Buying a home in Singapore is one of the biggest financial commitments you’ll ever make. For most people, it also means taking on a mortgage loan in Singapore that can last 20–30 years. Between HDB loans, bank loans, SORA-pegged packages, fixed rates, and acronyms like LTV and TDSR, it’s easy to feel lost if you’re just starting.

In this guide, we’ll start from the basics (what a mortgage actually is), then explain the key terms, types of loans, how Singapore mortgage rates work, how much you can borrow, and how to apply for a mortgage loan. After that, we’ll go one level deeper into strategy: refinancing, whether to pay off your mortgage early, and how to balance your home loan with investing.

Table of Content

• What Is a Mortgage Loan in Singapore?
• Key Mortgage Terms You Must Know
• Types of Mortgage Loans in Singapore
• How Singapore Mortgage Rates Work (Fixed vs SORA)
• How Much Can You Borrow? LTV, TDSR, and MSR
• Step-by-Step: How to Apply for a Mortgage Loan in Singapore
• How to Compare Mortgage Loan Packages
• Refinancing and Repricing Your Home Loan
• Should You Pay Off Your Mortgage Early or Invest?
• Beyond the Mortgage: How Syfe Can Support Your Home Financing Plan
• Key Risks to Watch Out For
• Quick Takeaways
• Conclusion
• Frequently Asked Questions (FAQs)
  

What Is a Mortgage Loan in Singapore?

A mortgage loan (or home loan) is money you borrow to buy a property, using that same property as collateral. If you cannot repay the loan, the lender can recover the outstanding amount from the sale of the property. This applies whether your lender is HDB or a bank.

In Singapore, most people:

• Use CPF Ordinary Account (OA) savings plus cash for the downpayment
• Then take a housing loan from either HDB or a bank to cover the rest

Key characteristics of a mortgage loan in Singapore:

• Secured loan – The flat or condo is pledged to the lender
• Long tenure – Often 20–30 years, subject to MAS limits
• Monthly installments – You repay both principal and interest every month
• Regulated – Monetary Authority of Singapore (MAS) rules like Loan-to-Value (LTV) and Total Debt Servicing Ratio (TDSR) limit how much you can borrow so you don’t over-stretch financially

A simple way to think about it: Your mortgage is a long-term “rent” you pay to the bank or HDB to eventually own your home.

Key Mortgage Terms You Must Know

Before diving into the best mortgage loan Singapore comparisons, it helps to understand some commonly seen basic terms.

Principal

The principal is the actual amount you borrow. For example: If your property costs $600,000 and you borrow $450,000, then $450,000 is your principal.

Interest Rate vs Effective Interest Rate (EIR)

• Interest rate: The headline rate advertised (e.g. 3% p.a.).
• Effective interest rate (EIR): The true cost of borrowing, which factors in compounding, fees, and the repayment schedule. It is generally encouraged to use EIR when comparing loans.

Tenure

The tenure is how long you’ll take to repay the loan (e.g. 25 or 30 years). A longer tenure lowers your monthly installment but increases the total interest you pay over time.

Fixed Rate vs Floating Rate

• Fixed rate:
  • Interest is locked in for a period (e.g. first 2–3 years).
  • Repayments are predictable during the fixed period.
• Floating rate:
  • Rate can change over time, usually tied to a benchmark like the Singapore Overnight Rate Average (SORA).
  • Installments can go up or down when the benchmark moves.

SORA (Singapore Overnight Rate Average)

SORA is the main benchmark interest rate used in many floating home loans today. It has replaced older benchmarks like SIBOR and SOR for new Singapore Dollar loans. Most floating Singapore mortgage rates are now structured as SORA + a spread (spread here refers to the bank’s fixed markup).

Lock-In Period

The lock-in period (e.g. 2 or 3 years) is a period where you may need to pay a penalty if you:

• Fully redeem your loan early
• Refinance to another bank

Repricing vs Refinancing

• Repricing: Switching to a different loan package within the same bank.
• Refinancing: Moving your home loan to a different bank.

