Applying for a Home Loan in Singapore: A Step-by-Step Guide

In Singapore, no one pays full cash upfront for their new home (we only wish we could!). Most Singaporeans take up a home loan when buying property — whether it’s a Build-to-Order (BTO) flat, a resale HDB unit, or a private condominium. 

Given the high cost of housing, most buyers will need to finance their purchase with either an HDB loan or a bank loan, each with its own set of rules and benefits. That’s why it’s important to understand how the application process works, what makes you eligible, and what documents you’ll need to prepare. Knowing these details upfront can make the entire journey smoother, and help you make smarter, more confident decisions.

What to sort out before starting your loan application

Applying for a mortgage starts well before you fill in any forms. Here’s what to consider first:

• Check if you’re eligible for a loan. 

This depends on your income, age, citizenship, and the type of property you're buying. For HDB flats, you’ll need to meet criteria for an HDB loan. For bank loans, your Total Debt Servicing Ratio (TDSR) and, for HDB flats, Mortgage Servicing Ratio (MSR) will apply. Your credit score, which you can check via Credit Bureau Singapore, also plays a key role.

Bank loan approval will depend on your Total Debt Servicing Ratio (TDSR). The TDSR limits your total monthly loan repayments — including home, car, personal, and student loans, as well as credit card instalments — to 55% of your gross monthly income. For example, if you earn S$10,000 a month, your total loan repayments can’t exceed S$5,500. However, for those with variable income (like commission-based earners), a 30% haircut applies, reducing your effective income to S$7,000 — meaning your repayment limit drops to S$3,850. This makes it essential to factor in all existing debts when planning for a home loan.

The Mortgage Servicing Ratio (MSR) applies only to loans for HDB flats and executive condominiums (ECs) still within their Minimum Occupation Period, and is capped at 30% of your gross monthly income. This means your total monthly property loan repayments cannot exceed that limit. Since the MSR is also counted within the broader Total Debt Servicing Ratio (TDSR), having existing debts can further reduce how much you’re allowed to borrow for a home loan — leaving less room within the 30% MSR cap. As a result, it’s important to manage your overall debt levels before applying.

» Find out if 2025 is a good time to buy a house 

• Understand your loan options. 

There are fixed-rate and floating-rate packages, and many banks now offer Singapore Overnight Rate Average (SORA)-based loans. These have different risks and benefits, and banks like DBS and OCBC offer tools to compare packages. 

A fixed-rate package locks in your interest rate for a set period (usually two to five years), offering stability in monthly repayments. Floating-rate packages, on the other hand, fluctuate with market conditions. SORA-based loans are a common example — they’re tied to an average interest rate derived from overnight interbank lending in Singapore. 

In short, fixed-rate loans offer peace of mind, while floating or SORA-based loans provide flexibility and potentially lower costs — but with more risk of fluctuation.

» Do your sums for how much loan can I get from a bank in Singapore? 

• Work out your budget. 

Before applying, use mortgage calculators to check how much you can borrow, how much your repayments will be, and what you’ll pay in total interest over time.

• Get In-Principle Approval (IPA). 

An In-Principle Approval, or IPA, is a non-binding agreement from the bank stating how much you’re eligible to borrow, based on your income, credit history, and other financial details. IPAs are not legally binding and hence don’t guarantee the loan, but they do give you a clear sense of your borrowing limit — which is especially useful when you're house-hunting. 

With an IPA in hand, sellers and property agents are more likely to take you seriously, as it shows you're financially prepared and ready to make an offer. An IPA typically remains valid for 30 to 90 days, giving you time to search for the right property with confidence and negotiate from a position of strength.

• Compare bank loan packages. 

Buying a home is a big investment, so it’s worth taking the time to compare offers across different banks. Beyond just the interest rates, pay attention to features such as legal fee subsidies, which can lower your upfront costs, and early repayment options, which give you more flexibility if you want to pay off your loan faster. 

Some banks may also waive penalties for refinancing after the lock-in period or offer more favourable repricing terms. Even small differences in terms and fees can translate into significant savings over the life of your loan, so don’t just go for the lowest rate — look at the full package.

