margin.

The chart below shows recent interest rate trends in Singapore:

As seen, SORA peaked at 3.2% last quarter but eased—track live on Homejourney to time fixed-to-floating switches.

Fix: Borrow 20% below max. For married couple mortgages, aim instalments under 25% income.

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

First-timers pick bank loans for lower initial rates without assessing stability. HDB loans have no TDSR but cap at 75% LTV; banks offer 80% for ECs but floating risks[1][2]. See our HDB vs Bank Loan Guide.

Decision Framework:

• Stable job? Bank loan (save 0.5-1% over 25 years).
• Risk-averse? HDB loan for BTO loan couples.
• Compare: DBS 3M SORA+0.95%, OCBC fixed 3.2% via Homejourney.

Submit one app to all partners (HSBC, Maybank, CIMB) for best offers.

Mistake 4: Forgetting Hidden Costs

Beyond loan: BSD (1-4% tiered), ABSD (5% for first-timers post-Feb 2023 cooling), legal fees (S$2,000-4,000), reno (S$30k-80k)[1]. A S$550k BTO adds S$20k+ upfront.

Budget Checklist:

• Downpayment: 20% cash/CPF mix.
• Stamp duties via HDB calculator.
• Buffer 3-6 months instalments.

Use Homejourney's tools to search affordable properties at https://www.homejourney.sg/search.

Mistake 5: Skipping Pre-Approval and Rushing FOMO Buys

No AIP leads to OTP losses. FOMO from "rising prices" prompts hasty bids[1].

Steps:

1. Apply AIP on Homejourney with Singpass—auto-fills income/CPF.
2. View 5-10 units; check via projects directory.
3. Negotiate post-AIP for leverage.

Boost approval odds: See How to Improve Loan Chances.

Mistake 6: Overlooking MOP and Exit Strategy

HDB MOP (5 years) blocks resale; ignore future rental demand[2]. For young couples, pick near MRT/schools.

Tip: Factor URA master plan for appreciation.

Mistake 7: No Professional Guidance

Solo navigation misses deals. Homejourney connects to brokers for DBS-UOB comparisons, refinancing[1].

Disclaimer: This is educational; consult professionals. Rates as of Jan 2026; MAS-regulated[2].

FAQ: Common Mortgage Questions for First-Time Buyers

Can young couples home loan exceed TDSR?
No, capped at 55%. Use Homejourney calculator for married couple mortgage simulations.

HDB or bank for BTO loan couples?
HDB for safety; bank for savings. Compare at https://www.homejourney.sg/bank-rates.

How much downpayment for couple first home?
5-25% based on LTV; CPF covers most. Check eligibility instantly.

Refinance if rates drop?
Yes, after 2-3 years. Homejourney simplifies multi-bank process.

ABSD for newlyweds property?
First-timers exempt; verify via HDB.

Secure your future with Homejourney—compare rates, calculate eligibility, and apply safely today at https://www.homejourney.sg/bank-rates. For full financing, read our BTO Financing Pillar. Your trusted partner for transparent property journeys.

References

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