New Launch vs Resale Mortgage: Which Offers Better Bank Rates?
When buying a property in Singapore, one of the most critical decisions is choosing between a new launch and a resale property—and the mortgage financing for each works very differently. New launch properties typically use Build-to-Suit (BUC) loans with progressive payment structures, while resale properties access standard completed property loans with immediate full disbursement. Understanding these differences is essential because they directly affect your interest rates, monthly payments, and overall borrowing costs.
In 2026, Singapore's mortgage environment presents a unique opportunity. Current fixed rates start from 1.30-1.88%, while floating SORA rates sit around 1.43% (SORA + 0.25%).[1] However, the rates and terms available to you depend significantly on whether you're financing a new launch or resale property. This guide breaks down the key differences, helps you understand current bank rates, and shows you how to make the right choice for your situation.
Understanding New Launch Mortgages (BUC Loans)
New launch properties in Singapore are financed through Build-Up Credit (BUC) loans, also called progressive payment mortgages. Unlike resale properties where you borrow the full amount upfront, BUC loans disburse progressively as the development reaches key construction milestones.
Here's how the disbursement typically works:[3]
- 5% on foundation completion (approximately 1 year after launch)
- Up to 60% at TOP (Temporary Occupation Permit) (approximately 3 years after launch)
- Remaining balance at handover
This progressive structure has a significant advantage: you only pay interest on the amount actually borrowed at each stage. In the first year, you're only paying interest on 5% of your loan, not the full amount. This dramatically reduces your interest burden during the construction phase.
For example, if you're financing a S$1.5M new launch property with a S$950,000 loan at 1.8% over 25 years, your first-year interest costs would be calculated on approximately S$47,500 (5% of the loan), not the full S$950,000. This is why new launch mortgages often appear more affordable despite having similar headline rates to resale loans.[1]
Understanding Resale Property Mortgages
Resale property mortgages work differently. You receive the full loan amount immediately upon completion of the purchase, and you begin paying interest on the entire amount from day one. This is called a completed property loan or standard home loan.
The advantage of resale mortgages is simplicity and certainty. You know your exact monthly payment from the beginning, and you can move into the property immediately. The disadvantage is that you're paying interest on the full loan amount from the start, which increases your total interest costs compared to a new launch property with the same nominal rate.
Using the same S$950,000 loan at 1.8% over 25 years as an example, your monthly payment would be approximately S$4,050.[1] This remains constant throughout the loan period (for fixed rates) or adjusts based on SORA movements (for floating rates).
Current Bank Rates: New Launch vs Resale Comparison
As of January 2026, Singapore's mortgage rates have become increasingly competitive. Banks have reduced their pricing significantly from the highs seen in 2023 when rates exceeded 3%.[2]
Current Rate Environment:[1][2]
- Fixed rates: 1.30-1.88% for loan amounts of S$500,000 and above
- Floating SORA rates: Approximately 1.43% (SORA + 0.25% spread)
- Promotional rates: Starting from 1.15% for qualifying borrowers
- HDB concessionary rate: Fixed at 2.6% (creating significant refinancing opportunities)
The chart below shows recent interest rate trends in Singapore to help you understand how rates have moved:
Key Rate Differences Between New Launch and Resale:
While the headline rates offered by banks are often similar for both new launch and resale properties, several factors create differences in your effective borrowing costs:
- Lock-in periods: New launch BUC loans typically have longer lock-in periods (often 3-5 years) compared to resale loans (typically 2-3 years), reflecting the longer construction timeline
- Early redemption penalties: New launch loans may have different penalty structures during the construction phase
- Repricing flexibility: Resale loans often offer more flexible repricing options after the initial lock-in period
- Loan tenure options: Both typically allow up to 30 years, but resale loans may offer more flexible tenure adjustments
Fixed vs Floating Rates: Which Is Better in 2026?
The choice between fixed and floating rates significantly impacts your mortgage decision, especially when comparing new launch and resale properties.
Fixed Rate Mortgages:[2]
Fixed rates offer payment certainty. Your monthly payment remains unchanged throughout the fixed period (typically 1-3 years), regardless of market movements. This appeals to borrowers who want to budget predictably and protect against potential rate increases. Current fixed rates start below 1.8% for qualifying loan amounts.
Floating Rate Mortgages:[2]
Floating rates are tied to SORA and adjust monthly or quarterly. As SORA moves, your interest rate and monthly payment change accordingly. In the current environment where SORA is expected to trend between 1.0-1.5% in 2026, floating rates offer potential savings if rates continue declining.[1] However, they introduce payment uncertainty.
2026 Rate Outlook:[1]
SORA is projected to trend around 1.0-1.5% in 2026, potentially dipping below 1%, which suggests floating rates may remain attractive. However, this projection is not guaranteed. For new launch properties where you're already benefiting from progressive payment structures, a floating rate could amplify your savings if rates continue falling. For resale properties, fixed rates provide the certainty of knowing your full payment commitment upfront.
Comparing Major Singapore Banks: New Launch vs Resale Rates
Singapore's major banks—DBS, OCBC, UOB, HSBC, and Standard Chartered—all offer competitive rates for both new launch and resale properties. However, rates and terms vary based on your profile, loan amount, and property type.