You don’t need to fully master these yet — just being familiar with the terms will make the rest of this guide easier to follow.

Types of Mortgage Loans in Singapore

Broadly, there are two main types of mortgage loan Singapore options:

• HDB housing loan (from HDB)
• Bank home loan (from banks, for both HDB and private property)

HDB Housing Loan (Concessionary Loan)

HDB provides a concessionary home loan for eligible buyers of HDB flats.

Key features (as of 2025):

• Interest rate:
  • Pegged at 0.1% above the prevailing CPF OA interest rate
  • CPF OA has a floor of 2.5% p.a., so the HDB concessionary loan rate is currently 2.6% p.a.
• LTV limit:
  • Up to 75% of the purchase price (or valuation, for resale), subject to MAS rules and HDB eligibility at time of application
• Eligibility:
  • Restricted to Singapore Citizens who meet income, property ownership and other conditions set by HDB
• Lock-in period:
  • Generally no lock-in; there is normally no penalty for full redemption

Pros:

• Rate is relatively stable and easy to understand
• No sudden spike in installments due to market swings
• No lock-in, so you can prepay without typical bank penalties

Cons:

• Rate may be higher than some bank packages in certain interest rate environments
• Only available for HDB flats (not private property)
• Strict eligibility rules; some buyers may not qualify

Bank Home Loans (for HDB and Private Property)

Banks offer home loans for:

• HDB flats (as an alternative to HDB loan)
• Private condos, ECs, and landed homes

Common types of bank home loans include:

• Fixed-rate packages (e.g. 2- or 3-year fixed)
• Floating SORA-based packages
• Hybrid packages (fixed-then-floating, or step-up/step-down rates)

Pros:

• Often lower promotional rates in the first few years
• Wide variety of packages to suit different risk profiles
• Can potentially lower total interest cost if you actively manage your loan (e.g. refinancing when it makes sense)

Cons:

• More complex to compare and understand
• Floating rates can change frequently with SORA
• Fixed packages typically come with lock-in periods and early redemption penalties

Completed vs BUC (Building Under Construction)

For private properties:

• Completed property:
  • Loan is disbursed in full at purchase completion
  • You start paying full monthly installments from then
• BUC (Building Under Construction):
  • Bank disburses the loan in stages as the project is built
  • You service interest on the drawn-down portion (progressive payments)
  • Monthly outlay is lower at first, rising as the project nears completion

How Singapore Mortgage Rates Work (Fixed vs SORA)

Once you know the main loan types, the next question is: How do interest rates actually work in Singapore?

Fixed-Rate Home Loans

A fixed-rate home loan locks in your rate for a specified period (e.g. 2–3 years at 2.8% p.a.):

• Your monthly installments are predictable during the fixed period
• After the fixed period, your loan usually converts to a floating package (often SORA + a spread or a bank’s board rate)

Fixed rates may suit you if:

• Your budget is tight and you can’t afford large jumps in monthly payments
• You expect interest rates to rise
• You prefer stability over squeezing out every last bit of savings from variable rates

Floating (SORA-Pegged) Home Loans

Most new floating bank home loans in Singapore are now SORA-based. A common structure is: 3M SORA (3-month average of daily SORA rates) + spread e.g. 3M SORA + 0.8% p.a.

• When SORA rises, your installment goes up
• When SORA falls, your installment may come down
• Packages usually have clear reset periods (e.g. every 1 or 3 months)

SORA-pegged loans may suit you if:

• You can tolerate fluctuations in monthly repayments
• You want the potential to benefit when interest rates fall
• You’re comfortable reviewing your mortgage every few years and refinancing if needed

“Teaser” Promo Rates vs Reversionary Rates

Many best mortgage loan Singapore comparison pages highlight:

• Year 1–2 promotional rates (usually low)
• Reversionary rate (often SORA + a higher spread or a board rate)

A common mistake is to focus only on the first-year rate. Instead, think in 3–5 year blocks:

• What is the average rate over the next few years?
• Do you have a plan to reprice or refinance when your lock-in ends?
• Are there legal subsidies or administrative fees that affect the real cost of the package?

