7 Common Mortgage Mistakes First-Time Buyers Make in Singapore

First-time home buyers in Singapore often fall into predictable mortgage traps that lead to financial stress, higher costs, or missed opportunities. These common mortgage mistakes first time buyers make include ignoring TDSR limits, choosing the wrong loan type, and depleting savings on down payments. Homejourney helps you avoid them with transparent tools like our bank rates comparison, ensuring a safe path to homeownership.[1]

This cluster article dives into tactical advice for Singapore's unique market, from HDB flats in Punggol to private condos in Orchard. It builds on our pillar guide, HDB Loan vs Bank Loan: First-Time Buyer Guide, by focusing on pitfalls and fixes. With MAS regulations like TDSR at 55% and MSR at 30%, understanding these errors is crucial for singles on a single income mortgage or unmarried buyer loans.[1][3]

Mistake 1: Not Calculating Your True Borrowing Power with TDSR and MSR

Many first-timers overestimate what they can borrow, ignoring the Total Debt Servicing Ratio (TDSR) capped at 55% of gross income and Mortgage Servicing Ratio (MSR) at 30% for HDB buyers. For example, a single buyer earning $6,000 monthly might think they can afford a $800,000 HDB resale flat, but TDSR limits total debt payments—including credit cards—to $3,300. This leaves less for the mortgage than expected.[1]

Actionable Fix: Use Homejourney's free mortgage eligibility calculator at https://www.homejourney.sg/bank-rates#calculator. Input your income, debts, and CPF to get an instant limit. Singles pursuing a single buyer home loan in areas like Tengah should factor in solo finances early.Single Buyer Home Loan Singapore: Complete Guide | Homejourney

Mistake 2: Choosing HDB Loan vs Bank Loan Without Comparing Rates

First-timers often default to the HDB concessionary loan at 2.6% without checking bank loans, which can dip to 1.3%-1.5% fixed rates in 2026. Bank loans from DBS, OCBC, or UOB offer flexibility but higher fees; HDB loans are safer for risk-averse first time buyers. A $500,000 loan at 2.6% vs 1.5% saves $700 monthly.[1][3]

The chart below shows recent interest rate trends in Singapore:

As seen in the chart, SORA-based floating rates have stabilized around 1.5% post-2025 hikes, making short-term fixed bank loans attractive. Compare live rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, and Citibank on Homejourney's bank rates page. For singles property Singapore buyers, bank loans suit higher-value resale flats.[3]

Mistake 3: Wiping Out Savings on the Down Payment

HDB requires 25% down (75% max loan), with 5% cash minimum; private properties demand 25% total, first 5% cash. Young buyers in Yishun HDBs often empty accounts for a $100,000 down payment on a $500,000 flat, leaving no buffer for job loss or renovations ($30,000-$50,000 typical).[1]

Insider Tip: Keep 6 months' expenses ($18,000 for $3,000/month lifestyle) post-down payment. Homejourney verifies your affordability via Singpass/MyInfo integration for precise solo home purchase planning. Check resale flats within budget on our property search.[1]

Mistake 4: Ignoring Hidden Costs Beyond the Mortgage

Buyers forget option fees ($1,000-$5,000), stamp duties (up to 4% for first properties), lawyer fees ($2,000+), fire insurance ($20-$50/month), and HDB conservancy ($50-$100/month). A $600,000 Punggol BTO adds $10,000+ upfront, pushing total costs 5-10% over loan estimates.[1]

Buyer's Stamp Duty: 1% on first $180,000, 2% on next $180,000.
Fire Insurance: Mandatory for HDB, schemes from $200/year.
Renovation Loans: Avoid stacking with mortgage; cap at 10% of property value.

Budget 3-5% extra. Homejourney's checklist in our First Home Buying Checklist: Financing & Loans covers this.[1]

Mistake 5: Overlooking Minimum Occupancy Period (MOP) Impacts

All HDB flats have 5-year MOP; ECs 5 years before privatizing. Buyers planning overseas work or quick flips get stuck, unable to sell or rent. A 28-year-old buying in Woodlands might face career changes mid-MOP, locking equity.[1][2]

Singapore-Specific Fix: Factor MOP into 5-10 year plans. For BTO queues (3-5 years), align with life goals. See our BTO Buyer Complete Financing Guide for timelines.[1]

Mistake 6: Picking Fixed vs Floating Without Risk Assessment

Risk-averse singles opt for fixed rates (1.3%-1.5% 2-year lock-in) but face 1.5% penalties if selling early. Floating SORA suits optimists betting on rate cuts. First-timers fixate on low initial payments, ignoring repricing needs.[3]

Assess stability: Tight cashflow? Go 2-year fixed.
Track SORA via Homejourney.
Reprice every 2 years post-lock-in.

Apply to multiple banks via Homejourney for best offers—DBS to Citibank in one go with Singpass.[3]

Mistake 7: Not Preparing for Financial Instability

Retrenchment hits hard under TDSR; families bail out buyers. A $4,000 earner with $2,200 mortgage has no room if income drops 20%.[1][2]

Pro Tip: Stress-test at 20% income cut. Build emergency funds first. Homejourney connects you to mortgage brokers for personalized advice, prioritizing your safety.

FAQ: Common Mortgage Questions for First-Time Buyers

Q: Can singles get a home loan in Singapore?
A: Yes, single buyer home loan options exist for HDB from age 35 or private properties earlier. Use our calculator for single income mortgage limits.Single Buyer Home Loan Singapore: Complete Guide | Homejourney

Q: HDB loan or bank loan for first-timers?
A: HDB at 2.6% for safety; banks lower but volatile. Compare on Homejourney bank rates.[1][3]

Q: What's the cash down payment for HDB?
A: Minimum 5% for first properties; use CPF for rest. Avoid depleting savings.[1]

Q: How does TDSR affect me?
A: Caps total debt at 55% income. Test on Homejourney.[1]

Q: Best for solo home purchase?
A: Start with eligibility check, then multi-bank apply via Homejourney for unmarried buyer loan options.

Disclaimer: This is general advice. Consult professionals for personalized guidance. Rates as of Feb 2026; verify current data.

Steer clear of these common mortgage mistakes first time buyers make with Homejourney's trusted tools. Calculate eligibility, compare DBS to Citibank rates, and apply securely today at https://www.homejourney.sg/bank-rates. For full coverage, read our pillar guide on HDB vs bank loans. Your safe home journey starts here.