Choosing between the different types of home loans in Singapore can easily save (or cost) you tens of thousands of dollars over your loan tenure.
For most buyers I work with, the key is understanding the main mortgage types (HDB vs bank, fixed rate vs floating, SORA loans) and then structuring your profile so banks see you as a low‑risk, highly approvable borrower.
This cluster guide gives you a complete comparison of home loan types in Singapore and specific steps to improve your approval chances, while the main pillar guide Types of Home Loans in Singapore: Complete Comparison Guide by Homejourney covers every financing scenario in even more depth.
Main Types of Home Loans in Singapore (Quick Overview)
In Singapore, almost every buyer will be choosing among four core mortgage types:
- HDB housing loan – for eligible HDB buyers only, fixed 2.6% interest (pegged to CPF Ordinary Account rate + 1%).[1]
- Bank housing loan (completed properties) – for HDB and private, usually up to 75% Loan-to-Value (LTV), with fixed rate or floating SORA‑pegged packages.[1]
- Bank BUC (Building Under Construction) loan – for new launch condos/ECs and HDB BTO with bank loan, progressive disbursement as construction completes.[3][8]
- Refinancing / repricing loans – switching banks or packages to get lower rates once your initial lock‑in is over.[2][3]
Most first‑time buyers in estates like Punggol, Sengkang or Tengah end up choosing between an HDB loan at 2.6% and a bank loan that, in late 2025, can be around the low‑to‑mid 1%+ range for promotional fixed or SORA‑pegged packages (exact rates change weekly).[2][3][6]
HDB Loan vs Bank Loan: Which Type Fits You?
The first decision many buyers make – sometimes even while queueing to submit BTO selection at HDB Hub in Toa Payoh – is whether to use an HDB loan or a bank loan.
Key differences: HDB loan vs bank loan
- Interest rate
HDB loan: fixed at 2.6% (CPF OA 2.5% + 1%).[1]
Bank loan: market‑based, roughly 1.3%–2.5% in recent years depending on package and SORA movements.[2][3][6] - Loan-to-Value (LTV)
HDB loan: up to 80% of purchase price or valuation, whichever is lower (subject to MAS and HDB rules).[1]
Bank loan: generally up to 75% LTV for residential property, depending on your existing loans and MAS TDSR limits. - Downpayment
HDB loan: minimum 20%, can usually be fully from CPF if you have enough savings.[1]
Bank loan: at least 5% cash + 20% cash/CPF for typical first loan, subject to MAS rules. - Flexibility & penalties
HDB is usually more lenient for late payments or restructuring compared to banks.[1]
Banks may impose lock‑in penalties (usually 1.5% of outstanding loan) if you redeem early within lock‑in period.[2][3]
Local insight: Buyers I’ve advised in mature estates like Queenstown or Bukit Merah often take HDB loans for peace of mind and the ability to use more CPF upfront, while couples buying bigger resale flats in Bishan or a new launch OCR condo may use bank loans to maximise savings on interest in the early years. Your choice should tie back to your risk appetite and income stability.
For a broader comparison table of every loan type (including ECs and landed homes), refer to the main pillar guide here: Types of Home Loans in Singapore: Complete Comparison Guide by Homejourney .
Fixed Rate vs Floating Rate vs SORA Loans
Once you decide between HDB and bank loan, your next major decision is the mortgage type: fixed rate vs floating vs SORA‑linked packages.
1. Fixed rate home loans
What it is: Interest rate is locked for a defined period (commonly 2–3 years), after which it usually converts to a floating formula.[2][3]
- Typical for 2025: promotional fixed around the low‑1% to mid‑1% range for years 1–2, varying by bank and loan size.[2][3]
- Gives certainty – your monthly instalment remains the same during the fixed period.
- Common for families with tight budgets, e.g. upgrading from a 4‑room HDB in Sengkang to a 3‑bedder in Tampines where cashflow is crucial.
In‑depth decision frameworks for fixed vs floating are covered in: Fixed Rate vs Floating Rate Mortgage: Which to Choose via Homejourney and Fixed vs Floating Home Loans: Bank Rate Comparison Guide | Homejourney .
2. Floating rate home loans (SORA‑pegged)
Most floating loans today are SORA‑linked. SORA (Singapore Overnight Rate Average) is the volume‑weighted average rate of overnight interbank SGD transactions, administered by MAS.[1]
- Typical structure: 1M or 3M SORA + bank spread (e.g. 3M SORA + 0.25% to 0.80%).[3]
- Rates reset every 1 or 3 months depending on your package.
- Can be cheaper than fixed initially, but instalments fluctuate as SORA moves.
Since early 2025, Singapore home loan rates have been trending down from earlier peaks, in line with global rate expectations, leading to lower SORA‑pegged mortgage rates.[6]
The chart below shows recent interest rate trends in Singapore:
Use this together with Homejourney’s real‑time SORA tracking and bank rate comparison at Bank Rates to time your switch between fixed and floating packages safely.
3. Board rate & hybrid packages
Some banks still offer:
- Board rate loans – pegged to the bank’s internal reference rate (less transparent; bank decides when to move this rate).
- Hybrid / step‑up packages – e.g. fixed for the first 2 years then converts to SORA, or stepped rates that rise over time.[2][3]
For most buyers, SORA‑linked or simple fixed packages are clearer and easier to compare. For a deep dive into SORA loans, see: SORA Linked Home Loans Explained: Complete Guide & Alternatives | Homejourney .
How Banks Assess Your Home Loan: Key Approval Criteria
Regardless of mortgage type, banks in Singapore (DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Hong Leong, Citibank and others) use similar frameworks aligned with MAS rules to decide if your loan is approved.
1. Total Debt Servicing Ratio (TDSR) & MSR
- TDSR: Your total monthly debt obligations (including the new home loan) generally cannot exceed 55% of your gross monthly income, as set by MAS.
- MSR (Mortgage Servicing Ratio): For HDB flats and ECs, your housing instalment alone is capped at 30% of gross monthly income.[HDB][MAS]
Example: A couple earning a combined $10,000 working in the CBD and Changi Business Park can usually support up to $3,000/month in HDB mortgage (30% MSR) and up to $5,500/month in total debt under TDSR, assuming no other debts.
2. Income stability & employment
- Full‑time salaried employees (especially in government, GLCs or established MNCs) usually see smoother approvals.
- Self‑employed (e.g. in F&B at Tanjong Pagar, freelance creatives, agents) face stricter scrutiny of income consistency, usually over 2–3 years.
- Variable income (commissions, bonuses, Grab or Gojek side gigs) may be haircut by 30% or more by banks when computing income.
3. Credit history & existing debts
- Outstanding credit cards, personal loans, car loans, renovation loans and Buy Now Pay Later obligations all count into TDSR.
