How Home Loans Work in Singapore: 2026 Bank Rates Comparison Guide

A home loan in Singapore, also known as a housing loan or mortgage, is financing from a bank to purchase HDB flats or private properties, repayable over 25-35 years with monthly installments covering principal and interest. At Homejourney, we prioritize your safety by verifying real-time rates from partners like DBS, OCBC, and UOB, helping you compare and apply securely in one place.

This cluster article breaks down how does a home loan work in Singapore complete: bank rate comparison guide, focusing on actionable steps for first-time buyers and refinancers. It links to our pillar guide, How Does a Home Loan Work in Singapore: Homejourney Guide, for full mortgage basics.

Home Loan Basics: Key Singapore Regulations

The Monetary Authority of Singapore (MAS) sets strict rules for housing loans, including Loan-to-Value (LTV) limits up to 75% for first-time buyers on properties under 30-year tenure, dropping to 55% if extended beyond age 65[6]. Total Debt Servicing Ratio (TDSR) caps monthly repayments at 55% of gross income, stress-tested at 4% interest[1].

For HDB flats, Loan Equity Conventionalisation (LEC) or HDB loans apply, but bank loans offer flexibility for private properties. Minimum age is 21, maximum repayment age 65. Use CPF Ordinary Account for down payments (up to 10% for HDB, 5% cash minimum for banks)[3].

Insider tip: First-time buyers in areas like Punggol or Tengah can leverage Proximity Housing Grants up to S$30,000 if buying near parents, boosting affordability.

How the Home Loan Process Works: Step-by-Step

The home loan process starts with In-Principle Approval (IPA), processed in 2-5 days, confirming borrowing power[1][2]. Submit via Singpass on Homejourney for auto-fill—faster and safer.

Check Eligibility: Use Homejourney's calculator at https://www.homejourney.sg/bank-rates#calculator for TDSR/LTV simulation.
Get IPA: Upload payslips, IRAS NOA, employment letter[1][5].
Secure OTP: Pay 1% option fee after IPA[1].
Valuation & LO: Bank values property; sign Letter of Offer[1].
Completion: 8-12 weeks post-OTP; bank disburses funds[1].

Refinancing follows similar steps but compares existing vs new rates. Homejourney lets banks compete for your business with one multi-bank application.

Understanding Interest Rates: SORA and Rate Types

Most Singapore home loans peg to SORA (Singapore Overnight Rate Average), a floating benchmark replacing SOR since 2024, plus a bank spread (e.g., 0.5-1%). Fixed rates offer 1-3 year stability; board rates tie to bank costs[2].

The chart below shows recent interest rate trends in Singapore:

As seen, 3M SORA hovered around 3.0-3.5% in late 2025, influencing effective rates of 3.5-4.5%. Lock-in periods (2-5 years) have penalties of 1.5% on prepayment.

2026 Bank Rate Comparison: Top Homejourney Partners

Compare live rates on https://www.homejourney.sg/bank-rates. Rates as of Jan 2026 (subject to change; verify on Homejourney):

Bank	SORA PEAK (3M + Spread)	Fixed 2-Year	Min Loan	Best For
DBS	3M SORA + 0.65% (~3.95%)	3.88%	S$100k	HDB buyers
OCBC	3M SORA + 0.60% (~3.90%)	3.85%	S$200k	Refinancers
UOB	3M SORA + 0.70% (~4.00%)	3.92%	S$450k[4]	Private properties
HSBC	3M SORA + 0.55% (~3.85%)	3.80%	S$500k	Expats
Standard Chartered	3M SORA + 0.75% (~4.05%)	3.95%	S$200k	Investors

Maybank, CIMB, RHB, Public Bank, Hong Leong, Citibank offer competitive spreads (0.5-0.9%); compare all on Homejourney. Example: S$1.5M loan (25 years, 3.9% rate) = ~S$7,900/month[1].

Pros, Cons & Who Each Bank Suits

DBS: Pros: Fast Singpass approval, HDB expertise. Cons: Higher fees. Best for families in Yishun-Toa Payoh.
OCBC: Pros: Low fixed rates, MyInfo integration[7]. Cons: Stricter credit. Best for upgraders.
UOB: Pros: High-loan promos[4]. Cons: Min S$450k. Best for condos in Orchard.
HSBC/StanChart: Pros: Expat-friendly. Cons: Higher spreads. Best for foreigners (60% ABSD note[2]).

Read How to Improve Home Loan Approval Chances for tips.

Actionable Tips: Secure the Best Home Loan

1. Time applications when SORA dips (track on Homejourney). 2. Compare via bank-rates; apply multi-bank for best offers. 3. Maintain debt under 40% pre-TDSR. 4. Use CPF wisely—insider tip: Top up OA before buying for grants.

Disclaimer: Rates fluctuate; Homejourney verifies data but consult professionals. Not financial advice.

Frequently Asked Questions (FAQ)

How does mortgage work Singapore for first-timers?
First, get IPA, then OTP. LTV 75%, use calculator for S$1.2M HDB affordability.

What documents for housing loan Singapore?
Payslips (3-6 months), IRAS NOA, employment letter, passport[1][5]. Singpass simplifies on Homejourney.

Best bank for home loan 2026?
Depends: OCBC for low rates, DBS for speed. Compare all at Homejourney bank-rates.

Can foreigners get home loans?
Yes, 75% LTV but 60% ABSD[2]. HSBC excels here.

How to refinance home loan Singapore?
Compare rates on Homejourney, check 6-month notice. Link to Home Loan Tenure Guide.

Ready to buy safely? Search properties at https://www.homejourney.sg/search within your budget, compare rates, and apply via Homejourney for trusted, verified loans. Visit our pillar guide for more: How Does a Home Loan Work in Singapore.