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Housing Loans
Navigate Singapore's property financing landscape. Compare HDB loans vs bank loans and find the best mortgage for your dream home.
Types of Home Loans in Singapore
Singapore offers two main types of housing loans: HDB loans (for HDB flats) and bank loans (for any property). Understanding the differences is crucial for making the right choice.
HDB Loan
- Only for HDB flats (BTO, resale)
- Fixed rate at 2.6% (0.1% above CPF OA)
- Up to 80% LTV (Loan-to-Value)
- 25-year maximum tenure
- No early repayment penalty
- Must meet income ceiling
Bank Loan
- For HDB, condo, landed properties
- Variable or fixed rates (currently 3-4%)
- Up to 75% LTV (first property)
- Up to 30-year tenure
- May have lock-in period penalties
- No income ceiling requirement
HDB Loan vs Bank Loan: Which to Choose?
| Factor | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | 2.6% (stable) | 3-4% (can fluctuate) |
| LTV Ratio | Up to 80% | Up to 75% |
| Down Payment | 20% (can be all CPF) | 25% (5% cash, 20% CPF) |
| Flexibility | No penalty for early repayment | Lock-in period penalties |
| Rate Stability | Fixed to CPF rate | Subject to market conditions |
Choose HDB Loan If:
- • You value stability and predictability
- • You have limited cash for down payment
- • You want flexibility for early repayment
- • You're risk-averse about interest rate changes
Choose Bank Loan If:
- • Interest rates are low and you can lock in
- • You want longer tenure (up to 30 years)
- • You're buying private property
- • You exceed HDB income ceiling
Understanding TDSR & MSR
MAS imposes borrowing limits to ensure Singaporeans don't over-leverage. These ratios determine how much you can borrow.
TDSR (Total Debt Servicing Ratio)
Maximum portion of gross monthly income that can go to all debt repayments (including home loan, car loan, credit cards, etc.)
Applies to: All property loans
MSR (Mortgage Servicing Ratio)
Maximum portion of gross monthly income for HDB loan repayment specifically.
Applies to: HDB and EC loans only
Calculation Example
If you earn $8,000/month gross:
• MSR limit (HDB): $8,000 x 30% = $2,400/month max mortgage payment
• TDSR limit: $8,000 x 55% = $4,400/month for ALL debts combined
Understanding Interest Rates
Types of Bank Loan Rates
Fixed Rate
Rate stays constant for a period (1-5 years). Provides certainty but may be higher than initial floating rates.
SORA-Pegged (Floating)
Tied to Singapore Overnight Rate Average. Transparent, market-based. Rate changes with SORA.
Fixed Deposit Home Rate (FHR)
Linked to bank's fixed deposit rates. More stable than SORA but can be less transparent.
Interest Rate Warning
Bank rates can rise significantly. A 1% increase on a $500,000 loan adds ~$420/month to your payment. Always stress-test your affordability at higher rates.
Mortgage Calculator
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Home Loan Application Process
Get In-Principle Approval (IPA)
Apply for IPA before house hunting to know your budget. Valid for 30-90 days.
Compare Loan Packages
Shop around for best rates. Consider fixed vs floating, lock-in periods, and flexibility.
Submit Full Application
Provide income documents, OTP/S&P agreement, property details.
Property Valuation
Bank arranges valuation to ensure property is worth the purchase price.
Loan Offer
Receive formal loan offer letter. Review terms carefully before accepting.
Legal Completion
Lawyer prepares documents, loan is disbursed, property ownership transfers.
Tips for Home Buyers
Don't Max Out Your Budget
Just because you qualify for a large loan doesn't mean you should take it. Leave buffer for rate increases and life changes.
Consider Total Cost of Ownership
Factor in stamp duty, legal fees, renovation, maintenance, and property tax.
Keep Emergency Fund Separate
Don't drain all savings for down payment. Keep 6-12 months expenses as emergency fund.
Review Loan Regularly
After lock-in period, compare rates and consider refinancing if better deals available.
Frequently Asked Questions
Can I use CPF for down payment?
Yes, you can use CPF OA for down payment and monthly instalments. For bank loans, at least 5% must be in cash. For HDB loans, you can use 100% CPF if available.
What if I can't meet MSR or TDSR?
You'll need to either buy a cheaper property, increase down payment, extend tenure, add a co-borrower with income, or reduce other debt obligations.
How long is the typical lock-in period?
Bank loans typically have 2-3 year lock-in periods. Early repayment or refinancing during lock-in incurs penalties (usually 1.5% of outstanding loan).
Should I take a shorter or longer tenure?
Shorter tenure means higher monthly payments but less total interest. Longer tenure is more manageable monthly but costs more overall. Balance affordability with total cost.
Find Your Perfect Home Loan
Compare mortgage rates and get personalized loan recommendations. Our certified advisors will help you find the best financing for your property.