Income Requirements for Home Loans: Boost Approval with Homejourney

Income Requirements for Home Loans: How to Improve Approval Chances

If you meet Singapore’s income requirement for a home loan, keep your debt levels low and prepare your documents properly, you can significantly improve your approval chances – especially when you combine this with Homejourney’s mortgage eligibility calculator, multi-bank application and verified advice.

This cluster article focuses specifically on income requirement home loan rules, minimum salary for mortgage approval, and how borrowers with self-employed or variable income can improve their approval chances. For a full breakdown of all eligibility rules (TDSR, LTV, credit score, loan types), refer to our main pillar guide: Income Requirements for Home Loans in Singapore: Homejourney’s Definitive Guide Income Requirements for Home Loans in Singapore: Homejourney’s Definitive Guide .

Key Income Rules Banks Use in Singapore

In Singapore, banks and HDB do not just look at your salary figure – they assess your income eligibility using several regulatory frameworks: minimum income, Total Debt Servicing Ratio (TDSR), Mortgage Servicing Ratio (MSR for HDB/EC), and internal bank policies.

1. Minimum salary for mortgage approval

Most banks in Singapore require a minimum annual income of around S$24,000 for a single borrower, and about S$36,000 for joint borrowers for many types of loans, including home loans.[1] This works out to roughly S$2,000–S$3,000 per month.

Individual banks also impose minimum loan quantum rather than just income floors. For example, OCBC lists a minimum home loan amount of S$200,000 for HDB flats and S$300,000 for private properties.[7] UOB has minimum loan sizes from S$450,000 onwards for certain refinance packages.[4] These minimum sizes indirectly raise the practical income needed to qualify.

From lived experience working with buyers in Bedok, Punggol and Jurong West, borrowers trying to finance a mass-market condo or newer 4-room HDB in mature estates often need a combined income of at least S$6,000–S$8,000 to comfortably pass both TDSR and MSR, especially when they already have car loans or personal loans.

2. TDSR: How much of your income can go to all debts

MAS caps the Total Debt Servicing Ratio (TDSR) at 55% of your gross monthly income for all property loans.[6] This means total monthly debt repayments – including home loans, car loans, student loans, credit cards and personal loans – cannot exceed 55% of your income.[6]

For example, if your combined household income is S$8,000 and you already pay S$1,200 per month on a car loan and S$300 on credit cards, your maximum property loan instalment is:

55% of S$8,000 = S$4,400
Existing debts = S$1,500
Maximum mortgage instalment = S$4,400 – S$1,500 = S$2,900

In practice, banks must also stress-test your loan repayment at an interest rate of at least 3.5% p.a. for residential property, even if the actual package rate is lower.[1] This means your income requirement home loan threshold is effectively higher than what you may expect from current market rates.

3. MSR: Additional cap for HDB and EC buyers

If you are buying an HDB flat or an Executive Condominium (before Minimum Occupation Period), you must also meet the Mortgage Servicing Ratio (MSR). MSR caps your monthly mortgage instalment at 30% of your gross monthly income.[1][5]

Example: If you and your spouse earn S$5,000 combined, your MSR limit is S$1,500 per month.[1] If the projected HDB loan instalment is S$1,800, you must either increase your downpayment or extend your tenure (within allowed limits) so the monthly instalment falls below S$1,500.

On the ground, this often affects young couples looking at new BTOs in Tengah or Sengkang. They may comfortably pass TDSR but fail MSR, especially if they stretch for a larger flat type close to MRT stations such as Sengkang MRT or Tampines MRT.

How Banks Treat Self-Employed & Variable Income

If you are self-employed, earn commissions, or receive variable bonuses, banks apply additional haircuts to your income when assessing how much you can borrow.

Self-employed mortgage & variable income mortgage rules

For a self-employed mortgage or a variable income mortgage, banks usually discount your declared income by around 30% for TDSR calculations.[2] That means if you earn S$10,000 per month in variable income, the bank may only count S$7,000 as eligible income when calculating your loan limit.[2]

This haircut reflects risk that your income may fluctuate. It is common for commission-based property agents, insurance agents, Grab drivers and freelancers based in areas like Tanjong Pagar, Raffles Place or Bugis to see their effective income reduced once the bank applies this haircut.

Banks also typically require at least 1–2 years of income history for self-employed borrowers:[4]

Latest 2 years’ Notice of Assessment (NOA) from IRAS
Business registration documents (for company owners)
Latest 6–12 months’ bank statements (to show cashflow)

For salaried employees, banks often ask for the latest 3–6 months of payslips or CPF contribution history.[1][4]

Income Eligibility for HDB Flats & ECs

Beyond loan-specific rules, HDB sets income ceilings for buying subsidised flats and executive condominiums.

According to official government guidance, the monthly household income ceiling is currently:[3]

S$14,000 to buy a subsidised HDB flat (BTO or resale with CPF Housing Grant)[3]
S$16,000 to buy an Executive Condominium (EC)[3]

For households earning S$9,000 or less, you may qualify for the Enhanced CPF Housing Grant of up to S$120,000, subject to remaining lease and other criteria.[3] This can substantially reduce the loan amount you need – and therefore lower the income requirement to qualify for a safe, affordable mortgage.

On the ground, HDB upgraders I’ve worked with in estates like Yishun and Clementi often use grants to reduce their loan, allowing them to keep monthly instalments below 25–30% of their income. This gives a comfortable buffer against interest rate changes and job uncertainties.

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

To improve your approval odds and maximise your safe borrowing power, follow this structured process. This is based on how banks like DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and others typically assess applications, combined with Homejourney’s experience advising Singapore borrowers.

Step 1: Calculate your realistic borrowing power

Estimate your gross monthly income (after applying a 30% haircut if you are self-employed or on variable income).
List all monthly debt repayments – car loans, personal loans, education loans, credit cards (use at least 3–5% of outstanding balance as assumed repayment), renovation loans.
Apply the 55% TDSR cap to your income and subtract existing debt obligations to find your maximum allowable mortgage instalment.[6]
Use Homejourney’s mortgage calculator and eligibility calculator to convert this monthly instalment into a maximum property price and loan quantum, based on different tenures and interest rates Bank Rates Mortgage Rates .

Insider tip: When I walk clients through numbers in cafes near MRTs like Bishan or Paya Lebar, I always suggest keeping total debt at no more than 40–45% of income, even though TDSR allows 55%. This buffer helps you sleep better when rates rise or if income dips.