Home Loans Made Clear

Compare mortgage rates, understand CPF rules, and find the right home loan before you commit.

What is a Home Loan?

A home loan (or mortgage) is a secured loan used to purchase or refinance a residential property. The property serves as collateral. In Singapore, home loans are offered by banks and — for HDB flats — the Housing & Development Board (HDB). Repayment periods range from 5 to 30 years, and the interest structure can be fixed, floating, or a combination of both.

Buying an HDB flat

Private condo or landed

Refinancing an existing loan

In-principle approval (IPA)

Fixed vs Floating Rate: Which Should You Choose?

Fixed rate packages lock your interest rate for a set period — typically 1 to 5 years. Your monthly instalment stays predictable during this window, regardless of market movements. After the fixed period, the loan usually reverts to a floating rate.

Floating rate packages are pegged to a benchmark — historically SIBOR/SOR, and now SORA (Singapore Overnight Rate Average) following MAS's transition. Floating rates move with market conditions: you benefit when rates fall, but face higher payments when they rise.

How to decide: If you value certainty and are on a tight budget, a fixed rate provides stability. If you expect rates to fall, or plan to refinance after the lock-in period, a floating rate may offer long-term savings.

Eligibility & Key Limits

Singapore home loan eligibility is governed by MAS regulations covering income, existing debt, and property type.

Total Debt Servicing Ratio (TDSR): all monthly debt obligations ≤ 55% of gross monthly income
Loan-to-Value (LTV): up to 75% for first bank loan; 55% for second property
HDB loans: up to 80% LTV for eligible buyers using HDB concessionary rate
Minimum 5% cash down payment required; balance can be funded via CPF OA
Minimum age 21; maximum loan tenure typically ends at age 65–75 depending on lender
Additional Buyer Stamp Duty (ABSD) may apply for non-first-time buyers and foreigners

CPF usage for home loans is subject to CPF Board rules and Valuation Limit (VL) restrictions. Check with your CPF agent before assuming full CPF coverage.

Using CPF for Your Home Loan

You can use CPF Ordinary Account (OA) savings to fund:

The down payment (after the mandatory 5% cash portion)
Monthly mortgage instalments
Stamp duties and legal fees

However, CPF usage is capped at the Valuation Limit (VL) — the lower of the purchase price or market valuation. Beyond the VL, you must continue repayments in cash. The Withdrawal Limit (WL) is 120% of the VL.

When you sell the property, CPF funds used (plus accrued interest at 2.5% p.a.) must be refunded to your CPF account before you pocket any proceeds.

When to Refinance Your Home Loan

Refinancing means switching your existing home loan to a new lender (or a new package with the same bank). The best time to refinance is:

End of the lock-in period — refinancing during lock-in typically incurs a 1.5% cancellation fee
When market rates have dropped significantly below your current rate
When your credit profile has improved — better score = better rate

A general rule: refinancing is worth exploring if you can save at least 0.3–0.5% p.a. in interest, after accounting for legal fees (typically S$1,800–S$2,500) and valuation fees. Lendela's mortgage advisers can run the numbers for your specific loan.

Understanding ABSD

Additional Buyer Stamp Duty (ABSD) is a tax on top of the standard Buyer Stamp Duty (BSD). Rates as at 2024:

Singapore Citizens buying their first residential property: 0% ABSD
Singapore Citizens buying their second property: 20% ABSD
Singapore Citizens buying their third and subsequent: 30% ABSD
Singapore PRs buying their first property: 5% ABSD
Foreigners buying any residential property: 60% ABSD

ABSD is calculated on the purchase price or market value, whichever is higher. It must be paid within 14 days of signing the Sale & Purchase Agreement.

Frequently Asked Questions

What is the maximum LTV for a home loan?

For your first bank loan: up to 75% LTV. For your second property loan: up to 45% LTV. HDB concessionary loans offer up to 80% LTV.

What is TDSR and how does it affect my loan?

Total Debt Servicing Ratio: all monthly debt obligations (including the new mortgage) cannot exceed 55% of your gross monthly income. This limits how much you can borrow.

Can I use CPF for the down payment?

Yes, but you must first pay at least 5% in cash. The remainder of the down payment (up to the CPF Valuation Limit) can come from your CPF OA.

When should I refinance?

Typically when your lock-in period ends, market rates have dropped meaningfully, or your credit profile has improved. Factor in legal fees of S$1,800–S$2,500 when calculating savings.

Do I have to pay ABSD?

Singapore Citizens buying their first residential property are exempt from ABSD. PRs pay 5% on their first property. Foreigners currently pay 60% on any residential purchase.

What is an In-Principle Approval (IPA)?

An IPA is a conditional letter from a bank confirming how much they are willing to lend you, based on a preliminary assessment. It is not a final loan offer but is widely accepted by property agents and sellers as proof of financing ability.

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