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

Common mortgage mistakes first-time buyers make include overborrowing under TDSR limits, skipping pre-approvals, and ignoring hidden costs like maintenance fees.

These errors can lead to financial strain in Singapore's strict lending environment regulated by MAS. Homejourney helps you avoid them with transparent tools like our bank rates comparison, ensuring safe, verified decisions for young couples home loan seekers and couples first home buyers.

Why Avoiding Mortgage Mistakes Matters for Singapore First-Time Buyers

Singapore's property market demands precision due to TDSR (55% income cap on all debts) and MSR (30% for HDB loans).[1][2] First-time buyers, especially newlyweds property purchasers or BTO loan couples, often overlook these, risking rejected applications or unaffordable repayments.

Homejourney prioritizes your safety by verifying bank data from DBS, OCBC, UOB, and more. This cluster focuses on tactical fixes, linking to our pillar HDB Loan vs Bank Loan: First-Time Buyer Guide for full coverage. Start with our mortgage calculator to test scenarios safely.

Mistake 1: Skipping In-Principle Approval (IPA)

Many rush into Option to Purchase (OTP) without IPA, only to find they can't borrow enough.[2] For a $1M condo, IPA reveals your exact limit under 75% LTV for first properties.[1]

Actionable Fix:

Apply for IPA via Homejourney's bank-rates page using Singpass for instant eligibility.
Compare offers from HSBC, Standard Chartered, Maybank instantly.
Secure IPA before viewing properties on Homejourney property search.

This strengthens negotiations and avoids commitment regrets for married couple mortgage applicants.

Mistake 2: Maximizing Loan Eligibility Without a Buffer

Borrowing the max under TDSR leaves no room for rate hikes or job changes. A couple earning $10,000/month might qualify for $800,000 but face $4,000+ repayments at 3.5% over 25 years, consuming 40% income plus buffers.[1][2]

Solution: Borrow 20-25% less. Use Homejourney's calculator: For $9,873 monthly income, max obligations hit $5,430 including taxes/insurance.[1]

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

First-timers pick bank loans for lower rates but ignore HDB's 90% LTV stability.[1][2] Bank loans cap at 55-75% LTV, demanding 25% down ($250,000 cash/CPF on $1M condo).[1]

HDB suits BTO loan couples under income ceilings; banks fit high-earners. HDB Loan vs Bank Loan: First-Time Buyer Guide | Homejourney ">Read our HDB vs Bank Loan guide.

The chart below shows recent interest rate trends in Singapore:

SORA rates fluctuate; HDB's fixed 2.6% (as of 2026) offers predictability over bank SORA-pegged loans.[2]

Mistake 4: Ignoring Hidden Costs and CPF Rules

Buyers forget 15-25% extra monthly costs: $200 property tax, $80 insurance, $1,000+ maintenance for condos.[1] CPF Ordinary Account use has limits post-minimum sum.

Singapore-Specific Tip: For resale HDB, factor ABSD (0% first-time SC) and 5% cash down. Total for $600,000 BTO: $30,000 cash + CPF.

Budget 25-30% income for all housing costs.
Use Homejourney to verify via multi-bank comparison.

Mistake 5: Overlooking TDSR/MSR and Lease Decay

TDSR applies to all loans (55%); MSR to HDB/EC (30%).[1][2] Leasehold flats with <60 years left restrict financing, hiking down payments.

Example: 70-year lease resale needs loan to age 95 check. Avoid by selecting MOP-complied HDB (5 years min).[2]

Mistake 6: Not Comparing Bank Rates or Lock-In Periods

Sticking to one bank misses deals. DBS/OCBC fixed rates vs UOB floating differ by 0.2-0.5%.[2]

Action Steps:

Visit Homejourney bank rates for CIMB, RHB, Public Bank comparisons.
Apply multi-bank with one Singpass click.
Lock 2-3 year fixed if SORA rises (see chart).

Mistake 7: Emotional Buying Without Long-Term Planning

Near-work choices ignore job shifts; max budget ignores family growth.[2] For young couples home loan, plan 5+ year horizon.

Link to Young Couples Home Loan Guide Singapore | Homejourney ">Young Couples Home Loan Guide for tailored advice.

Homejourney's Safe Mortgage Checklist

Protect your future:

Get IPA via Homejourney.
Calculate affordability with our tool.
Compare 10+ banks (HSBC to Hong Leong).
Budget buffers + hidden costs.
Consult our mortgage brokers post-application.

Disclaimer: This is general info; seek professional advice. Rates as of 2026; verify via official HDB/MAS sources.

FAQ: Common Mortgage Questions for First-Time Buyers

What is TDSR and how does it affect my loan?
TDSR limits total debt to 55% income, including mortgages/credit cards.[1][2] Example: $10,000 income = $5,500 max debt.

HDB loan or bank loan for BTO?
HDB for stability (90% LTV, 2.6% fixed); bank for rates if over ceiling. Use our calculator.

Can young couples use CPF for down payment?
Yes, after 5% cash; OA balance post-minimum sum. Check via Singpass on Homejourney.

How to refinance safely?
Compare via Homejourney; apply multi-bank. See pillar for details.

What's the down payment for first condo?
25%: 5% cash, 20% CPF. $1M = $250,000 total.[1]

Avoid common mortgage mistakes first time buyers make with Homejourney's trusted tools. Start safely at bank-rates or explore properties on property search. For full guidance, read our pillar HDB Loan vs Bank Loan: First-Time Buyer Guide | Homejourney ">HDB Loan vs Bank Loan Guide.