How Does a Home Loan Work in Singapore Complete: Bank Rate Comparison Guide
A home loan in Singapore, also known as a housing loan or mortgage, is financing from banks or HDB that lets you buy property by paying a downpayment upfront and repaying the rest over 20-35 years with interest.
Homejourney makes this home loan process safe and transparent by comparing real-time rates from DBS, OCBC, UOB, and more, so you get the best deal without hassle.
This cluster article dives into how does mortgage work Singapore, focusing on bank comparisons for first-time buyers and refinancers. For the full pillar overview, see our How Does a Home Loan Work in Singapore: Homejourney Guide ">How Does a Home Loan Work in Singapore: Homejourney Guide.
Home Loan Basics: Mortgage Explained for Singapore Buyers
Singapore's housing loan Singapore system follows strict rules from the Monetary Authority of Singapore (MAS). Key limits include Loan-to-Value (LTV) ratio up to 75-90% based on property type and buyer status, Total Debt Servicing Ratio (TDSR) capping repayments at 55% of income using a 3.5% stress rate, and Mortgage Servicing Ratio (MSR) at 30% for HDB flats.
Banks like DBS, OCBC, and UOB offer loans for HDB, private properties, and ECs (after MOP). HDB loans are fixed at 2.6% but capped for households earning ≤S$14,000 monthly. Bank loans use SORA (Singapore Overnight Rate Average) pegs, typically 0.6-1.2% spread over 3M/6M SORA.
As of 2026, SORA has stabilized post-2025 declines, making floating rates attractive. Use Homejourney's mortgage eligibility calculator to check your borrowing power instantly.
Step-by-Step: How the Home Loan Process Works
The home loan explained process takes 2-4 weeks. Here's the actionable timeline:
- Get In-Principle Approval (IPA): Submit income docs (6 months payslips, IRAS NOA) via Singpass on Homejourney. Approval in 2-3 days shows max loan amount.
- Property Valuation: Bank assesses value (S$50-700 fee). Loan based on lower of purchase price or valuation.
- Formal Application: Provide sale agreement, credit report (BB+ score needed). Multi-bank submit on Homejourney bank-rates lets offers compete.
- Legal Completion: Sign loan docs, pay downpayment (5% cash minimum for banks, CPF for rest).
- Disbursement: Funds released at key collection. Start monthly repayments via GIRO.
Pro tip: Foreigners need extra docs like passports and work permits; banks apply stricter KYC. Homejourney verifies your eligibility safely, prioritizing user trust.
Understanding SORA and Current Interest Rate Trends
SORA is the key benchmark for mortgage basics in Singapore, replacing fixed rates for transparency. Most loans are SORA PEAKS (projection average) + spread. In 2026, 3M SORA hovers ~2.8-3.2%, making effective rates 3.4-4.4%.
The chart below shows recent interest rate trends in Singapore:
As seen, rates dipped in late 2025 but stabilized. Fixed-rate packages (1-3% initial) suit risk-averse buyers, but floating saves long-term if SORA stays low. Track live rates on Homejourney.
Singapore Bank Rate Comparison: Top Lenders 2026
Compare bank rates across Homejourney partners. Rates as of Feb 2026 (subject to change; verify on site). Best for HDB upgraders eyeing private condos in areas like Punggol or Tengah.
| Bank | Best Package | Effective Rate (3M SORA + Spread) | Lock-in | Best For |
|---|---|---|---|---|
| DBS | SORA PEAKS | 3.45% (2.95% SORA + 0.50%) | 2 yrs | First-time HDB buyers |
| OCBC | Fixed 2.5% 3yr | 2.80% effective | 3 yrs | Refinancers |
| UOB | SORA + 0.55% | 3.50% | 2 yrs | Private property |
| HSBC | SORA PEAKS | 3.40% | 1 yr | Expats |
| Standard Chartered | Fixed 2.68% 2yr | 2.90% | 2 yrs | Low risk |
| Maybank | SORA + 0.60% | 3.55% | 3 yrs | Investors |
| CIMB | SORA Base | 3.60% | 2 yrs | Competitive spreads |
| RHB | Fixed 2.75% 2yr | 3.00% | 2 yrs | Short lock-in |
| Public Bank | SORA + 0.65% | 3.60% | 3 yrs | EC buyers |
| Hong Leong | SORA PEAKS | 3.42% | 2 yrs | Flexible tenure |
| Citibank | Fixed 2.60% 1yr | 2.85% | 1 yr | Short-term |
OCBC leads fixed rates; DBS for volume discounts. Compare instantly on Homejourney bank-rates – one platform, all banks.
Pros, Cons & Who Each Bank Suits
- DBS: Pros: Fast approval, app integration. Cons: Higher penalties. Best for HDB in heartlands like Bedok.
- OCBC: Pros: Low fixed rates. Cons: Strict credit. Ideal for upgraders to Yishun BTO.
- UOB: Pros: Flexible for privates. Cons: Slower processing. Suits condos in Orchard.
- HSBC/StanChart: Pros: Expat-friendly. Cons: Higher foreigner spreads.
- Others like Maybank/CIMB: Value for investors; check Improve Home Loan Approval Chances in Singapore: Homejourney Tips ">approval tips.
Refinance 3 months pre-lock-in expiry. Homejourney's multi-bank system lets banks bid for you.
Actionable Tips for Best Rates & Approval
1. Boost TDSR: Pay debts first.
2. Use CPF OA for downpayment post-5% cash.
3. Time with SORA dips via Homejourney tracker.
4. Apply via Singpass on our site for speed.
5. Pair with property search on Homejourney search for budget fits.
Disclaimer: Rates fluctuate; not financial advice. Consult Homejourney brokers for personalized guidance.
Frequently Asked Questions (FAQ)
How long for home loan approval in Singapore?
In-Principle: 2-3 days. Full: 2-4 weeks.[1][2]
What's the minimum downpayment for bank loans?
5% cash + rest CPF/cash; LTV max 75%.[1]
Can foreigners get home loans?
Yes, up to 60% LTV with extra docs.[2]
HDB vs bank loan: Which is better?
HDB for stability (2.6%); banks for lower rates now.[5]
How to compare bank rates safely?
Use Homejourney for verified, real-time comparisons.
Ready to secure your dream home? Compare rates and apply now on Homejourney bank-rates – safe, trusted, user-first. Link back to our pillar for LTV details: LTV Ratio Singapore: Limits, Downpayment & Homejourney Benefits ">LTV Ratio Guide.