How Much Can You Borrow? LTV, TDSR, and MSR

To prevent over-borrowing, Singapore uses three main limits: LTV, TDSR and MSR. These determine how much home loan you can get.

Loan-to-Value (LTV) Limit

The LTV limit sets the maximum percentage of the property value that you’re allowed to borrow: LTV = Loan amount ÷ Property value

As a broad guide (subject to conditions and MAS rules):

• If you have no existing housing loans, your LTV for your first property can be up to 75%
• If you already have one or more housing loans, your LTV limit is reduced (e.g. to 45%, 25%, 35% or 15% depending on loan count, tenure and age)

A lower LTV means you must pay more upfront using cash and CPF OA, including a mandatory minimum cash portion.

Total Debt Servicing Ratio (TDSR)

TDSR caps the share of your gross monthly income that can go towards repaying all your debts, including:

• Home loans
• Car loans
• Personal loans
• Credit card balances and installments

Currently, the TDSR limit is 55% of your gross monthly income.

Example

• Household income: $10,000/month
• Max total debt repayments under TDSR = 55% × $10,000 = $5,500/month
• If you already have $1,000/month in car and credit card repayments, your mortgage installment must fit within the remaining $4,500/month.

TDSR is a core part of how banks assess how much mortgage you qualify for.

Mortgage Servicing Ratio (MSR)

MSR applies to:

• HDB flats (including resale)
• Executive Condominiums (ECs) bought directly from developers

MSR caps the share of your gross monthly income that can go towards just your housing loan at 30%.

Example

• Household income: $8,000/month
• MSR limit = 30% × $8,000 = $2,400/month
• Your monthly HDB or EC mortgage installment must be ≤ $2,400.

Practical tip: Even if TDSR allows you to borrow more (up to 55% of income), many financial education resources recommend keeping your mortgage installment at around 25–30% of income for long-term comfort.

Step-by-Step: How to Apply for a Mortgage Loan in Singapore

Here’s a simple, practical guide on how to apply for a mortgage loan in Singapore.

Step 1: Get Your HFE Letter or IPA

• HDB buyers:
  • Apply for an HDB Flat Eligibility (HFE) letter.
  • This checks if you’re eligible for an HDB flat and whether you qualify for an HDB housing loan, with an estimated loan amount.
• Bank loan applicants:
  • Request an In-Principle Approval (IPA) from your preferred bank(s) or via a mortgage broker/comparison site.
  • The IPA gives you an indicative maximum amount you can borrow, so you know your price range.

This step ensures you don’t fall in love with a property you ultimately can’t finance.

Step 2: Shortlist Loan Packages

Once you know your budget:

• For HDB flats, compare HDB loan vs bank loan
• For private property, compare multiple bank packages

Use a mortgage loan Singapore calculator on banks’ websites or comparison platforms to estimate:

• Monthly installments
• Total interest paid over different tenures
• Impact of various fixed and floating options

Step 3: Prepare Your Documents

Commonly required documents include:

• NRIC of you and any co-borrowers
• Latest 3–6 months’ payslips
• Latest CPF contribution history
• Latest Notice of Assessment (NOA) from IRAS
• Existing loan and credit card statements (if any)
• Option to Purchase (OTP) or Sales & Purchase Agreement when available

Self-employed borrowers usually need additional documents like 2–3 years of tax assessments and, sometimes, business financials.

Step 4: Submit Your Application and Apply for Mortgage Loan

You can usually apply for mortgage loan approval via:

• Bank website or app (often with Singpass MyInfo pre-fill)
• Mortgage broker platforms
• The HDB portal (for HDB loans)

The lender will then:

• Pull your credit report
• Calculate your TDSR and MSR (if applicable)
• Assess how much home loan you can get and on what terms

Step 5: Receive and Accept the Letter of Offer

Once approved, you’ll receive a Letter of Offer summarising:

• Approved loan amount
• Interest rate structure (fixed or floating, and how it’s calculated)
• Lock-in period and early repayment penalties
• Repayment schedule and EIR
• Any legal subsidies and administrative fees

Read the offer carefully and clarify questions about:

• What happens when the fixed period ends
• How future Singapore mortgage rates changes affect your installment
• Whether you can reprice your loan in future and at what cost

Step 6: Legal Work and Disbursement

Your appointed law firm will:

• Handle legal documentation with the lender and the seller/developer
• Register the mortgage on your property
• Coordinate disbursement of funds

Once funds are disbursed, you’ll start monthly repayments — usually via GIRO, CPF OA, or a mix of both.

