Home Loans In Singapore (2024): Best Mortgage Rates To Consider

Don’t go eenie meenie miney mo when choosing which bank loan to take up - we’ve provided you with the best home loans for your property with the lowest interest rates to help you save (or squander) some extra bucks each month.

In September 2022, HDB announced tightened cooling measures for properties in Singapore, which affected the Total Debt Servicing Ratio (TDSR) and home loans.

The maximum loan-to-value for HDB loans is now 80% from 85%. With that said, it means that the downpayment for HDB flats has been increased from the current 15% to 20% (staggered downpayment is split into 5% and 15%).

Being able to afford the downpayment for your house is one thing, but making monthly mortgage repayments is another ball game altogether - you’ll realise how much extra you’re paying just for the accumulated interest.

In this high-interest home loan (or overall personal loan) climate, choosing the right loan for you is crucial. Treat it as if you’re buying a new pair of shoes - you have to shop around to find the best pair that fits you while also making sure they’re at the lowest price possible. With so many banks offering different home loans with variable or fixed interest rates and varying lock-in periods, you might be at a loss.

But don’t worry, we’ve got you. Here’s what you need to know about home loans in Singapore.

Best Home Loan & Mortgate Rates in Singapore with Low-interest Rates

Table of contents:

• How does a home loan work?
  • What to look out for when choosing a home loan
  • Eligibility
  • How to improve your chances of securing a home loan
• What's the difference between a home loan, housing loan, and mortgage?
• Home loans for private vs public housing
• HDB vs bank loans
• How to choose the best home loan
• Fixed vs floating home loans 
  • Fixed home loan rates
  • Floating home loan rates
• Best home loans for HDB flats 
• Best home loans for private property
• Best home loans for Building Under Construction
• How to apply for a home loan?
• Frequently Asked Questions (FAQs)

How does a home loan work?

What to look out for when choosing a home loan

There are 5 important things to note when taking up a home loan: lock-in period, additional fees, tenure, possible monthly repayments, and of course, interest rates. Additional charges come in various shapes and sizes, regardless of whether you're borrowing from HDB itself or a bank. For HDB loans, you can expect to pay an application fee, an option fee, a property valuation fee, legal fees as well as registration fees. On the other hand, bank loans expect you to pay a processing fee, administrative fee, a safekeeping fee, and more.

Interest rates and tenures are important to note as well, as they significantly affect your monthly repayments. A lock-in period is the duration during which you will have to pay a penalty should you cancel your loan, a factor you may wish to consider as well. 

It's also good practice to calculate your monthly repayments using an online calculator (most banks have online calculators of their own as well) to check if you are able to pay off your loan consistently. 

Eligibility

For HDB loans, the eligibility criteria is as follows:

• At least 1 applicant is a Singapore Citizen
• The applicant(s) and essential occupier(s) have not taken 2 or more housing loans from HDB previously.
• Singles aged 35 and above cannot buy a 5-room or smaller resale flat, or a 2 room flexi flat on a 99 year-lease in non-mature estates. Seniors aged 55 and above cannot apply for a 2-room flexi flat on short lease.
• The maximum monthly household income is $7,000 for singles, $14,000 for families, and $21,000 for extended families
• Persons listed in the application must not own or show interest in any local or overseas private property. 

When it comes to bank loans, the exact eligibility criteria is set by the bank itself. However, common requirements may include:

• Applicant must be 21 years old and above
• The minimum loan amount must be S$300,000 for private housing, and S$200,000 for HDB flats.

How to improve your chances of securing a loan

There are certain factors that can be improved to boost your chances of securing a home loan including but not limited to your credit history, spending habits, and debt clearances. It is recommended to begin improving your credit history and reducing unnecessary spending habits about 6 months before applying for a home loan. If you have any existing debts, you can try clearing them as much as possible beforehand to improve your home loan application.

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What's the difference between a home loan, housing loan, and mortgage?

As it turns out, home loans and housing loans both refer to a loan taken to finance a residential property purchase and can be used interchangeably. 

