First Home Buying Complete Checklist Singapore: Financing and Loan Options
Securing the right financing is the cornerstone of buying your first home in Singapore. This checklist covers essential steps for first-time buyers, including HDB loans, bank loans, CPF usage, grants, and key regulations like LTV, MSR, and TDSR. Homejourney prioritizes your safety by verifying all information to help you make confident decisions in a trusted environment.
As part of our broader First Home Buying Checklist Singapore: Step-by-Step Guide | Homejourney ">First Home Buying Checklist Singapore: Step-by-Step Guide, this focused cluster dives deep into financing tactics. Follow these actionable steps to navigate 2026 rates and avoid costly pitfalls.
Why Financing Matters for Your First Home in Singapore
Financing determines what you can afford amid rising HDB resale prices and private property costs. In 2026, first-time buyers face Buyer’s Stamp Duty (BSD) starting at 1% for properties up to S$180,000, escalating to 6% beyond S$1.5 million, plus Additional Buyer’s Stamp Duty (ABSD) exemptions for Singaporean first-timers. HDB enforces the Mortgage Servicing Ratio (MSR) at 30% of gross income for HDB flats and Total Debt Servicing Ratio (TDSR) at 55% for private properties.
Understanding these ensures you don't overextend. Homejourney's tools, like our Bank Rates ">bank rates comparison, provide real-time data for informed choices, building trust through transparency.
Step 1: Assess Your Financial Eligibility
Start with an affordability check. Calculate your maximum budget using income, CPF savings, and debts. First-time buyers must obtain an HDB Flat Eligibility (HFE) letter before any Option to Purchase (OTP). This letter confirms eligibility, grants, and HDB loan amounts.
Actionable Tip: Use Homejourney's Property Search ">property search to filter by price while inputting your income. Singles qualify for 2-room flexi flats under new HTB rules, with Enhanced CPF Housing Grant (EHG) up to S$40,000 if income is below S$4,500.
- Check CPF Ordinary Account balance – use up to available funds after leaving S$80,000+ housing reserves (age-dependent).
- Apply for HFE via HDB portal (free, valid 6 months).
- Factor in 25% Loan-to-Value (LTV) limit for first loans (75% max financing).
Insider tip: Apply early during BTO sales or resale viewings near MRT stations like Jurong East, where prices average S$500,000–S$600,000 for 4-room flats.
Step 2: Compare HDB Loan vs Bank Loan
HDB loans offer stability at 2.6% interest (pegged to CPF OA rate +0.1%), capped at 80% LTV for first-timers, but require MSR compliance. Bank loans provide lower rates (around 2–3% in 2026) and flexibility but fall under stricter TDSR.
HDB Loan vs Bank Loan: First-Time Buyer Guide | Homejourney ">HDB Loan vs Bank Loan: First-Time Buyer Guide on Homejourney breaks it down further. Banks like DBS emphasize budgeting for downpayments (25% cash + CPF) and hidden costs like valuation fees (S$200–S$500).
| Loan Type | Interest Rate (2026) | Max LTV | Best For |
|---|---|---|---|
| HDB Loan | 2.6% (fixed) | 75–80% | Risk-averse buyers |
| Bank Loan | 2–3% (variable) | 75% | Lower rates seekers |
Secure pre-approval before viewing – valid 30 days, essential for competitive resale bids.
Step 3: Maximize CPF Grants and Subsidies
First-timers can access CPF Housing Grant (CHG) up to S$80,000 for families (S$40,000 singles), EHG up to S$80,000 (income ≤S$9,000), and Proximity Housing Grant (PHG) up to S$30,000 if within 4km of parents. For BTO, see our BTO Buyer Complete Financing Guide: Homejourney Tips ">BTO Buyer Complete Financing Guide.
Documents needed: NRIC, income proof (last 3 months), CPF statements. Grants reduce cash outlay – e.g., S$500,000 resale flat could save S$100,000+ combined.
- Verify 20+ years lease remaining for EHG.
- Live with parents for max PHG (S$30,000).
- No private property ownership history.
Costs Breakdown and Hidden Fees
Total costs: 5–10% of purchase price beyond downpayment. BSD calculator on HDB site: e.g., S$500,000 flat = S$15,670 BSD. Add legal fees (S$2,000–S$3,000), valuation, and agent commission (if resale).
Hidden Costs: Renovations (S$20,000–S$50,000 for HDB), moving (S$500–S$1,500), and post-purchase maintenance like Aircon Services ">aircon servicing.
Common Financing Mistakes to Avoid
Avoid overborrowing – many ignore TDSR, leading to rejections. Read our 7 Mortgage Mistakes First-Time Buyers Make in Singapore. Don't skip pre-approval or assume all CPF is usable.
Red flags: Sellers pushing quick OTP without HFE; rates spiking post-lock-in. Improve chances via How to Improve Your Loan Approval Chances | Homejourney Guide ">How to Improve Your Loan Approval Chances.
Next Steps for Secure Financing
1. Get HFE today. 2. Compare rates on Homejourney's Bank Rates ">mortgage rates. 3. Consult HDB/Housing Board or lawyer – Homejourney verifies pros for safety. 4. Explore projects in Projects Directory ">projects directory.
Disclaimer: This is general advice; seek professional financial/legal counsel. Rates as of 2026; check HDB/URA for updates.
FAQ: First Home Buying Financing in Singapore
What is the max HDB loan for first-timers? Up to 75–80% LTV, subject to MSR (30% income). Confirm via HFE letter.
Can singles buy resale HDB with grants? Yes, up to 3-room under HTB; EHG up to S$40,000 if eligible.
HDB vs bank loan: Which is better? HDB for stability; banks for potentially lower rates. Use Homejourney tools to compare.
How much downpayment for first home? 25% (5–25% cash, rest CPF), per LTV rules.
ABSD for first-time Singaporeans? Exempt on first residential purchase.
Ready for your first home? Start with Homejourney's verified Property Search ">property search and link back to our First Home Buying Checklist Singapore: Step-by-Step Guide | Homejourney ">step-by-step pillar guide for the full journey. Trust Homejourney for safe, transparent property decisions.
