How Does a Home Loan Work in Singapore: Homejourney Complete Guide
This is the definitive, step-by-step guide to understanding how a home loan works in Singapore. Whether you're a first-time buyer, HDB upgrader, or investor, Homejourney demystifies the home loan process, from eligibility checks to repayment, with Singapore-specific rules like TDSR, MSR, and CPF usage. Backed by official HDB and MAS regulations, this pillar covers everything to help you secure financing safely and confidently through Homejourney's trusted tools.
Homejourney prioritizes your safety with verified bank rates, instant eligibility calculators, and multi-bank applications via Singpass. Start by comparing rates from DBS, OCBC, UOB, and more at Homejourney's bank rates page.
Table of Contents
- Introduction to Home Loans in Singapore
- Mortgage Basics: Key Terms Explained
- HDB Loan vs Bank Loan: Which is Right for You?
- Home Loan Eligibility Criteria
- LTV, TDSR, and MSR Limits
- Understanding Interest Rates and SORA
- The Complete Home Loan Application Process
- Using CPF for Downpayment and Repayments
- Hidden Costs and Fees
- Refinancing Your Home Loan
- Tools and Calculators on Homejourney
- FAQ: Common Home Loan Questions
- Next Steps with Homejourney
Introduction to Home Loans in Singapore
A home loan, also known as a housing loan Singapore or mortgage, is financing from HDB or banks to buy property. In Singapore's tight market, understanding how does mortgage work Singapore is crucial as 80% of residents own homes, per HDB data. First-time buyers face HDB flats at S$400,000-S$800,000, while condos start at S$1.2 million.
Homejourney simplifies this with real-time tools. Our platform verifies data from MAS and HDB, ensuring trust. Unlike risky sources, we connect you directly to partners like DBS, OCBC, and UOB for secure applications.
Why This Guide Matters
Singapore's rules like 3.5% stress test for TDSR protect buyers but limit borrowing. This guide provides insider tips, like timing applications before BTO ballot results, to maximize approval odds. Always consult professionals; this is educational only.
Mortgage Basics: Key Terms Explained
A home loan explained: You borrow principal (e.g., S$500,000) repaid over tenure (20-30 years) with interest. Monthly installments cover principal + interest (amortizing loan).
- Principal: Amount borrowed.
- Interest Rate: Cost of borrowing, now SORA-based at ~3% p.a.
- Tenure: Repayment period; longer lowers monthly but raises total cost.
- Fixed vs Floating: Fixed locks rate 2-3 years; floating follows SORA.
Example: S$500,000 loan at 3% over 25 years = ~S$2,370/month. Use Homejourney's mortgage calculator for precise figures.
HDB Loan vs Bank Loan: Which is Right for You?
HDB loans suit resale flats/BTO; banks for private properties, ECs, or better rates. HDB rate is stable 2.6% (CPF OA +0.1%), while banks offer ~1.35%-3.5% SORA-pegged.
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| LTV (First Property) | 90% | 75% |
| Interest Rate | 2.6% fixed | SORA + margin (~3%) |
| MSR/TDSR | MSR 30% | TDSR 55% |
| Eligibility | Income <S$14k, SC family | Credit score BB+, income proof |
Choose banks for rates below 2.6%; check Homejourney's bank rates for live comparisons from UOB, HSBC, etc.[1][2]
Home Loan Eligibility Criteria
Age: 21-65 at end of tenure. Income: 6 months payslips or IRAS NOA for self-employed. Credit: BB+ score minimum; bankruptcy wait 5-7 years.[1]
Foreigners: Up to 75% LTV first property. Documents: NRIC, payslips, CPF statements, Option to Purchase. Homejourney's Singpass integration auto-fills these for faster IPA.
Insider Tip
Apply via Homejourney to multiple banks (DBS, OCBC, Standard Chartered) with one form—boosts offers and approval rates.
LTV, TDSR, and MSR Limits
Loan-to-Value (LTV): Max borrow % of price/valuation. First property: 75% bank, 90% HDB. Second: 45%.[6] See LTV Ratio Guide.
TDSR (55%): Total debt (loans, cards) <55% income at 3.5% stress rate.[1]
MSR (30%): HDB loan repayments <30% gross income.
- Example: S$10,000 income, TDSR allows S$5,500 debt at 3.5%.
Understanding Interest Rates and SORA
SORA (Singapore Overnight Rate Average) replaced SOR/FIXED; 3M SORA ~3%, 6M ~3.1%. Banks add 0.5%-1% margin. Fixed rates 2-3 years, then revert.[4]
The chart below shows recent interest rate trends in Singapore:
As seen, rates stabilized post-2024 hikes. Track live on Homejourney bank rates. Top 2026 rates from S$500k: ~1.35% promo.[4]
The Complete Home Loan Application Process
- IPA: Get In-Principle Approval (2-3 days).[1]
- Valuation: S$50-S$700 fee.
- LO: Letter of Offer; accept within days.
- Legal Completion: Funds disbursed at 14-day/3-month completion.
- Repayment: Auto-debit; CPF setup optional.
Homejourney streamlines: Apply via Singpass at bank-rates, get multi-bank LO in days.
Using CPF for Downpayment and Repayments
CPF OA for downpayment: HDB up to 10% total (5% cash min banks). Repayments from CPF + accrued interest to OA. Grants like CPF Housing Grant up to S$80,000 for families.[2]
Pro tip: Maximize CPF for tax relief up to S$8,000/year.
Hidden Costs and Fees
- Valuation: S$200 avg.
- Legal fees: S$2,000-S$5,000.
- Stamp Duty: ABSD 0-65% (first SC buyer 0%).
- Processing: S$200-S$500.
Total extras ~5% purchase price. Budget via Homejourney calculator.
Refinancing Your Home Loan
Refinance post-lock-in (2-3 years) or rate drop. 2-month notice; costs S$2,000-S$4,000. Best 3 months pre-expiry.[4] Homejourney simplifies multi-bank comparison.
Tools and Calculators on Homejourney
Use our eligibility calculator: Input income S$8,000, get max loan ~S$600,000. Compare DBS (1.4%), OCBC (1.5%). Safe, verified data only.
FAQ: Common Home Loan Questions
What is the current HDB loan rate?
2.6% pegged to CPF OA +0.1%, stable for decades.[2]
How much downpayment for first HDB flat?
10%, 5% cash min for banks; full CPF for HDB.[1]
Can foreigners get home loans?
Yes, up to 75% LTV first property.[3]
What documents for loan application?
Payslips, NRIC, CPF, Option to Purchase.[3]
HDB or bank loan better?
HDB for stability; banks for lower rates. Compare on Homejourney.
What if I miss repayments?
Late fees; MAS monitors TDSR breaches. Build buffer.
How to refinance?
Check rates 3 months pre-lock-in expiry via Homejourney.
Next Steps with Homejourney
Ready? Visit Homejourney bank-rates for rates, calculator, and Singpass applications. Search properties at property search within budget. Our brokers guide safely—trust verified, feedback-driven service. Start your secure journey today.
Disclaimer: Rates change; not financial advice. Verify with banks/HDB. Updated Jan 2026.