A mortgage loan can be used to fund any purpose of your choice including  higher education, a wedding, or your new home. In other words, a mortgage loan is most commonly used to buy property, but can be used for other expenses as well. Do note that there are several key differences between mortgage loans and home loans. The Loan-To-Value (LTV) ratio for mortgage loans is significantly lower that that for home loans, as you are only allowed to borrow about 60% to 70% of the purchase price. In contrast, a typical bank home loan or HDB home loan allows you to borrow up to 75% and 80% of the purchase price respectively. Mortgage loans also tend to have a slightly higher processing fee along with noticeable shorter tenures of up to 15 years, 10 years less than a HDB home loan's maximum tenure of 25 years.

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Home loans for private vs public housing

Your choice of property makes quite the difference, too. Especially in term of which loans you can apply for. Aspiring HDB homeowners can choose between HDB and bank home loans while private property owners can only take up bank loans.

Public housing

As mentioned above, if you are looking to buy a HDB flat, you may choose to borrow either directly from HDB or from a bank. However, do note that there is an eligibility criteria to be met, which concerns your monthly household income and any existing properties you might own. HDB homes loans are typically offered at lower interest rates and a smaller downpayment. For more information, do check out our HDB and bank loan comparison below. 

Private housing

If you wish to finance your new landed property, private or Executive Condominium (EC) flat, you can consider taking up a bank home loan. Each bank offered various home loan packages with varying interest rates and lock-in periods, so it is important to select a home loan that suits your needs. If your private property is under construction at the time of borrowing, you can try taking up a bank loan with no lock in period. This way, you are free to refinance your loan to one with a lower interest rate in the future.

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HDB vs bank loans

HDB loans are a significantly more affordable deal then bank loans. Despite this, there are still many notable perks to note for bank loans, especially if the property in question is private.

HDB loans

HDB loans have noticeably lower interest rates at 2.60% p.a. (0.1% above the CPF Ordinary Account (OA) interest rate of 2.5% p.a.) when compared to bank loans. Apart from interest rates, HDB loans can be secured with a 20% downpayment—all of which can be paid using CPF OA funds—and no lock-in period, meaning you face no penalties or additional charges should you choose to default the loan. HDB home loans also allow you to borrow up to 80% of your desired home's purchase price. 

Bank loans

Bank loans are usually offered with higher interest rates, usually starting at 2.8% p.a. and also require a higher downpayment of 25%, out of which 5% must be paid in cash. You are also only allowed to borrow up to 75% of your home's purchase price. The majority of bank loans are provided with lock-in periods as well, so you might have to pay additional fees in you default the loan within the lock-in period.

When applying for a bank loans, you can choose between a fixed or floating home loan interest rate, and option available with HDB loans. Fixed home loan rates are decided prior to taking up the loan and remain unchanged throughout the duration of the loan, meaning consistent monthly repayments. On the other hand, floating home loan interest rates are known to fluctuate based on the current market and industry reference rates. This means that your monthly repayments will be constantly changing. However, the advantage of floating home loan rates lies in the fact that you might end up paying a lower total interest than that of fixed home loan rates should the market rates decrease. 

Bank loans are usually offered in accordance with the Singapore Interbank Offer Rate (SIBOR) or the Singapore Overnight Rate Average (SORA) home loan rates, both of which are used as benchmarks for bank interest rates. 

SIBOR

SIBOR, which was discontinued after December 2024, is no longer offered as part of most bank loans. If you have already taken up a SIBOR home loan, however, fret not! Your home loan will automatically be converted from SIBOR to SORA starting this June. SIBOR is typically seen as less reliable and more volatile as compared to SORA as it is calculated based on predicted rates quoted by banks. 

SORA

SORA interest rates are commonly used as part of bank of home loan, with new rates being published every day at 9:00 AM on the MAS website.. SORA is calculated using actual market transactions as a reference, and is thus considered to be much more reliable and consistent. A of 11 June 2024, the current SORA rate is 3.59% p.a.. Do note that banks typically charge additional interest on top of the current SORA rate for bank home loans.

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How to choose the best home loan?

1. Type of home loan

The first thing that you have to consider is whether you want a loan that has a fixed or floating interest rate, which largely depends on your risk appetite. This will be further elaborated on later.

Homebuyers buying an HDB flat have the option of taking up an HDB loan as opposed to a bank loan. Although HDB's home loan generally has a higher interest rate, it is maintained at a fixed rate and requires a 20% down payment, compared to the usual 25% down payment for bank loans.

