A home loan should fit your household when the rate changes or one income stops. A low opening rate helps, but it does not tell you whether the loan is affordable after its fixed period, how much cash you need before completion, or what it costs to leave the package.
This Singapore mortgage guide was checked on 19 September 2026. It uses hypothetical repayment scenarios, not live bank quotations or interest-rate forecasts. The featured photograph shows The Interlace, a private residential development, for housing context.
Start with the payment you can sustain
Before comparing packages, write down your take-home income, regular household spending, existing debt repayments and the cash you want left after buying. Include childcare, support for parents, insurance, transport and an allowance for repairs. Add property tax and maintenance separately from the mortgage.
Then run the same budget with a higher interest rate and with one salary temporarily removed. A bank’s approval is a lending decision. Your own budget also has to accommodate the way your family actually lives.
| Assumed annual rate | Monthly repayment | Extra versus 2% |
|---|---|---|
| 2% | S$3,391 | Baseline |
| 3% | S$3,794 | S$403 |
| 4% | S$4,223 | S$832 |
| 5% | S$4,677 | S$1,286 |
LovelyHomes calculations use a fully disbursed loan, 300 equal monthly payments and a monthly interest rate of the annual rate divided by 12. Each row starts with the same balance and remaining term. Figures are rounded to the nearest dollar; fees and insurance are excluded. These are scenarios, not available loan offers. A later reset uses your balance and remaining tenure at that time.
Suppose the household allocates S$2,500 of eligible CPF Ordinary Account (OA) savings each month. The 4% scenario still needs about S$1,723 in cash for the mortgage alone. If contributions stop during a career break, an existing OA balance may help temporarily, but the household eventually needs to fund the full instalment unless contributions resume. Count the remaining balance, not just this month’s contribution.
What SORA does, and what your bank adds
SORA is the Singapore Overnight Rate Average, based on overnight Singapore-dollar interbank borrowing transactions. A SORA mortgage commonly uses a compounded reference rate plus the bank’s spread. A quoted spread of 0.70 percentage points is not an all-in mortgage rate. See MoneySense’s explanation of SORA.
A three-month compounded reference looks backwards over an observation period. It does not promise where rates will be three months from now. Check the reference period, reset mechanism, spread for each year and any floor in your offer.
As a concrete example, UOB’s published SORA package, checked on 19 September 2026, shows three-month compounded SORA plus 0.70 percentage points in years one and two, 0.80 in year three and 1.00 from year four. It also states a two-year lock-in and a S$250,000 minimum for the described completed-property package. Availability and final terms depend on the bank’s offer. This is an illustration of how a package works, not a best-rate ranking.
For that example alone, a hypothetical 1.5% reference plus a 0.70-point spread means 2.2% before any relevant contractual provisions. If the reference stayed unchanged when the spread became 1.00, the combined rate would be 2.5%. Both the reference and the spread schedule matter.
Fixed rate and lock-in answer different questions
A fixed rate gives payment certainty for the stated period. A lock-in governs the cost or conditions of leaving or repaying early. A floating package can have a lock-in, and a fixed period does not usually last for the entire mortgage.
Ask for the property loan fact sheet and read it alongside the letter of offer. MoneySense’s home-loan guide explains the distinction between fixed and floating loans, repayment terms and switching. Use the documents to compare:
- The rate during the opening period and the formula immediately afterwards.
- When the fixed period and lock-in each start, particularly if disbursement is progressive.
- Early repayment, sale, cancellation and partial-prepayment charges.
- Notice periods and any legal-subsidy or cash-benefit clawback.
- Conversion options and the actual cost of using them.
A fixed package may suit a family that needs predictable payments during parental leave. A floating package may suit a household with room for payment increases, but a view that rates will fall is not a substitute for a buffer. A planned sale within the lock-in period can outweigh a small opening-rate advantage.
Borrowing limits are ceilings, not entitlements
For bank lending, MoneySense’s borrowing-limit table gives LTV limits of 75% or 55% with no outstanding housing loan, 45% or 25% with one, and 35% or 15% with two or more. The lower tier applies when tenure exceeds 30 years (25 for an HDB flat), or the loan extends beyond age 65. A 75% tier requires at least 5% cash; the other tiers have different cash requirements.
The usual bank TDSR ceiling is 55% of gross income across debt commitments. HDB flats and EC purchases before the EC’s MOP expires also face a 30% mortgage servicing ratio. Ask the lender to assess your income, other debts, tenure and applicable assessment rate before committing.
For an eligible HDB housing loan, use HDB’s current rules: the maximum is 75% of a new flat’s price, or 75% of the lower price or valuation for a resale flat, subject to lease coverage and credit assessment. HDB uses the higher of its prevailing loan rate and a 3% floor to compute eligibility. Its concessionary rate is pegged 0.1 percentage point above the CPF OA rate and reviewed quarterly. It is not contractually fixed for 25 years.
Obtain an HFE letter for the HDB route. If considering a move from an HDB loan to a bank loan, remember that you cannot later refinance that bank loan back to HDB. Compare that lost option as well as the initial rate.
Keep the completion budget separate from monthly affordability
A valuation below your agreed price can increase the funds you must provide. Stamp duty, legal bills, renovation and moving costs also arrive on their own dates. Ask the solicitor for a dated payment schedule and identify which amounts need cash first, which can use CPF and when loan proceeds become available. Do not treat a future sale’s gross price as money already available for your next completion.
CPF usage is subject to property, loan and remaining-lease rules. For a bank-financed property with sufficient lease coverage, usage beyond the lower price or valuation, up to the applicable 120% limit, requires the relevant Basic Retirement Sum to be set aside. Shorter leases can impose a prorated cap that cannot be exceeded simply by meeting that sum. Use CPF Board’s guidance for your circumstances; do not assume every loan has the same limit.
Refinance only after comparing the same debt over the same period
Repricing changes the package with the existing lender; refinancing moves it elsewhere. Request both quotations before a lock-in expires. List legal and valuation charges, administrative fees, penalties, notice requirements and any benefits that must be returned. Deduct confirmed subsidies only after checking their conditions.
Compare interest and fees over the period you realistically expect to keep the loan, using the same opening balance and remaining tenure. A lower monthly repayment achieved by extending the tenure can increase total interest. Principal repayment reduces your debt; it is not itself a financing cost.
For a deliberately simplified screening example, S$2,400 of net switching costs divided by S$150 of estimated monthly interest savings gives 16 months. That is not a final break-even calculation: the balance falls, variable rates change and an early sale may add charges. Ask for the two amortisation schedules and compare the actual period you expect to hold.
Before you sign
Be able to answer three questions in dollars: what must leave your bank account before completion, what the household pays monthly if rates rise, and what it costs to exit when your plans change. If any answer relies on a hoped-for bonus, an unapproved loan or a sale that has not completed, reduce the commitment or resolve that gap first.
For the next step, see our EC versus private condo cost comparison and HDB resale procedure and payment sequence. This guide provides general education; your lender, solicitor and CPF Board must confirm the terms that apply to the actual purchase.