How Does a Home Loan Work in Singapore Complete: Frequently Asked Questions
A home loan in Singapore is a financing option from banks or HDB that lets you borrow to buy property, repayable over time with interest, regulated by MAS rules like TDSR and LTV limits.[1][6]
This Homejourney cluster article answers the most common questions on how does a home loan work in Singapore, building on our pillar guide How Does a Home Loan Work in Singapore: Homejourney Guide. We prioritize your safety with verified info from official sources like MAS and HDB, helping you make trusted decisions.
Home Loan Explained: Core Mortgage Basics in Singapore
In Singapore, home loan process starts with eligibility checks under MAS guidelines. Banks like DBS, OCBC, UOB assess your income, age (21-65), and credit. HDB loans suit public flats; bank loans cover private properties and ECs.[1][6]
Key rules include Loan-to-Value (LTV) up to 75-90% based on buyer status, tenure max 30-35 years, and stress tests at 3.5% interest. Use CPF for down payments after cash portion (5% min for banks).[1]
Homejourney simplifies this: View live rates from DBS, OCBC, UOB, HSBC, and more at https://www.homejourney.sg/bank-rates. Our calculator shows borrowing power instantly.
How Does Mortgage Work Singapore: Step-by-Step Process
The housing loan Singapore journey has 10 key steps. First, check eligibility via In-Principle Approval (IPA) from banks, valid 30 days, using payslips, IRAS NOA, and CPF statements.[1][2][3]
- Shortlist banks: Compare packages on Homejourney's bank rates page.
- Apply for IPA: Submit NRIC/passport, income docs (6 months payslips), takes 2-3 days.[4][5]
- Secure property: Use IPA for Option to Purchase (OTP), pay 1-5% deposit.
- Valuation: Bank orders report ($50-700 fee), loans against lower of price/valuation.[1]
- Letter of Offer (LO): Review terms, sign for formal approval.
- Legal completion: Pay stamp duties, disburse loan at key collection (8-12 weeks post-OTP).[2]
Pro tip: Use Singpass on Homejourney for auto-filled applications, speeding approvals while verifying data securely.
Singapore-Specific Rules: MSR, TDSR, and CPF Usage
MAS enforces Mortgage Servicing Ratio (MSR) for HDB (30% of income) and Total Debt Servicing Ratio (TDSR) at 55% across debts, stressed at 3.5%.[1][6]
Example: S$1.5M loan, 25 years, 4% stress rate = ~S$7,900/month. Need S$14,400+ income for TDSR.[2] HDB loans cap at 2.6% fixed; banks peg to SORA (3M/6M compounded quarterly).[1]
CPF Ordinary Account funds down payments (10% max HDB, after 5% cash for banks). Refinancing? Check via https://www.homejourney.sg/bank-rates#calculator.
Understanding SORA and Interest Rate Trends
SORA is Singapore's benchmark, replacing SOR/SIBOR. Most loans are floating, reset quarterly. Fixed packages offer 1-3 year stability.[1]
The chart below shows recent interest rate trends in Singapore:
As seen, SORA fluctuates; track live on Homejourney. Fixed vs floating? See our Home Loan Tenure: Bank Rate Comparison Guide.
HDB vs Bank Loans: Key Differences
| HDB Loan | Bank Loan | |
|---|---|---|
| Eligibility | HDB flats only, MSR | Private/EC/HDB, TDSR+MSR for HDB |
| LTV Max | 80-90% | 75-90% |
| Rate | 2.6% fixed | SORA+ peg, ~3-4% |
| Downpayment | 10-25% (CPF ok) | 5% cash + rest CPF |
Bank loans suit upgraders; apply multi-bank via Homejourney for best offers from UOB, Maybank, CIMB.[1][7]
Real Example: First-Time Buyer Scenario
Buying S$600K HDB flat? IPA shows S$480K loan (80% LTV). 20% down = S$120K (S$30K cash + CPF). Monthly at 3% over 25 years: ~S$2,270, within S$7,567 income (MSR 30%).[6]
Foreigner? 60% ABSD, stricter docs like passport/work pass.[2][3] Insider tip: Time IPA before Punggol resale viewings via https://www.homejourney.sg/search.
Frequently Asked Questions: Home Loan Singapore
Q1: How long for home loan approval?
IPA: 2-5 days; full LO post-valuation: 1-2 weeks. Use Homejourney's MyInfo for faster processing.[3][4]
Q2: Can I use CPF for everything?
No, banks require 5% cash minimum. HDB allows more CPF.[1]
Q3: What if valuation is lower?
Bank loans lower amount; top up cash difference. Always get IPA first.[1][2]
Q4: Foreigner home loan eligibility?
Yes, with work pass, payslips, overseas credit report. Higher ABSD.[2][3]
Q5: How to refinance?
Compare rates on Homejourney, apply multi-bank. See Home Loan Tenure Benefits.
Disclaimer: This is general info; consult Homejourney brokers or advisors. Rates change; verify at https://www.homejourney.sg/bank-rates.
Ready to start? Calculate eligibility and apply securely via Homejourney today. Link back to our pillar for full mortgage basics.
References
- Singapore Property Market Analysis 1 (2026)
- Singapore Property Market Analysis 6 (2026)
- Singapore Property Market Analysis 2 (2026)
- Singapore Property Market Analysis 3 (2026)
- Singapore Property Market Analysis 4 (2026)
- Singapore Property Market Analysis 5 (2026)
- Singapore Property Market Analysis 7 (2026)
