7 Mortgage Mistakes First-Time Buyers Make in Singapore | Homejourney

Common mortgage mistakes first-time buyers make can cost thousands in Singapore's competitive property market, from losing deposits to overpaying interest. This Homejourney cluster article reveals first buyer mistakes like skipping loan pre-approval and ignoring bank valuations, with Singapore-specific fixes.

Part of our pillar on First-Time Buyer Mistakes That Cost Thousands on Your Mortgage | Homejourney ">First-Time Buyer Financing Guide, it equips you with tactical steps for safe, trusted home loans. Homejourney prioritizes your security by verifying rates from DBS, OCBC, UOB and more.

Why Mortgage Mistakes Hit First-Time Buyers Hardest

First-time buyers often face HDB flats or resale condos priced $500,000-$1.8 million, with TDSR limiting loans to 55% of income and MSR for HDB at 30%.[1] A single error like job changes post-IPA can void approval within the 14-21 day OTP window, risking your 1-5% deposit ($5,000-$90,000).[1]

Homejourney's bank-rates page lets you compare DBS, OCBC, UOB, HSBC rates instantly, avoiding costly home loan errors. Use Singpass for verified applications—your safety first.

Mistake 1: Not Securing In-Principle Approval (IPA) Early

Many rush into viewings without an IPA, only to find they can't afford the property. Banks assess TDSR (Total Debt Servicing Ratio) and MSR (Mortgage Servicing Ratio) based on your income, CPF, and debts.[1]

Actionable fix: Get a free IPA from multiple banks via Homejourney's mortgage calculator. Example: A $10,000 monthly household income qualifies for ~$1.8M loan at 3.5% SORA, but drops if car loans exceed 20% debt ratio.[3]

Mistake 2: Changes After IPA Without Refreshing

Job switches, pay cuts, or new debts (e.g., credit card spikes) invalidate IPAs. Final approval digs deeper into 6-month bank statements and employment verification—probation periods often lead to rejections.[1]

Singapore's MAS rules require stable income proof. Avoid new buyer pitfalls: Refresh IPA 2 weeks before OTP. Homejourney's multi-bank submission auto-refreshes with Singpass/MyInfo for verified data.

Mistake 3: Ignoring Cash-Over-Valuation (COV)

For resale HDB/condos, banks loan 80-90% of their valuation, not purchase price. A $1.8M condo valued at $1.76M means $40,000 cash top-up—COV can't be financed or fully CPF-covered.[1]

In softer markets like 2026, conservative valuations rise. Tip: Budget 5% extra cash. Check comparables on Homejourney's Projects Directory ">projects directory before offers.

Mistake 4: Underestimating Total Costs Beyond Monthly Instalments

Buyers focus on ~$4,300/month for $1.5M condo loans but forget ABSD (up to 17% for second properties), stamp duties ($30,000+), legal fees ($2,000-$5,000), and agent commissions.[2][3]

HDB upgraders: Factor CPF Ordinary Account limits. Use Homejourney's calculator to simulate: $800,000 HDB loan at 2.6% HDB rate vs 3.2% bank SORA—bank saves $50,000 over 25 years but risks higher lock-in.HDB Loan vs Bank Loan: Best for First-Time Buyers | Homejourney

Understanding SORA and Current Rates

SORA (Singapore Overnight Rate Average) replaced SOR in 2024; most loans peg to 3M compounded SORA + 0.8-1.5%. MAS caps bank loans at 75% LTV for first-timers.

The chart below shows recent interest rate trends in Singapore:

As seen, 6M SORA hovered ~3.0-3.5% in late 2025. Track live on Homejourney bank-rates from partners like Standard Chartered, Maybank, CIMB.

Mistake 5: Choosing HDB vs Bank Loan Without Comparing

HDB loans (2.6% fixed, 75% LTV) suit stability; banks (SORA-based, up to 90% LTV early) offer flexibility but rate risk. First-timers overlook bank promos waiving fees.HDB Loan vs Bank Loan: Best for First-Time Buyers | Homejourney

Decision framework:

Stable job? Bank for lower initial rates.
Risk-averse? HDB for no fluctuations.
Apply via Homejourney: One form, offers from DBS, UOB, HSBC.

Mistake 6: Poor Timing and Documentation Delays

Banks skip public holidays; OTP countdown excludes weekends. Missing CPF statements or employer letters causes 7-14 day delays, risking deposit forfeiture.[1]

Checklist:

Prepare IC, income slips (last 3 months), CPF statements 6 months.
Submit via Singpass on Homejourney—auto-verified.
Buffer 10 days pre-OTP.

Mistake 7: Overlooking Refinancing and Exit Options

Locking 3-year packages without break fees awareness traps you. If SORA drops, refinance—but TDSR re-applies.[3]

Homejourney simplifies: Compare refinancing from OCBC, RHB, Public Bank. Post-purchase, maintain via Aircon Services ">aircon services.

FAQ: Common Mortgage Questions for Singapore First-Timers

Q: What's the max loan for $8,000 monthly income?
A: ~$1.2M under TDSR (55%), less if debts exist. Use Homejourney calculator for precision. (MAS guidelines)

Q: HDB or bank loan for BTO?
A: Bank for higher quantum if eligible. See BTO Buyer Complete Financing Guide: Homejourney Tips ">BTO Financing Guide.

Q: Can I use CPF for everything?
A: No—25% cash minimum downpayment. Details in CPF公积金购房完整指南：Homejourney 2026权威手册 ">CPF Guide.

Q: What if rates rise post-lock-in?
A: Refinance penalty-free after promo. Track SORA on Homejourney.

Q: Need a broker?
A: Homejourney connects you safely—no upfront fees.

Disclaimer: This is educational; consult professionals. Rates as of 2026; verify via official HDB/MAS sites.

Avoid mortgage traps with Homejourney's trusted tools. Start at bank-rates, search budgets via property-search, and link back to our pillar for full coverage.