2. Interest rates

Though you may think interest rates make up a very small proportion of the property price, you’ll be surprised at how much extra you’ll have to fork out when accumulated. This is why shopping around for a loan with a low-interest rate can save you thousands of dollars.

Current bank rates are usually offering about 4.25% p.a. and more, so be sure not to settle for the first bank loan you lay your eyes on.

It’s worth noting that banks usually offer lower spreads (the rate you see after “+”) and hence lower “promotional” rates for the first few years, before increasing it back to a higher rate thereafter.

3. Lock-in period

With most bank loans, you’ll realise that they always have a lock-in period, usually between zero and five years. This lock-in period is the period of time when you’ll be charged a penalty (usually 2% to 5% of your outstanding loan amount) if you decide to make prepayments or cancel your home loan.

This is the bank’s way to cover its base as banks typically offer promotional rates in the first few years with a lower interest rate, incentivising buyers to be “locked in”.

This is why if you’re purchasing a home that is still under construction, also known as Building Under Construction (BUC), it is recommended that you take up a bank loan with no lock-in period, so you can decide to refinance any time when your home is completed.

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Understanding home loan interest rates

Fixed home loan rates vs floating home loan rates

Fixed interest rates 

Fixed interest rates are self-explanatory, meaning that the interest rate will be maintained during the entire period of the mortgage agreement. This gives you stability and consistency, making it handy when you plan out your finances every month, since the monthly mortgage repayments are always static at a specific amount.

Fixed interest rates are great for those with a low-risk appetite, since the interest rates will not increase due to market fluctuations, though fixed interest rates are usually higher than floating rates.

Since these rates are fixed, they are not pegged to market or board rates during the lock-in period. However, once the period is over, the prices will be pegged, which is a good indicator for you to refinance.

Floating interest rates 

On the other hand, floating or variable interest rates are subjected to the volatile market fluctuations, and are pegged to Singapore Interbank Offer Rate (SIBOR), Singapore Overnight Rate Average (SORA), Board Rate or Fixed Deposit Home Rate (FHR) that changes according to the index.

However, do note that SIBOR-based loans will be discontinued by the end of 2024.

They are more preferable for those who have a higher risk appetite. Dips in the market interest rates can translate into more savings for the month, while any increase will have you paying higher amounts.

Despite this, do note that most banks will usually inform you 30 days in advance when interest rates change, giving you the option to refinance, which is a full repayment of your existing home loan or moving your loan to another competitor lender because of their lower interest rates.

When it comes to SIBOR rates, banks usually offer either 1M SIBOR (1-month SIBOR) or 3M SIBOR (3-months SIBOR), which essentially means that the rates are revised every one or three months, depending on the loan package you choose. If you’re looking for a less volatile package, go for the 3M SIBOR as rates only change every three months, making it less volatile and less risky.

Best home loans for HDB flats

If you’re buying a HDB flat, you have the option of opting for a HDB loan or a bank loan. While HDB loans are fixed at a specific rate (2.6% currently), and only require a down payment of 20% of your flat’s purchase price, the interest rate is a lot higher than what banks offer. HDB loans also allow you to borrow up to 80% of the purchase price while banks only loan you up to 75%.

On the other hand, opting for a bank loan will grant you a much lower interest rate, be it fixed or floating rates. We’ve scoured the internet for the best rates for you - both fixed and floating to meet your every need. The rates below are based on a bank loan of S$500,000 and a tenure of 25 years.

Best fixed home loans for HDB flats

Here are the best loans with fixed interest rates:

*as of 9 May 2024

If you're interested in getting the best home loan rates, speak to a Mortgage Master Specialist by filling out the form below:

Which bank’s fixed home loan is best?

As you can see, there aren't many fixed-rate home loans in the market right now, as most of the mortgages offered are floating home loans. 

For more information, you can always head over to the bank's website to enquire more.

Best floating home loans for HDB flats

If you have a higher risk appetite and do not want to pay for the high interest that a HDB loan would entail, then you’d probably want to sign up for a home loan with floating rates. 

Here are the best home loans with the lowest floating interest rates:

*as of 9 May 2024

Which bank’s floating home loan is best?

