How to Improve Your Loan Approval Chances in Singapore | Homejourney

To improve your loan approval chances in Singapore, you must match how banks assess risk: clean up your credit record, keep your Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) within MAS limits, prepare complete documents, choose the right property and loan structure, and apply strategically through a trusted platform like Homejourney that helps you compare bank rates, calculate eligibility, and submit one multi-bank application safely.[7][1]

This cluster guide sits under Homejourney’s main mortgage pillar, where we cover the full home loan journey from A to Z. Here, we zoom in specifically on how to avoid first buyer mistakes, mortgage traps, and costly home loan errors that cause rejections, especially for first-time buyers, HDB upgraders, and investors.

How Singapore Banks Decide If Your Loan Gets Approved

In Singapore, all banks must follow MAS rules on home lending, especially Loan-to-Value (LTV) limits, TDSR, and MSR.[7][1] Beyond regulations, each bank (DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and others) has its own internal risk policies, income requirements, and minimum loan sizes.[1][3][8]

In practice, when you submit a home loan application, banks usually look at:

Credit history (CBS credit score, past late payments, defaults)[1][4]
Income strength (fixed vs variable income, length of employment, minimum income)[1][4]
Debt ratios: TDSR (max 55–60% of gross income depending on current MAS rules) and MSR (30% cap for HDB/EC)[7][1]
Age & tenure: loan plus age usually capped so repayment ends by around 65, and max tenure often 30–35 years[1]
Property type & valuation: HDB vs private, lease remaining, location, condition, valuation vs purchase price[1]
Citizenship / residency: Singaporean, PR, or foreigner (different LTV and stamp duty rules)

Banks then decide if they will:

Approve the full amount you requested
Approve a lower amount or shorter tenure
Reject the application altogether

Homejourney’s mortgage eligibility calculator at Bank Rates mirrors this process, so you can estimate your borrowing power safely before you even pay an Option Fee.

Step-by-Step: How to Improve Your Loan Approval Chances

The safest way to avoid new buyer pitfalls and mortgage mistakes is to follow a clear, Singapore-specific sequence before you sign any Option to Purchase (OTP).

Step 1: Fix First Buyer Mistakes Around Budget & Affordability

Many rejections come from buyers choosing a property first and only checking loan eligibility after paying an OTP fee – a classic first buyer mistake we see often in estates like Punggol and Sengkang, where newer resale HDB prices can easily exceed S$650,000–S$800,000 for 4-room flats near MRT.

Before you view units in Tampines, Queenstown, or Bukit Panjang, do this:

Use Homejourney’s eligibility calculator at Bank Rates to estimate your maximum loan, monthly instalment, and downpayment based on your income, age, and debts.
Check HDB or bank loan type if you’re buying HDB. HDB loans have their own income caps (e.g. S$14,000 household income ceiling for families, S$7,000 for singles at the time of writing) and 80% LTV.[6]
Model conservative scenarios – assume slightly higher interest rates and shorter tenure. Homejourney lets you tweak SORA and fixed rates to see stress scenarios.

Insider tip from experience: if your budget is tight in mature estates like Toa Payoh or Tiong Bahru, consider fringe blocks that are a 10–12 minute walk from MRT instead of 3–5 minutes. Valuations can be lower, which keeps your loan quantum and TDSR healthier.

Step 2: Strengthen Your Credit Profile Months Before Applying

Your credit score is one of the most important approval factors in Singapore.[1][4] Banks pull your credit report from Credit Bureau Singapore and look for late payments, defaults, and how much of your credit limit you use.

To improve your chances:

Clear overdue credit cards and personal loans at least 3–6 months before you apply.[1][4]
Keep utilisation low – aim to use below 30% of your total card limits.
Avoid applying for multiple new credit lines (cards, BNPL, personal loans) right before a home loan. Too many recent enquiries are a red flag.
Set GIROs for recurring bills (SP Group, telco, town council) to prevent accidental late payments that hurt your score.

If you know you had late payments in the past (quite common among younger buyers in areas like Woodlands or Jurong West), bring proof that the accounts are now up to date. A stable recent record can still lead to approval, especially when you apply via Homejourney and we help you position your profile correctly.

Step 3: Manage Your TDSR and MSR Carefully

MAS caps how much of your monthly income can go into debt repayments via Total Debt Servicing Ratio (TDSR), and for HDB/EC, Mortgage Servicing Ratio (MSR).[7][1]

TDSR: All monthly debt obligations – car loans, student loans, credit cards (usually 3–5% of limit assumed), personal loans, plus the new home instalment – cannot exceed the regulatory TDSR limit as a percentage of your gross income.[7][1]
MSR: For HDB and EC, your monthly mortgage instalment cannot exceed 30% of gross monthly income.[1][7]

Ways to improve approval odds:

Pay down or clear high-instalment loans (car loans, personal loans) before applying – this can dramatically improve TDSR.
Consolidate small debts if sensible, or negotiate lower limits on unused credit cards.
Add a co-borrower (spouse or family member) to increase combined income if they have a clean credit profile.
Consider a slightly longer tenure to reduce monthly instalments and improve MSR/TDSR, within the maximum tenure rules.[1]

Homejourney’s calculator at Mortgage Rates helps you see instantly how paying off, say, a S$800/month car loan can increase your property budget by tens or even hundreds of thousands of dollars.

Interest Rates, SORA and Why They Matter for Approval

While most buyers focus on fixed vs floating and current interest levels, banks also stress-test your affordability at a higher rate than the package headline rate. For example, a SORA-pegged loan from DBS or UOB might be advertised at a certain spread, but the bank may assess your TDSR assuming a higher notional rate to ensure you can cope with future increases.[7][1][6]

Homejourney tracks real-time SORA and package rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and others at Bank Rates , so you get a realistic view of what monthly instalments and stress-tested amounts may look like.

The chart below shows recent interest rate trends in Singapore:

By observing trends, you can decide whether to lock in a fixed rate or accept a floating SORA package, balancing approval likelihood with long-term risk. Banks may be slightly more conservative during volatile periods, so a lower requested LTV (e.g. more cash/CPF downpayment) can boost your chances.

Documentation Checklist: What Banks Expect to See

Missing or messy documents are one of the most common and avoidable mortgage mistakes to avoid. Most banks in Singapore require similar sets of documents, with minor variations.[1][3][2][4]