How Home Loans Work in Singapore: Complete FAQ
A home loan in Singapore finances your property purchase through banks or HDB, with repayments spread over 20-35 years using CPF or cash. Homejourney simplifies this with transparent tools like our bank rates page, ensuring user safety and trust in every step.[1][3]
This cluster article answers key 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 ">How Does a Home Loan Work in Singapore: Homejourney Guide. First-time buyers and investors get actionable insights to make confident decisions.
Home Loan Basics: Key Concepts Explained
Home loan explained: You borrow from a bank (for private properties, ECs, or HDB) or HDB (resale flats only), repaying principal plus interest monthly. Banks like DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank offer competitive packages pegged to SORA.[1][4][5]
HDB loans cap household income at S$14,000 (S$7,000 singles), while banks have flexible criteria but stricter TDSR. Use CPF Ordinary Account (OA) for downpayments and installments, but cash covers the first 5% for bank loans.[1][5]
Mortgage basics include Loan-to-Value (LTV) limits: 75-90% for first-timers, reducing with subsequent buys. Tenure maxes at 30 years (HDB) or 35 years (private), but full LTV needs ≤25/30 years.[1]
Singapore Regulations: MSR, TDSR, and LTV
Total Debt Servicing Ratio (TDSR) limits total debt (including home loan) to 55% of income at 3.5% stress rate. Mortgage Servicing Ratio (MSR) caps HDB loan repayments at 30% of gross income.[1][3]
Example: S$10,000 monthly income family. MSR allows S$3,000 loan repayment; TDSR caps total debt at S$5,500. Learn more in our LTV Ratio Singapore: Limits, Downpayment & Homejourney Benefits ">LTV guide. Always verify eligibility on Homejourney's mortgage calculator.[1]
SORA and Interest Rates in 2026
SORA (Singapore Overnight Rate Average) replaced fixed benchmarks for transparency; most loans are floating (e.g., 3M SORA + 0.6%). Rates eased in 2025-2026, but monitor trends.[4]
The chart below shows recent interest rate trends in Singapore:
As seen, SORA declined through 2025, lowering floating rates faster than fixed. Compare live rates from DBS, OCBC, UOB, HSBC, and more on Homejourney's bank rates page.[4][6]
Step-by-Step: How the Home Loan Process Works
- Get In-Principle Approval (IPA): Submit income docs (6 months payslips, IRAS NOA, CPF statements) via Singpass on Homejourney. Approval in 2-3 days; shows borrowing power.[1][2]
- Property Valuation: Bank assesses value (S$50-700 fee). Loan based on lower of purchase price or valuation.[1]
- Formal Application: Sign Option to Purchase, submit full docs. Credit check needed (BB+ score ideal).[1]
- Loan Offer: Review terms, accept. Pay stamp duties via Homejourney's verified process.[2]
- Disbursement & Repayment: Funds released at completion; auto-deduct from CPF/cash.[1]
Insider tip: Start 3 months pre-lock-in for refinancing to meet 2-month notice. Homejourney's multi-bank submission gets offers from 10+ partners instantly.[6]
HDB vs Bank Loans: Which is Right?
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Eligibility | Income ≤S$14k, MSR 30% | TDSR 55%, flexible income |
| LTV | Up to 90% first-timer | Up to 75-90% |
| Rate | 2.6% pegged | SORA-based, lower initially |
| Downpayment | 5% cash + 20% CPF/cash | 5% cash + 20% CPF/cash |
Bank loans suit private properties; HDB for resale flats. Calculate affordability on Homejourney calculator.[1][5]
Practical Tips for Approval
- Boost credit: Pay debts on time; avoid new loans pre-application.
- Max CPF: Top up OA for larger downpayment.
- Compare rates: Use Homejourney to view DBS vs OCBC instantly.
- Foreigners: Need passport, work pass, extra docs; LTV often 60-70%.[2]
- Refinance early: 3 months pre-lock-in via our brokers.[6]
Disclaimer: This is general info; consult Homejourney Mortgage Brokers or advisors. Rates as of 2026; subject to change.[3]
Frequently Asked Questions
What documents do I need for a home loan in Singapore?
Payslips (6 months), CPF statements, IRAS NOA, NRIC/passport, employment proof. Self-employed need business docs. Auto-fill via Singpass on Homejourney.[1][2]
How long for home loan approval?
IPA: 2-3 days. Full process: 2-4 weeks post-valuation.[2]
Can foreigners get home loans?
Yes, from banks like HSBC; need valid pass, stable income. Lower LTV applies.[2]
HDB or bank loan better?
HDB for stability; banks for lower initial rates. Compare on Homejourney bank rates.[5]
How to refinance?
Review 3 months pre-lock-in; submit via Homejourney for multi-bank offers.[6]
Ready to apply? Visit Homejourney bank rates for safe, verified comparisons and one-click applications. Search properties at Homejourney search. Trust Homejourney for transparent home financing.
