Getting a Mortgage After Bankruptcy: Rates & Fees Explained | Homejourney

Getting a mortgage after bankruptcy in Singapore is possible, but you should expect stricter approval criteria, higher interest margins, and additional fees compared to a standard borrower. With careful planning, transparent disclosure, and the right bank strategy, many discharged bankrupts are still able to secure a home loan and gradually normalise their mortgage costs over time.

This article is a focused follow-up to Homejourney’s main guide, Mortgage After Bankruptcy in Singapore: Homejourney Expert Guide 2026 Mortgage After Bankruptcy in Singapore: Homejourney Expert Guide 2026 . Here, we zoom in specifically on "Getting a Mortgage After Bankruptcy – Rates and Fees Explained", so you understand exactly what you are paying, why banks price you differently, and how to reduce your cost of borrowing safely.

What changes after bankruptcy: how banks see your risk

When you apply for a post-bankruptcy mortgage in Singapore, banks look at two things more closely than anything else: your repayment track record since discharge, and your current debt level relative to income (TDSR and MSR rules set by MAS).

From my experience speaking with borrowers in neighbourhoods like Sengkang and Yishun, the turning point is usually 2–4 years after discharge, once there is a clean record of prompt payments on things like telco bills, credit cards (if any), and utilities. Before that, many banks’ credit teams will either decline outright or impose higher interest margins.

Key ways banks assess a discharged bankrupt home loan application:

Time since discharge – many banks are more open after at least 3 years of clean history, though some private banks may insist on 5 years or more.
Current income stability – length of employment, CPF contributions pattern, variable vs fixed income.
Debt service ratios – MAS Total Debt Servicing Ratio (TDSR) and, for HDB properties, Mortgage Servicing Ratio (MSR) limits.
Existing debts – personal loans, car loans, renovation loans, outstanding tax or maintenance obligations.
Security and loan size – type of property (HDB vs private), property value, and loan-to-value (LTV) requested.

Because bankruptcy is a red flag on past credit behaviour, banks compensate with pricing: slightly higher interest rates and/or tighter LTV. Understanding how this translates into rates and fees is crucial before you commit.

Typical interest rate range for a mortgage after bankruptcy (2026)

As of early 2026, Singapore home loan rates are at multi‑year lows after a sharp drop in global interest rates. Fixed packages for standard borrowers are in the region of about 1.4% to 1.8% per annum, with floating loans tied to 3M SORA around 1.2% plus bank spread.[1][3]

For a discharged bankrupt home loan, banks may load an additional margin on top of what a "clean" borrower gets. In practice, most borrowers I’ve seen fall into roughly these bands (ranges are indicative, not offers):

Fixed-rate packages: about 0.20–0.60 percentage points above mainstream fixed packages for the same bank and tenure.
Floating SORA packages: higher credit spread, for example 3M SORA + (0.80–1.10%) instead of +0.50–0.80% for a clean profile.
Board rate loans: some banks may push you to their internal board-rate packages, which can be less transparent but give the bank flexibility to reprice.

In concrete numbers, if standard 3‑year fixed packages are 1.60% p.a., a post‑bankruptcy mortgage offer could come in around 1.80–2.10% p.a. The exact number depends on your profile, the bank, and whether you are taking other products (e.g. salary crediting, insurance, investment accounts).

Homejourney’s bank rates comparison tool at Bank Rates lets you compare live offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and more in one place, then discuss with our mortgage brokers how your past bankruptcy may affect the actual rate you receive.

Understanding SORA and how it affects post-bankruptcy pricing

Most new floating‑rate home loans in Singapore are pegged to the Singapore Overnight Rate Average (SORA), a volume‑weighted measure of interbank funding costs administered by MAS. Banks then add a "spread" to SORA to arrive at your effective mortgage rate.

For example, if 3M SORA is 1.21% and your bank offers 3M SORA + 0.90% for a post‑bankruptcy mortgage, your initial rate will be 2.11% p.a. If SORA falls further, your rate will adjust; if SORA rises, your monthly instalment will increase accordingly.[3]

The chart below shows recent interest rate trends in Singapore:

Use this as a guide, not a prediction – MAS and local banks regularly caution borrowers that interest rates move in cycles, and you should choose packages based on your own risk tolerance and financial buffer, not just today’s low numbers.[1][4]

Key fees you must watch when you’re a higher‑risk borrower

The "headline" interest rate is only half the story. When you’re getting a mortgage after bankruptcy, the fee structure can make a big difference to your real cost over 3–5 years.

1. Legal and valuation fees

For a typical HDB flat in Punggol or Tampines with a S$400,000 loan, legal fees usually range from about S$2,000–S$2,500, and valuation fees from about S$150–S$300, depending on the firm and complexity. For private condos in areas like Sengkang or Woodlands with S$800,000–S$1 million loans, legal might be closer to S$2,500–S$3,000.

Many banks provide legal subsidies for refinancing (for example, S$2,000–S$2,800 for loans above S$500,000) that can offset most of this cost.[2] However, if you are a higher‑risk profile, the bank may:

Reduce the subsidy amount; or
Offer the same subsidy but tie it to a longer lock‑in period.

