Local vs Foreign Bank Mortgages: Which Is Right for You?
If you're buying property in Singapore, choosing between a local bank and a foreign bank for your mortgage is one of the most important financial decisions you'll make. Local banks like DBS, OCBC, and UOB typically offer more competitive rates and flexible terms for Singapore citizens and permanent residents, while foreign banks such as HSBC and Standard Chartered often provide specialized services for expats and international borrowers. The right choice depends on your citizenship status, income stability, property type, and long-term financial goals.
At Homejourney, we believe in transparency and helping you make informed decisions. This guide breaks down the key differences between local and foreign bank mortgages so you can confidently choose the option that works best for your situation.
Local Banks vs Foreign Banks: Key Differences
Local banks in Singapore include DBS, OCBC, UOB, Maybank, and CIMB. These institutions are regulated by the Monetary Authority of Singapore (MAS) and have deep roots in the local property market. Foreign banks operating in Singapore include HSBC, Standard Chartered, Citibank, and others. While they're also MAS-regulated, their lending criteria and product structures often differ significantly from local competitors[1].
The most notable difference? Interest rates and loan eligibility. As of January 2026, local banks are offering some of the most competitive rates in the market. DBS and OCBC's 2-year fixed rates start from 1.75% and 1.65% respectively, while Standard Chartered offers rates as low as 1.68%[1]. These rates reflect the local banks' lower funding costs and deeper understanding of Singapore's property market.
Foreign banks, while competitive, often charge slightly higher rates and impose stricter lending conditions. However, they excel at serving expats and non-citizens who face restrictions with local lenders.
Who Should Choose Local Banks?
Singapore citizens and permanent residents should almost always prioritize local banks. Here's why:
- Better interest rates: Local banks offer the lowest fixed and floating rates in the market. In January 2026, promotional rates from local banks start as low as 1.48% for 2-year fixed mortgages[1].
- Higher loan-to-value (LTV) ratios: Citizens can typically borrow up to 80% of the property value for HDB flats and up to 75% for private properties, compared to 75% maximum for foreigners[2].
- Flexible terms: Local banks offer more repricing options, shorter lock-in periods, and easier refinancing processes.
- Faster approval: Local banks have streamlined processes for Singapore citizens, often completing approvals within 2-4 weeks.
- Better customer service: With multiple branches across Singapore and established relationships, local banks provide personalized support.
If you're a Singapore citizen buying a resale HDB flat, private condo, or landed property, local banks should be your first choice. The rate advantage alone can save you tens of thousands of dollars over a 30-year mortgage.
Best Local Banks for Different Borrower Profiles
For rate-conscious borrowers: Standard Chartered and Maybank currently offer the most competitive fixed rates, with 2-year fixed packages at 1.68% and 1.65% respectively[1]. Both banks also have shorter lock-in periods, giving you flexibility if rates drop further.
For first-time buyers: DBS and OCBC offer excellent entry-level packages with promotional rates and simplified documentation. DBS's 2-year fixed rate of 1.75% includes options for early repayment without penalties[5].
For HDB upgraders: Bank mortgage rates are now significantly lower than the HDB concessionary rate of 2.6%[5]. If you're switching from an HDB loan to a bank mortgage, local banks like DBS offer competitive rates (1.55% for 3-year fixed packages[5]) with no early repayment penalties.
Who Should Choose Foreign Banks?
Expats and non-citizens often have no choice but to use foreign banks, as local banks have stricter eligibility requirements for non-residents. However, foreign banks also serve specific borrower profiles where they excel:
- Non-citizens and expats: Foreign banks like HSBC and Standard Chartered specialize in serving international borrowers who cannot access local bank mortgages[2].
- High-net-worth individuals: Foreign banks offer wealth management integration and premium services for borrowers with complex financial situations.
- International income earners: If your income is primarily in foreign currencies or from overseas sources, foreign banks may be more flexible in assessing your repayment capacity.
- Property investors with multiple mortgages: Some foreign banks have more lenient policies on debt servicing ratios (TDSR) for experienced investors.
The trade-off? Foreign banks typically charge 0.1-0.3% higher interest rates than local competitors and require larger down payments (25-40% vs. 20% for local banks)[2]. They also impose stricter loan-to-value caps and may limit property types (some restrict landed homes to non-citizens).
Foreign Bank Rates and Terms
As of January 2026, HSBC's 2-year fixed rate stands at 1.70%, while Standard Chartered offers 1.68%[1]. These rates are competitive but typically 0.05-0.10% higher than the best local bank offers. Foreign banks also tend to have longer lock-in periods (2-3 years vs. 1-2 years for local banks) and higher early repayment penalties.
However, foreign banks often provide better support for expats navigating Singapore's property market, including assistance with visa requirements, international documentation, and multi-currency account management.
Understanding Current Mortgage Rates and Benchmarks
Singapore's mortgage market shifted to the Singapore Overnight Rate Average (SORA) benchmark in 2021, replacing the older SIBOR system[1]. This change affects how floating-rate mortgages work and how rates adjust over time.
Most banks now offer both fixed-rate and SORA-linked floating packages. Fixed rates provide payment certainty for 1-3 years, while floating rates adjust monthly or quarterly based on SORA movements plus a bank spread.
The chart below shows recent interest rate trends in Singapore to help you understand how rates have moved:
As you can see, rates have trended downward from 2022 peaks, with current average mortgage rates hovering around 2.5-2.75%[3]. This creates an excellent opportunity for borrowers, particularly those switching from HDB loans or refinancing existing mortgages at lower rates.
Fixed vs. Floating: Which Should You Choose?
Fixed rates are ideal if you want payment certainty and prefer stable monthly instalments. With rates at historic lows, locking in a 2-year fixed rate at 1.48-1.75% provides protection if rates rise[1].
Floating rates suit borrowers who can tolerate payment fluctuations and want to benefit from further rate decreases. Current SORA spreads range from +0.25% to +0.65% depending on the bank and loan size[1]. If SORA continues to ease, floating rates could drop below fixed rates, saving you money.
Eligibility and Borrowing Power: Local vs. Foreign Banks
Your eligibility and maximum borrowing amount differ significantly between local and foreign banks:
Local Banks (Singapore Citizens/PRs):
- Maximum LTV: 80% for HDB flats, 75% for private properties
- Down payment required: 20-25%
- Debt servicing ratio (TDSR) limit: 60% (can be relaxed for strong borrowers)
- Income assessment: Based on last 2 years of tax returns or payslips
Foreign Banks (Non-Citizens/Expats):
- Maximum LTV: 75% for private properties only
- Down payment required: 25-40%
- TDSR limit: 55-60% (stricter enforcement)
- Income assessment: May require additional documentation, international income verification
- Property restrictions: May not finance HDB flats or certain landed homes[2]
To understand your borrowing power, use Homejourney's mortgage eligibility calculator at Bank Rates . Simply enter your income, existing debts, and down payment amount to see how much you can borrow from different banks.
Comparing Rates and Fees Across Banks
Beyond interest rates, you should compare the total cost of borrowing, including:
- Loan origination fees: Typically 0.3-0.5% of loan amount
- Property valuation fees: $300-600 depending on property value
- Legal fees: $800-1,500 for mortgage documentation
- Lock-in period penalties: 0.5-1.5% of outstanding loan if you repay early
- Repricing fees: $0-300 if you switch to a different rate package
Standard Chartered stands out for offering zero lock-in period on some packages, allowing you to refinance without penalties if rates drop[1]. This flexibility can save thousands over your loan term.
To compare rates and fees from all major banks instantly, visit Homejourney's bank rates page at Bank Rates . You'll see real-time rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major lenders, allowing you to identify the best deal for your situation.
Application Process: Local vs. Foreign Banks
Local banks have streamlined digital processes. Most accept online applications via their websites or through mortgage brokers. With Homejourney, you can submit one application that reaches multiple local banks simultaneously, allowing them to compete for your business. Using Singpass/MyInfo integration, you can auto-fill your application in seconds, significantly speeding up approval[6].
Foreign banks typically require more documentation and longer processing times (4-6 weeks vs. 2-4 weeks for local banks). They may request international income verification, visa documentation, and additional financial statements.
For the fastest approval, apply through Homejourney's multi-bank application system. You'll receive offers from multiple banks within days, giving you genuine choice and leverage to negotiate better terms.
Making Your Decision: A Practical Framework
Use this decision framework to choose between local and foreign banks:
Choose a Local Bank if:
- You're a Singapore citizen or permanent resident
- You want the lowest possible interest rates
- You value flexibility and easy refinancing
- You're buying HDB or private property
- You want fast approval and minimal documentation
Choose a Foreign Bank if:
- You're an expat or non-citizen buying private property
- Your income is primarily in foreign currencies
- You need specialized wealth management services
- You prefer a bank with international presence and support
- You're willing to accept slightly higher rates for greater flexibility
If you're unsure which bank suits you best, Homejourney's mortgage brokers can provide personalized guidance. Apply via our bank rates page at Bank Rates to connect with a broker who understands your situation and can negotiate the best terms on your behalf.
Frequently Asked Questions
Can I get a mortgage from a local bank as an expat?
Most local banks restrict mortgages to Singapore citizens and permanent residents. However, some banks like DBS and OCBC may consider applications from expats with strong income documentation and significant down payments (typically 30-40%). Your best option is to apply through a foreign bank like HSBC or Standard Chartered, which specialize in expat financing[2].
Which local bank offers the best mortgage rates in 2026?
As of January 2026, Standard Chartered and Maybank offer the most competitive fixed rates at 1.68% and 1.65% respectively for 2-year fixed packages[1]. However, rates change frequently based on market conditions. Use Homejourney's bank rates page at Bank Rates to see the latest rates and compare across all banks in real-time.
Should I choose a fixed or floating mortgage rate?
Fixed rates provide payment certainty and are ideal if you prefer stable monthly instalments. Floating rates are better if you can tolerate payment fluctuations and want to benefit from further rate decreases. Current fixed rates (1.48-1.75%) are at historic lows, making them attractive for most borrowers[1]. Consider your risk tolerance and financial situation when deciding.
Can I refinance from a foreign bank to a local bank?
Yes, if you become a Singapore permanent resident or if your circumstances change, you can refinance to a local bank and access their better rates and terms. However, ensure you understand any early repayment penalties from your current lender. Homejourney can help you explore refinancing options and calculate potential savings.