Interest-wise, your best bet would be to sign up for the Citibank 3M SORA or the DBS Bridging Loan, which offer the lowest interest rates at 3.64% + 0.55% p.a. and 4.25% p.a. respectively.

However, if you’re planning on refinancing your bank loan soon, you might want to go for the DBS Bridging Loan which has no lock-in period. However, their interest is relatively on the high side.

Do remember to check the SORA and SIBOR rates as they are always changing.

Best home loans for private property

If you’re getting a private property loan, your only option would be to take up a home loan from a bank, as you won’t be able to get an HDB loan. With both fixed and floating rates available for you, it’s best to choose a plan based on your risk appetite, and whether or not you plan to refinance soon after.

Best fixed home loans for private property

Here are the best loans with fixed interest rates:

*as of 9 May 2024

Best floating home loans for private property

We’ve compared the best home loans with floating interest rates:

*as of 9 May 2024

Standard Chartered CashOne Personal Loan

Best home loans for Buildings Under Construction (BUC)

While you may think that getting a loan after your house is completed might be the best way to go, we recommend otherwise - not only does settling your home loan give you peace of mind, you might also be able to get better interest rates.

Since your home is not yet completed, many homeowners opt for home loans with no lock-in period, which gives them the freedom to refinance and get a lower interest rate after their property is complete.

On this basis, we’ve compiled a list of bank loans with no lock-in period and the lowest interest rates.

*as of 9 May 2024

Which bank’s home loan is best for BUC?

Since the loans we’ve compiled do not have a lock-in period, the only variable is the interest rate. From the table, the DBS bridging loan package offers the lowest interest rate at 4.25% p.a.

However, as the interest rate and spreads are always changing, it is best to check their website before signing up for a loan to get their latest rates.

How to apply for a home loan

If you choice of loan is a HDB home loan, you will need to apply for the loan using an HDB Flat Eligibility (HFE) letter. Here's how:

• Head to the HDB flat portal. Click on 'Login.' Make sure to use Singpass to speed up your application!
• You will be asked to provide details such as the particulars of flat applicants and occupiers, and your desired housing loan package. You will need to provide all the necessary details within 30 calendar days.
• Confirm application details

That's all! You can expect to receive your HFE letter within a month from the date of application. The HFE letter will be valid for nine months after the date of issue.

The process is slightly different for bank loans, as you will be required to head to the web page of your preferred bank home loan.

• After doing so, you may be asked to fill out a quick questionnaire before being prompted to begin your application (use Singpass for a quicker application!)
• You will also asked to provide relevant information and documents. These can include:
  • NRIC
  • Flat information
  • Option to Purchase/Sales & Purchase Agreement
  • Valuation report
  • Latest Notice of Assessment and 12 months CPF Contribution History.
  • Latest 3 months payslips and salary crediting.
  • Latest credit facilities statements
• Submit your application! The approval process may take anywhere between 24 hours to several weeks.

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Frequently Asked Questions (FAQs)

Q: What is the current home loan interest rate in Singapore?

The fixed home loan interest rate for HDB flats is typically around 2.60% p.a., including the CPF Ordinary Account interest rate. The fixed interest rate for private housing home loans usually ranges from 2.80% to 3.00% p.a.. 

Q: What is the minimum deposit for a home loan in Singapore

Home loans from HDB require a 20% downpayment. When purchasing a BTO, you can opt for the staggered downpayment scheme, which allows you to pay 5% downpayment when signing the lease agreement and the remaining 15% during key collection.

If you care purchasing private housing or an Executive Condominium (EC) apartment, you will need to take up a bank loan. Bank loans typically require a 25% downpayment, and with at least 5% being paid in cash.

Q: How much loan can I get in Singapore housing?

The maximum amount you can can borrow from HDB loans in 85% of your property's purchase price. However, this number can be lower depending on factors such as the buyer's age and monthly income. 

For bank loans, the maximum you can borrow is 75% of the property purchase price.

Q: What is the maximum age for housing loans in Singapore?

The maximum age is 65 for HDB loans, and 70-75 for bank loans. If you are above these ages, you can consider listing a younger joint borrower, as this can greatly help in loan approval.

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