Always clarify how much of your upfront cost is really out‑of‑pocket, and whether subsidy clawbacks apply if you refinance or sell early.

2. Lock‑in period and early redemption penalties

Most Singapore home loans impose a 1.5% penalty on the outstanding loan amount if you redeem the loan within the lock‑in period due to sale of the property or refinancing to another bank.[2] For a S$600,000 loan, that’s a S$9,000 hit – painful if you are still rebuilding your finances after bankruptcy.

Insider tip: if you expect to sell soon (for example, upgrading from a 4‑room HDB in Sembawang to an EC in Punggol once finances settle), ask your banker or Homejourney broker to prioritise packages that:

Have no lock‑in; or
Include a waiver of penalty on sale but keep the penalty for refinancing.

Some banks are more flexible on this than others, especially if they see strong income recovery and a low LTV.

3. Cancellation fees on undisbursed loan amounts

For properties under construction (BUC), banks charge a 1% cancellation fee on the undisbursed portion if you cancel or refinance before full drawdown, subject to a minimum fee (commonly S$1,000).[2] This applies even if you are forced to sell at TOP due to personal circumstances.

If you are a discharged bankrupt buying a new launch condo, be extra conservative: you do not want to be stuck with both higher interest margins and unavoidable cancellation penalties later. Consider whether a completed resale unit might be safer initially – you get full drawdown from day one and better refinancing flexibility.

4. Admin, repricing and other bank charges

Beyond the big fees, ask for a detailed fee schedule covering:

Repricing or conversion fees if you switch packages within the same bank.
Partial prepayment penalties (some loans allow a certain percentage each year without fee).
Late payment charges.

For a borrower rebuilding credit, late payment charges are doubly dangerous: they cost money and may affect how the bank views you if you request repricing or top‑up later.

How much more will you pay? A simple worked example

Consider two borrowers taking the same S$500,000 loan over 25 years for an HDB resale flat near Jurong East MRT:

Borrower A (clean profile): fixed rate 1.60% p.a. for 3 years.
Borrower B (discharged bankrupt): fixed rate 1.95% p.a. for 3 years.

Approximate monthly instalments (principal + interest):

Borrower A at 1.60%: around S$2,010 per month.
Borrower B at 1.95%: around S$2,110 per month.

The difference of about S$100 per month may seem manageable, but over the 3‑year lock‑in that’s roughly S$3,600 extra. If you also face reduced subsidies or a longer lock‑in, the total cost gap widens.

This is why Homejourney strongly encourages detailed scenario planning using our mortgage calculator at Mortgage Rates and the affordability tools on before you sign – especially if you have a history of financial distress.

Strategies to reduce rates and fees after bankruptcy

While you cannot erase your bankruptcy record, you can shape how banks view you today. Practical steps I’ve seen work for real borrowers include:

1. Strengthen your profile before applying

Build a clean 24–36‑month record of on‑time payments for all bills.
Reduce non‑mortgage debt aggressively – clear personal loans and credit lines before applying.
Stabilise employment – a consistent CPF contribution history with the same employer helps a lot.
Save for a bigger downpayment – a lower LTV means lower risk for the bank, which can support better pricing.

If you work near Raffles Place or Changi Business Park, for instance, and have only been in your current job for 6 months, it may be worth waiting another year if you can continue renting in areas like Hougang or Clementi while rebuilding your profile.

2. Consider joint borrowers to boost approval odds

A common path is to take a joint home loan with a spouse or close family member who has a clean credit history and stable income. This does not erase your past bankruptcy, but it spreads risk and can:

Improve your overall TDSR and MSR position.
Allow the bank to price closer to normal packages.
Support a larger loan quantum if needed.

Homejourney has detailed guides on joint applications and bank rate comparisons you can read here:

3. Use Homejourney to let banks compete for your profile

Different banks view bankruptcy history differently. One lender might decline; another may approve at a small premium over market rate. Through Bank Rates , you can:

Compare real‑time rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and others.
Calculate your borrowing power with our mortgage eligibility calculator.
Submit a single application and receive responses from multiple banks without repeating paperwork.
Use Singpass/MyInfo to auto‑fill details, reducing errors that might otherwise worry credit teams.

Our Homejourney mortgage brokers specialise in "special scenarios" like bankruptcy, decoupling and complex income cases. You can also explore related reads on decoupling and approval strategies:

Choosing the right property type and budget after bankruptcy

To keep your post‑bankruptcy mortgage sustainable, align property choice with realistic monthly affordability, not just maximum bank approval. In practical terms:

For a household income of S$7,000, a safe mortgage is often in the S$1,500–S$2,000 monthly range, depending on other commitments.
This might correspond to a loan size of about S$350,000–S$450,000 at current rates, enough for many 4‑room HDB flats in areas like Bukit Panjang, Yishun, or Jurong West.
If you’re eyeing a S$1.1 million mass‑market condo in Sengkang, ensure both income stability and emergency savings are strong before stretching.

Use Homejourney’s property search