» Learn how to get mortgage preapproval in Singapore

The home loan process explained in 5 simple steps

Once you’re ready, here’s what the typical mortgage journey looks like in Singapore. 

However, do be prepared to spend some time and effort on this. Normally, the whole process takes from 1-2 months, but it can go longer depending on how quickly you submit your documents or how many others are applying. The best advice is to not do anything in haste, and have a good timeframe in which to work.

1. Complete your home loan application

You can apply either online or in person at most major banks. You’ll need to decide between an HDB housing loan (if eligible) or a bank loan.

Then, provide your personal details and financial information, and submit the required documents. These typically include:

• A copy of your NRIC

• CPF contribution history (last 12 months)

• Latest three months’ payslips

• Most recent Notice of Assessment (NOA)

• Option to Purchase (OTP) for private property

• HLE letter if you're taking an HDB loan

• IRAS property tax bill or tenancy agreement (if needed)

» Compare getting a bank loan for HDB vs a HDB housing loan

2. Review the bank’s offer

Once your application is processed, you’ll get a Letter of Offer from the bank. This outlines the loan amount, interest rate type, lock-in period, repayment schedule, and any legal or valuation subsidies.

It’s worth comparing offers from different banks. Look out for clauses on early repayment, repricing, and any fees that may apply if you switch packages later on.

3. Loan goes into processing mode

After you accept the offer, the bank begins processing your loan. This includes a property valuation (especially for resale or private units), legal checks, and coordination with your lawyer and the seller’s representatives.

Make sure to submit any additional documents promptly to avoid delays in approval or disbursement.

4. Underwriter checks your file

At this stage, the bank’s underwriter verifies your income, outstanding loans, and overall credit profile. TDSR and MSR calculations ensure that your borrowing is within regulatory limits.

If anything doesn’t match up — or if more details are needed — the bank might ask for clarification. There’s a chance your loan amount could be adjusted based on risk assessment.

5. Your loan gets the green light

Once approved, your lawyer will handle the disbursement of funds. This goes to the HDB or the seller, and your monthly repayment schedule begins.

If you’re using CPF, it’ll automatically be used to cover monthly instalments (based on your setup). The bank will send you a letter confirming the loan has started, along with your repayment details.

Comparing HDB and bank loans: Key differences

When it comes to downpayment, HDB loans require 20% of the property price, all of which can be paid using CPF Ordinary Account savings. Bank loans, however, require 25% — with a minimum of 5% in cash and the rest via CPF or cash — and do not allow you to retain up to $20,000 in CPF OA, unlike HDB loans.

Interest rates are another key difference. HDB loans have a stable rate of 2.6% per annum, making repayments more predictable. In contrast, bank loans come with fixed or floating rates, often starting lower but subject to market fluctuations, which can lead to higher repayments over time.

Finally, there’s flexibility. HDB loans have no lock-in period, so you can make early repayments or refinance anytime without penalties. Bank loans typically come with a one- to three-year lock-in period and may impose fees for early repayment. You can switch from an HDB loan to a bank loan, but not the other way around.

Using CPF for your home purchase

When using CPF savings to finance your home, it’s important to be aware of two key limits that can affect how much you’re allowed to withdraw: the Valuation Limit (VL) and the Withdrawal Limit (WL).

The Valuation Limit is the lower of your property’s purchase price or market valuation at the time of purchase. This means that if you buy a property for S$500,000 but its market valuation is S$480,000, the VL is S$480,000 — and that becomes the cap on how much CPF you can use for the property. This includes the amount used for downpayment, monthly instalments, legal fees, and stamp duties. Once you’ve hit this limit, you can’t automatically continue using CPF savings unless you meet further criteria.

That’s where the Withdrawal Limit comes in. You can use up to 120% of the VL, but only if you have set aside your Basic Retirement Sum (BRS) in your CPF account — either in your Special Account or Retirement Account. If you haven’t set this aside, you’ll need to make up the difference in cash, which can catch some buyers off guard if they’re not prepared for the shift.

Being aware of these limits ensures you won’t be unexpectedly cut off from using CPF — and helps you preserve your retirement savings at the same time.

» Explore the pros and cons of paying for your home loan in cash