How to Compare Bank Rates Effectively:
Rather than comparing headline rates alone, evaluate these factors:
- All-in rate: The effective rate including spreads and any hidden costs
- Lock-in period: How long you're committed before you can refinance
- Repricing options: Flexibility to switch between fixed and floating
- Early redemption penalties: Costs if you sell or refinance before the lock-in period ends
- Processing timeline: How quickly the bank approves and disburses funds
- Customer service: Quality of support during the loan tenure
On Homejourney's Bank Rates page, you can compare rates from all major Singapore banks instantly, calculate your borrowing eligibility, and submit one application to receive offers from multiple lenders simultaneously. This ensures you're getting the most competitive rate for your specific situation.
Borrowing Power and TDSR: New Launch vs Resale
Your borrowing capacity is determined by the Total Debt Service Ratio (TDSR), a regulatory requirement set by the Monetary Authority of Singapore. This applies equally to new launch and resale properties.
TDSR Rules:
- Maximum monthly loan repayment: 55% of gross monthly income
- Stress-tested at 4%: Banks calculate your ability to repay if rates rise to 4%
- Includes all debt: Credit cards, car loans, personal loans, and mortgage payments
Downpayment Requirements:[1]
- First property: Minimum 5% cash downpayment, up to 75% LTV (Loan-to-Value)
- Second property: Minimum 5% cash downpayment, up to 45% LTV
- CPF usage: Can use CPF for downpayment and monthly repayments (resale and new launch)
For new launch properties, your TDSR calculation is based on the progressive disbursement schedule. Banks typically stress-test based on the full loan amount even though you're not borrowing it all upfront. This is an important distinction—you may qualify for a larger new launch property than you think because of the progressive payment structure.
Real Example: New Launch vs Resale Financing
Let's compare a practical scenario to illustrate the differences:
Scenario: HDB Upgrader to Private Property
Profile: Selling HDB flat for S$550,000, buying a new condo for S$1.5M
New Launch Option (BUC Loan):[1]
- Purchase price: S$1.5M
- Minus HDB sale proceeds: S$550,000
- Net to finance: S$950,000
- Downpayment (25% of purchase price): S$375,000
- Loan amount: S$950,000 (75% LTV)
- Year 1 interest on 5%: Approximately S$855 (on S$47,500)
- Year 3+ monthly payment at 1.8%, 25 years: Approximately S$4,050
Resale Option (Completed Property Loan):
- Purchase price: S$1.5M (assuming similar resale property)
- Minus HDB sale proceeds: S$550,000
- Net to finance: S$950,000
- Downpayment (25%): S$375,000
- Loan amount: S$950,000 (75% LTV)
- Monthly payment from day one at 1.8%, 25 years: S$4,050
Key Difference: With the new launch, you save on interest during the construction phase because you're only borrowing progressively. By the time you move in (year 3), the total interest paid is significantly lower than the resale option, even though the monthly payment is identical once construction completes.
Refinancing Considerations: New Launch vs Resale
Refinancing is an important consideration, especially in the current rate environment. Many homeowners are refinancing from HDB concessionary rates (2.6%) to bank loans below 2%.[1]
Refinancing New Launch Properties:
Once a new launch property reaches TOP and the BUC loan converts to a standard mortgage, you can refinance just like any resale property. However, timing is important. If you refinance too early in the lock-in period, you'll pay early redemption penalties (typically 1.5%).
Refinancing Resale Properties:
Resale properties can be refinanced at any time, though early redemption penalties apply during the lock-in period. In 2026, with rates projected to remain low, refinancing from higher-rate loans to current rates (1.30-1.88%) could save thousands in interest.
Repricing vs Refinancing:[1]
| Factor | Repricing (Same Bank) | Refinancing (New Bank) |
|---|---|---|
| Legal Costs | None | S$2,000-3,000 |
| Processing Time | 2-4 weeks | 6-8 weeks |
| Rate Competitiveness | Good (if valued customer) | Best (competitive offers) |
Homejourney's refinancing tools make it easy to compare whether repricing or refinancing makes financial sense for your situation.
Key Factors to Consider When Choosing
Choose New Launch If:
- You want lower interest costs during construction (progressive payment advantage)
- You prefer modern facilities and latest building standards
- You can wait 3+ years before moving in
- You want to lock in prices before market appreciation
- You're comfortable with construction risk and timeline delays
Choose Resale If:
- You need immediate occupancy
- You want to see the property condition before buying
- You prefer established neighborhoods with proven amenities
- You want flexibility to refinance or sell without construction delays
- You want to negotiate the price (resale properties are negotiable)
How Homejourney Helps You Make the Right Choice
Homejourney is designed specifically for Singapore property buyers who prioritize safety, trust, and transparency. Our platform helps you navigate the new launch vs resale decision with confidence:
- Bank Rates Comparison: Compare current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major banks instantly at Bank Rates
- Mortgage Eligibility Calculator: Calculate your borrowing power and monthly payments for both new launch and resale scenarios
- Multi-Bank Application:
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