How to Compare Mortgage Loan Packages

When you start comparing the best mortgage loan Singapore options, don’t just look at the lowest rate you see on a banner ad.

Look at the Whole Package, Not Just the Headline Rate

Key points to examine:

• Promotional vs reversionary rate
  • What happens after the first 2–3 years?
• Lock-in period
  • Is it 2 years, 3 years, or more?
  • Are there restrictions on partial prepayments?
• EIR (Effective Interest Rate)
  • Gives a more accurate view of the cost over the lock-in period than headline rates alone

Consider All Costs

Beyond headline Singapore mortgage rates, look at:

• Legal and valuation fees
• Any legal subsidies (and clawback conditions if you refinance within a certain timeframe)
• Repricing fees (for switching packages within the same bank)
• Penalties for partial or full prepayment during lock-in

These can make a significant difference to the real cost of a package over a few years.

Use Brokers and Comparison Platforms Wisely

Mortgage brokers and comparison platforms (e.g. MoneySmart, SingSaver, DollarBack, Redbrick, MortgageWise) can:

• Show mortgage loan Singapore packages from multiple banks
• Provide up-to-date Singapore mortgage rates
• Explain differences between fixed, floating and hybrid structures
• Help you run “what if” scenarios (e.g. “What if SORA rises by 1%?”)

However, the best mortgage loan Singapore for you is not just the one with the lowest first-year rate. It should be the one that balances:

• Cost
• Flexibility
• Your comfort with rate movements and complexity

Refinancing and Repricing Your Home Loan

Once your lock-in period is over, your loan usually moves onto a higher reversionary rate. At this point, refinancing or repricing can potentially save a lot of interest.

Repricing vs Refinancing (Recap)

• Repricing:
  • You stay with the same bank
  • Switch to a new package they offer
  • Usually simpler and sometimes cheaper in fees
• Refinancing:
  • You move your loan to a different bank
  • May involve legal and valuation costs
  • Can sometimes offer better rates or more suitable structures

When Does Refinancing Make Sense?

You might consider refinancing if:

• You are near or just past the end of your lock-in period
• Current Singapore mortgage rates on the market are meaningfully lower than what you’re paying
• The projected interest savings over, say, 2–3 years exceed the switching costs

Example: If refinancing costs you $3,000 in legal and admin fees but saves you an estimated $10,000 in interest over 3 years, it’s likely worth serious consideration.

Common Refinancing Mistakes

Avoid:

• Focusing only on the first-year teaser rate and ignoring the reversionary rate
• Overlooking clawback conditions on previous legal subsidies
• Assuming you’ll automatically qualify — your TDSR, MSR and credit profile will be reassessed, and changes in income or new debts can affect eligibility

Should You Pay Off Your Mortgage Early or Invest?

Once you’re comfortably servicing your loan, you might ask: “If I have extra cash, should I pay off my mortgage loan in Singapore faster, or invest instead?”

Why Paying Down Your Mortgage Can Be Attractive

• The “return” is roughly equal to your mortgage rate.
  • For example, paying off a 3% loan early is like earning a risk-free 3% p.a. before tax.
• Reduces your monthly commitments and total interest cost over time
• Psychological benefit: less debt stress and more peace of mind

Why Investing Instead Can Make Sense

• Over the long term, diversified portfolios (e.g. global stocks and bonds) have historically delivered higher returns than typical mortgage rates, though this is not guaranteed.
• Investing keeps your money more liquid, unlike cash locked up in your property.
• You can align investment goals with specific timelines (e.g. retirement, children’s education) rather than focusing solely on debt repayment.

