Home Loan Guide
Looking to buy your dream home or thinking of refinancing your property? We are here to help! Check our one stop guide for all your home financing needs.
Disclaimer: This landing page was created in collaboration with Mortgage Master.
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What is a Mortgage Loan in Singapore?
When it comes to buying property in Singapore, there’s a high chance that you might not have enough to pay everything up front. Thus, you might need to borrow money to pay for the property. This financial arrangement is called a mortgage/home loan where you obtain money from the Housing and Development Board (HDB) or a bank to cover a significant portion of the property's cost.
HDB and Private Property Loan Calculator
Speaking of cost, check out this mortgage calculator from Mortgage Master to calculate your total payment amount, monthly payments and interest paid over the home loan:
Key Features of a Home Loan: Loan to Value Singapore and More
The key features of a mortgage loan in Singapore include:
How to Pick the Best Home Loan for You?
Now that you understand home loans better here’s how to pick the best home loan for you!
HDB Loans vs Bank Loans
Bank Loan for HDB Explained: HDB Bank Loan Interest Rate and More
Private Property Loan / Bank Loan for Private Property Explained
Find the Best Home Loan on the Market: Standard Chartered Singapore Home Loan and More
Home Loan Application Guide: How to Nail Your Online Home Loan Application
If you are ready to apply here’s a one-stop guide to helping you find the best home loan for you.
Step 1
Find the Best Home Loan on the Market
Step 2
Talk To The Experts for Guidance and Better Rates
Step 3
Apply for Your Home Loan
Find the Best Home Loan on the Market: Standard Chartered Singapore Home Loan and More
For that, you can simply use the Mortgage Comparison Tool by Mortgage Master above. That is where you can get a Standard Chartered housing loan, DBS housing loan and more.
Compare mortgage loan
Talk To The Experts for Guidance and Better Rates
If you’ve read all this and are still unsure about the home loan process or your refinancing options, Mortgage Master’s home loan mortgage specialists are here to help. Drop them a message and they will assist you with finding the best home loan with the lowest rates and walk you through the whole application process i.e. apply for an in principle approval (IPA) etc. They will also address any of your questions and offer impartial advice.
Contact a Mortgage SpecialistApply for Your Home Loan
After obtaining your IPA, you can proceed to apply for your home loan. Mortgage Master’s experts will guide you through this last step!
That's not all. If you would like to learn more about home loans here are some additonal terms you need to know.
Singapore Housing Loan Interest Rate History: Understanding SORA Interest Rates
SORA is the volume-weighted average rate of all unsecured overnight interbank SGD transactions brokered in Singapore made between Singapore banks.
The interest benchmark is rather transparent as MAS has been publishing the SORA rate daily since 1 July 2005 by 9.00am on the next business day in Singapore.
The report from the three industry groups entitled Sibor Reform and the Future Landscape of SGD Interest Rate Benchmarks has stated that the transition to SORA is a win-win for borrowers and lenders. Speaking of SORA, here is what you need to know about this important interest rate benchmark.
For borrowers, the loan market pricing will be more transparent. Whereas for lenders, SORA will help them manage risk more effectively.
Also, the report mentioned that compounded SORA rates are actually backwards-looking overnight rates. These rates are said to be generally more stable in comparison to the popular forward-looking term rates for SIBOR pegged loans.
"Comparing SORA products with other home loans available in the market has become simpler, ultimately providing borrowers with an advantage when making long-term financial decisions."
Fixed vs Floating Home Loan Packages
A fixed rate home loan has a fixed interest rate throughout its offered duration, whereas a floating rate loan sees its interest rate fluctuate over the loan's duration based on the benchmark reference rate.
Since a fixed rate loan offers borrowers predictability in their monthly payments, it usually comes with a higher interest rate compared to the prevailing floating rate. This type of loan proves advantageous in a rising interest rate environment because borrowers can 'lock-in' a rate and avoid paying higher interest if rates continue to climb.
In contrast, a floating rate mortgage is linked to a benchmark reference rate, which means borrowers to be ready for potential changes in this reference rate. When the benchmark rate increases, your monthly payment will also go up. Conversely, if the reference rate decreases, your monthly instalment will likewise decrease. Floating rates often result in lower monthly payments compared to fixed rate packages, making them more affordable. However, the trade-off is the lack of certainty regarding your future repayment amounts due to the variable nature of interest rates.
Home Loan Repayments and Ideal Loan Duration
There is no ideal loan duration for everyone. But a critical decision a prospective homeowner must make is to choose between a shorter or longer loan tenure. Based on the numbers alone, it would be hard to tell which is the better option.
Generally, if circumstances are almost perfect, a shorter loan tenure is usually the better option if you can afford it. To help you make a better financial decision, check out our thorough comparison of a shorter or longer home tenure:
