Getting a Mortgage After Bankruptcy: Rates and Fees Explained

Obtaining a mortgage after bankruptcy in Singapore is challenging but entirely possible with the right strategy and timing. While banks view discharged bankrupts as higher-risk borrowers, several major lenders including DBS, OCBC, UOB, and HSBC have specific programs designed for post-bankruptcy borrowers. The key differences you'll encounter include higher interest rates (typically 0.5% to 1.5% above standard rates), stricter documentation requirements, and potentially larger down payments. Understanding these factors—and knowing when to apply—can significantly improve your approval odds and help you secure the best available terms.

This guide explains the current mortgage landscape for discharged bankrupts in Singapore, including realistic rate expectations, associated fees, and actionable steps to strengthen your application. Homejourney is committed to helping you navigate this process safely and transparently, ensuring you make informed decisions about one of life's most important financial commitments.

Understanding Your Bankruptcy Status and Mortgage Eligibility

In Singapore, bankruptcy status significantly impacts mortgage eligibility, but the impact diminishes over time. A discharged bankrupt—someone whose bankruptcy has been formally discharged by the court—has better prospects than an undischarged bankrupt, though both face challenges. Most banks require a minimum waiting period of 3-5 years after discharge before considering a mortgage application, though some lenders may consider applications after 2 years with exceptional circumstances.

Your credit report will show the bankruptcy for up to 5 years after discharge, making this period critical for rebuilding your credit profile. During this time, banks assess not just the bankruptcy itself, but your financial behavior since discharge: Have you maintained stable employment? Do you have a clean payment record on credit cards or loans taken after discharge? Have you demonstrated responsible financial management? These factors often matter more than the bankruptcy event itself.

The Monetary Authority of Singapore (MAS) doesn't prohibit banks from lending to discharged bankrupts, but individual banks set their own policies. This variation creates opportunities—some lenders are more flexible than others. Homejourney's bank rates comparison tool allows you to identify which institutions are actively lending to post-bankruptcy borrowers and compare their specific terms.

Current Mortgage Rates for Discharged Bankrupts (2026)

As of January 2026, Singapore's mortgage market is at historically favorable levels, with standard rates ranging from 1.35% to 1.8% for well-qualified borrowers[1][3]. However, discharged bankrupts typically face a premium of 0.5% to 1.5% above these base rates, placing post-bankruptcy mortgages in the 1.85% to 3.3% range depending on the lender and your specific circumstances.

The rate difference reflects the bank's perceived risk. Factors that influence your exact rate include: years since discharge (more recent bankruptcies command higher premiums), reason for bankruptcy (business failure vs. personal circumstances), employment stability, debt-to-income ratio, and down payment size. A larger down payment—ideally 25% or more—can help offset the bankruptcy premium by reducing the bank's exposure.

Most post-bankruptcy mortgages are offered on floating-rate terms pegged to the 3-month Singapore Overnight Rate Average (SORA), currently at 1.21%[5]. This benchmark has fallen significantly from 2023 levels above 3.6%, creating favorable conditions for borrowers. The chart below shows recent SORA trends to help you understand how rates have moved:

Floating rates offer flexibility—as SORA declines, your rate declines proportionally—but introduce rate volatility. Some banks offer fixed-rate options for discharged bankrupts, typically at rates 0.3% to 0.5% higher than floating alternatives, providing payment certainty over 2-3 year lock-in periods. DBS and OCBC have been particularly active in offering competitive packages to non-standard borrowers, with some floating-rate products starting from 1.55% for well-qualified applicants[1].

Fees and Costs Associated with Post-Bankruptcy Mortgages

Beyond interest rates, discharged bankrupts should budget for several fees that may be higher or more restrictive than standard mortgage applications:

Legal and Conveyancing Fees: Typically S$1,500-S$3,500 depending on property value. Some banks offer subsidies (S$500-S$1,500) during promotional periods, particularly in Q1 when competition intensifies[3].
Valuation Fees: S$600-S$1,200 to assess property value. Banks may require independent valuations for post-bankruptcy applicants, adding cost.
Processing and Administrative Fees: S$300-S$800 covering application processing, credit checks, and documentation review. Post-bankruptcy applications often incur higher administrative costs due to additional verification requirements.
Early Repayment Penalties: Most mortgages carry 1.5% penalty if redeemed within the lock-in period (typically 2-3 years) due to property sale[4]. Some banks waive or reduce this penalty for floating-rate packages, particularly when the sale is the reason for early repayment.
Mortgage Insurance: If your down payment is below 20%, Mortgage Reducing Term Assurance (MRTA) becomes mandatory, costing S$50-S$150 monthly depending on loan amount and term.
Credit Insurance (Optional): Some banks offer credit life insurance protecting your loan in case of death or disability, typically S$30-S$80 monthly.

Total upfront costs for a post-bankruptcy mortgage typically range from S$3,500 to S$6,000 at closing, plus ongoing insurance costs. These fees are often higher than standard mortgages because banks perceive greater risk and require more thorough documentation review.

Strategic Timing: When to Apply for a Post-Bankruptcy Mortgage

Timing significantly impacts your approval odds and the rates you'll receive. The optimal window is 3-5 years after discharge, with approval likelihood and rate competitiveness improving as you move further from the bankruptcy date. However, current market conditions (January 2026) present a unique advantage: interest rates are at 3-year lows[1][3], and banks are actively competing for market share with cash rebates and flexible features[3].

If you're 3+ years post-discharge, the current environment is favorable for applying. Banks are offering competitive packages including legal subsidies and cash rebates, particularly in Q1[3]. If you're less than 3 years post-discharge, waiting may improve your approval odds, but if you're approaching the 3-year mark and rates remain favorable, the cost of waiting may outweigh the modest improvement in approval likelihood.

Consider also your employment stability and financial track record since discharge. The stronger your post-bankruptcy financial behavior, the less the bankruptcy itself matters. If you've been in your current role for 2+ years with consistent income and clean payment records on any credit facilities obtained after discharge, you're in a stronger position to negotiate favorable terms.

Strengthening Your Mortgage Application After Bankruptcy

Several concrete steps improve your approval odds and help you secure better rates:

Build Your Credit Profile: Obtain a credit card (preferably secured initially) and maintain perfect payment records. Demonstrating 12-24 months of responsible credit usage post-discharge significantly strengthens your application.
Increase Your Down Payment: A 25-30% down payment substantially reduces bank risk and often qualifies you for better rates. This is the single most effective way to offset the bankruptcy premium.
Stabilize Your Employment: Remain in your current role for at least 2 years. Job changes within 6 months of application can trigger additional scrutiny or rate increases.
Reduce Existing Debt: Lower your debt-to-income ratio by paying down credit cards, personal loans, or car loans. Most banks want to see DTI below 60% for post-bankruptcy borrowers (vs. 70-80% for standard applicants).
Document Your Financial Recovery: Prepare a narrative explaining the bankruptcy circumstances and demonstrating how you've recovered. Banks appreciate transparency and evidence of learning from the experience.
Obtain a Co-Borrower: A spouse or family member with strong credit can significantly improve approval odds and rate terms, as banks will consider their income and credit profile.

Comparing Banks and Finding the Best Rates for Post-Bankruptcy Borrowers

Not all banks treat discharged bankrupts equally. DBS, OCBC, UOB, and HSBC have demonstrated willingness to lend to post-bankruptcy borrowers with competitive terms, while others maintain stricter policies. The best approach is to compare offerings across multiple lenders simultaneously rather than applying individually, which would trigger multiple credit inquiries and potentially damage your credit score.