A Balanced Middle-Ground (What Many Singaporeans Do)

Instead of going “all in” on either extreme, many homeowners:

• Keep a solid emergency fund (e.g. 6–12 months of expenses and mortgage payments) in lower-risk tools
• Make regular mortgage payments as usual
• Use surplus cash to invest regularly via diversified portfolios
• Periodically consider partial prepayments when interest rates are high or when they want a further buffer in their cash flow

This way, your mortgage loan Singapore becomes part of a broader wealth plan, not your only financial focus.

Beyond the Mortgage: How Syfe Can Support Your Home Financing Plan

Your financial life isn’t just about paying the bank. You’re also trying to:

• Stay liquid for emergencies
• Save for near-term goals (renovation, kids, upcoming big expenses)
• Grow your wealth over decades

Here’s how Syfe’s solutions can sit alongside your home loan.

1. Short-Term Cash Needs: Cash Management via Syfe Cash+ Solutions

If you’re:

• Building up funds for renovation
• Keeping a buffer in case Singapore mortgage rates rise
• Planning a future refinance home loan Singapore move and need cash for legal or valuation fees

You may not want this money sitting in a near-zero interest account.

With Syfe’s Cash+ Flexi, your money is invested in low-risk, high-liquidity funds, with the objective of achieving steady returns in line with or above money market rates.

This can be useful for funds you plan to use in the short to medium term, while still aiming for some return instead of 0% interest.

2. Long-Term Growth: Syfe Managed Portfolios and Syfe Brokerage

Once your mortgage is manageable and your near-term buffers are set, you can focus on growing your money.

Through Syfe, you can:

• Invest into globally diversified managed portfolios like Syfe Core Portfolios that balance equities and bonds based on your risk profile and time horizon
• Use Syfe Brokerage to buy ETFs and stocks — for example, broad market ETFs tracking US, global or regional indices — as a complement to your property and CPF

Instead of using every spare dollar to aggressively pay down a low-rate home loan, you might:

• Maintain your regular monthly installments
• Set up a dollar-cost averaging (DCA) plan into a diversified portfolio via Syfe
• Review yearly whether to channel extra funds into partial prepayment or increase DCA contributions, depending on your comfort and market conditions

This way, your property, CPF, and investments all work together to support your long-term goals. 

Start managing your finances more effectively with Syfe.

Key Risks to Watch Out For

Even with good planning, mortgages come with risks. Being aware of them helps you manage them better.

1. Interest Rate Risk

If you choose a floating mortgage loan Singapore package, your repayments can rise when SORA goes up.

How to manage:

• Stress-test your budget at 1–2 percentage points above your current rate
• Maintain a larger cash buffer or Cash+ portfolio
• Consider fixing your rate if you are very sensitive to payment increases

2. Income and Cash Flow Risk

Job loss, pay cuts, or business downturns can affect your ability to service the loan.

How to manage:

• Keep your actual mortgage servicing ratio more conservative than the maximum 55% TDSR — for example, targeting 25–35% of your income
• Build 6–12 months of expenses and mortgage payments in lower-risk instruments
• If you foresee difficulty, speak to your lender early — restructuring options may be available

3. Property Price Risk

Property prices can stagnate or decline, especially if you bought near a peak.

How to manage:

• Don’t overstretch just because you’re afraid of “missing the market”
• Plan to hold your home for the long term, not flip quickly
• Diversify your wealth beyond property (CPF, Syfe portfolios, other investments)

4. Behavioural Risk

Many painful mortgage stories are behavioural, not mathematical:

• Buying the absolute maximum property price just because the bank says you qualify
• Ignoring your loan for years and paying high reversionary rates
• Panic-selling investments during temporary market dips to “rescue” short-term cash flow

Having a clear plan — and reviewing it annually — helps you avoid emotional decisions.

