How to Get a Mortgage in Singapore

Home ownership is a coveted milestone for all, especially in land-scarce Singapore, where housing costs can be sky high. Here we walk you through the whole process, from submitting your application, to receiving the green light from your lender. 

1. Assess your financial status

Your financial situation will determine if you are eligible for a HDB or bank loan. For example, if you’re a single eyeing a resale flat in historic Tiong Bahru, you’re only eligible for a loan if you’re a Singapore citizen and earn a maximum of $7,000 monthly. Those who own or have disposed of private property in the last 30 months are not eligible. The same goes for anybody who has more than one hawker or market stall, or any other type of commercial or industrial property.

In Singapore, lenders heavily prioritise prospective borrowers with a low debt-to-income (DTI) ratio, which is an indication of an individual’s ability to manage debt against their income. Those with higher DTI ratios typically encounter higher interest or rejection rates, while others with lower DTI ratios enjoy favourable rates.

Another factor that lenders will look at is your Total Debt Servicing Ratio (TDSR), which calculates how much of your income goes toward repaying existing loans. The current cap imposed by the Monetary Authority of Singapore currently sits at 55%, which helps to ensure that people don’t borrow beyond their means. 

Lastly, we have the Mortgage Servicing Ratio (MSR), which tells financial institutions how much of your gross monthly income is used to pay property loans—including any you may be currently applying for.

>>  MORE: Plan your finances with the mortgage calculator

2. Find the right mortgage for you

Is your dream home a HDB flat in the heartlands or a private condominium nestled in the city centre? Your answer will determine what type of mortgage is right for you. 

HDB loans

Most people who buy a HDB flat will take out some kind of loan to finance their flat. However, not everybody is eligible for a HDB loan. Aside from criteria like citizenship status and lack of private property ownership, HDB also has an income ceiling for various groups like singles, families and extended families ranging from $7,000 to $21,000. The Ministry of National Development recently eased income assessment rules for younger couples, who can now choose to delay their income assessment until their key collection date. This will mean an increase in couples who will be eligible for higher loan amounts.

>>  MORE: Condo downpayments: How much do you need?

Bank loans

Bank loans have less restrictions than HDB loans. They also provide lower interest rates, although these favourable rates may only be valid for a few years. It’s important to remember this to avoid being locked into a situation where you’re stuck with unfavourable rates for decades. Unlike HDB loans which let you utilise your CPF to pay your downpayment in full, your bank will require 5% in cash upfront. This can make HDB loans significantly more attractive—that is, if you meet the qualifying criteria. 

>>  MORE: Is this a good time to buy a house?

Private property loans

Private property loans are a type of bank loan tailored exclusively to private property buyers. Most major banks in Singapore, like DBS, UOB and RHB offer private property loans with lock-in periods of 2-3 years. What this means is that interest rates will start low and stay that way until the lock-in period is over. Take DBS’s 2 Year Fixed Package for instance, which has an interest rate of 2.5% for the first 2 years, before rising to 3.73% from Year 3 onwards.

>>  MORE: Best home loans of 2025 in Singapore

Fixed or floating rates

Let’s take a closer look at bank loans. When shopping around for bank housing loans, you may have come across various fixed and floating rate bank loans. While fixed rate bank loans are exactly as described, with interest rates that are set for the lock-in period of your loan, floating rate bank loans have interest rates that fluctuate. 

So, how do banks determine the interest rate for their floating rate loans? Well, that depends. Banks offering Singapore Overnight Rate Average (SORA) packages peg their rates to an industry reference rate which changes according to the market. Banks offering Singapore Interbank Offered Rate (SIBOR) packages derive their rates from the average rate at which banks loan to each other. Banks offering FHR packages tie rates to the bank’s current fixed deposit rates, which also changes according to the market. 

But why would anybody choose loans with fluctuating interest rates? The reason lies in the fact that floating rates tend to be cheaper, though this advantage comes with the caveat that your rate can vary on a monthly basis. 

>> MORE: How to refinance your home loan

Mortgage terms and tenures

Because home loans can last anywhere from 25-30 years, taking out a mortgage is a serious long-term financial commitment. Financial institutions use the loan-to-value (LTV) limit to determine the maximum amount a borrower can take out for a housing loan. Your age directly impacts the LTV, since a lower limit is imposed on you once you are 65 years old. If you buy a house at age 40 and finance it with a 30-year mortgage, your tenure will only end when you are 70. This will result in your LTV being lowered from 75% to 55%, which can severely impact the affordability of your home. 

If you’re aiming to buy a HDB flat, you’ll also have to factor in your Mortgage Serving Ratio (MSR). This rule applies regardless of whether you’re financing your flat with a bank loan or a HDB loan and limits monthly repayments to 30% of your gross monthly income. 

>> MORE: How much downpayment do you need for your HDB?

3. Research lenders you’re eligible for

Before you commit to buying that quirky 40-year old flat in a heritage neighbourhood, or that private condominium surrounded by greenery, do some research on lenders. Important factors to consider include the lock-in period, additional fees, tenure, monthly repayments, and of course, interest rates.

4. Get your In-Principal Approval

Getting pre-approved for your home loan involves clinching an In-Principle Approval (IPA) from your lender. This is an agreement outlining your ability to borrow, based on their assessment of your financial status. This can help streamline your mortgage application process once you've zeroed on your forever home, as it shows sellers that you are serious about your purchase.

Want to make a more informed decision? Score an IPA from 3 different lenders so you can compare more or less confirmed rates.

5. Get your documents ready for submission

Are you the sort of person who files everything alphabetically or do you only scrounge around for your documents when you need them? Regardless of which category you belong to, you'll need to produce official documents that prove your identity and financial data when it's finally time to submit your application, such as:

• Latest computerised payslips for the last 3 months

• Latest CPF contribution history over a 12-month period

• IRAS Notice of Assessment over a 1-2 year period

• Front and back of your NRIC or passport

• Proof of existing loan obligations, if any for the evaluation of your current debt commitments

If the bank or your assigned HDB case officer thinks that they don’t have enough information on hand to make a decision, they may ask you for more documentation.

6. Wait for your lender’s decision

Whether you're borrowing from HDB or your financial institution of choice, an underwriter will be assigned to conduct a detailed analysis of your financial situation. They will weigh your credit history, income, and employment history against the value of the property you wish to purchase, and eventually decide how much you can borrow—based on TSDR and if applicable, MSR calculations.

As you wait, why not take a look at what home insurance options are available? After all, the legally mandated HDB Fire Insurance only provides coverage for structural damage caused by a fire. This means you still need adequate home insurance to cover the contents in your home! Check out our lineup of the best home insurance options available in Singapore.

>>  MORE: Are you financially ready to buy a house?

7. Closing costs and follow-up questions

While your lender conducts a thorough assessment of your financial status, they may contact you with follow-up questions or ask your questions on the documents you have submitted. It's important to have all relevant details on hand, to prevent any delays in approval.

This is a good time to prepare for closing costs, which consist of legal fees, stamp duties, valuation fees and other administrative charges. In total, these charges can range from 2-3% of the property's price.

8. Get your green light

Once you receive your Letter of Offer from your bank, it will be valid for a period of 30 days. Your bank will also send you a letter confirming that your loan period is now in effect, along with your repayment details. If you're buying a flat, you can request a Letter of Offer on the HDB portal if your bank is among HDB's participating financial institutions. This will optimise the process and help you save time.

>>  MORE: Bank loans vs HDB loans: What’s the difference?