Quick Takeaways

• A mortgage loan in Singapore is a long-term, regulated loan secured against your property, usually lasting 20–30 years.
• You’ll typically choose between an HDB loan (stable, pegged to CPF OA + 0.1%) and bank loans (more variety, often lower promos but more complex).
• LTV, TDSR and MSR rules limit how much you can borrow; staying below the maximum limits gives you more breathing room.
• Don’t choose a loan based only on Year 1 rates — consider 3–5 year costs, lock-in, reversionary rates and flexibility.
• Repricing or refinancing after your lock-in can save significant interest, but you must weigh the costs and eligibility.
• Instead of throwing every dollar at your home loan, many Singaporeans keep a buffer and invest the rest — using cash solutions and diversified portfolios (for example via Syfe) to grow wealth alongside property.

Conclusion

If you’ve never looked at mortgage loan Singapore options before, the jargon and choices can feel overwhelming. But once you break it down step-by-step, the decisions become much clearer.

First, understand the basics — what a mortgage is, and how simple concepts like principal, interest and tenure work. Then learn the key rules: LTV, TDSR, MSR. With that foundation, you’ll be able to evaluate whether an HDB loan or a bank loan suits you better, and whether a fixed or SORA-floating package matches your risk comfort and budget.

From there, it’s about thoughtful execution:

• Buy within your means and avoid maxing out TDSR just because the bank allows it
• Evaluate packages over 3–5 years, not just Year 1
• Review your loan around your lock-in expiry and consider repricing or refinancing if the numbers make sense

Lastly, remember that your mortgage is only one part of your financial life. Building a healthy cash buffer and investing for long-term goals are just as important. With a clear plan and regular check-ins, your home loan doesn’t have to be a burden. It can be a stable foundation for the rest of your financial journey in Singapore.

Frequently Asked Questions (FAQs)

1. What is the difference between an HDB loan and a bank loan?
An HDB housing loan is offered directly by HDB to eligible buyers of HDB flats. Its interest rate is currently 2.6% p.a., pegged at 0.1% above the prevailing CPF OA interest rate of 2.5% p.a.. It tends to be stable and straightforward, with no typical lock-in period. A bank mortgage loan is offered by banks for both HDB and private properties. Bank loans come in multiple forms — fixed-rate, floating SORA, or hybrid — and may offer lower promotional rates but involve more complexity, potential rate fluctuations, and lock-in periods.

2. How much home loan can I get in Singapore?
This depends on:

• Property price and LTV limit
• Your income and existing debts (TDSR)
• Whether the property is HDB/EC (where MSR applies)
• Your age and desired loan tenure

In general:

• Your total monthly debt repayments (including your home loan) cannot exceed 55% of your gross income under TDSR
• For HDB flats and new ECs, your housing installment alone cannot exceed 30% of your gross income under MSR

Banks, brokers and online calculators can estimate how much you can borrow based on these rules.

3. Is it better to choose a fixed or floating SORA home loan?
There is no one “best” answer — it depends on your situation and view on Singapore mortgage rates:

• Fixed packages give repayment stability during the lock-in period and are useful if you’re worried about rising rates or have tight cash flow.
• Floating SORA packages can be cheaper if interest rates fall, but your monthly installments can increase when SORA rises.

Many homeowners start with a fixed package for peace of mind, then reassess and possibly switch to a floating package when refinancing later.

4. When should I refinance or reprice my mortgage loan?
You may want to reprice or refinance when:

• Your lock-in period is ending or has ended
• Your current rate is significantly above competitive market rates
• The net savings (after legal and other costs) over the next 2–3 years are meaningful

Use a mortgage loan Singapore calculator or speak to brokers to compare scenarios. Make sure you understand any clawbacks on subsidies and your current TDSR/MSR standing before you commit.

5. Should I pay off my mortgage early or invest my spare cash?
It depends on your risk appetite and financial goals:

• Paying off early can be attractive if your mortgage rate is high and you value guaranteed savings and peace of mind.
• Investing instead can make sense if your mortgage rate is relatively low and you’re comfortable taking some investment risk for potentially higher long-term returns.

Many Singaporeans adopt a hybrid approach: maintain a healthy emergency buffer, avoid over-leveraging, make regular mortgage payments, and invest surplus funds through diversified portfolios to grow wealth while slowly reducing debt.