Sim Lim Tower, 10 Jalan Besar Sim Lim Tower #01-01, 208787

Apply for Mortgage Loan in Singapore

In our country, terms such as “mortgage loan”, “private home loan” or “housing loan” are used interchangeably, and they refer to the same type of financial package provided by mortgage specialists.

What Is a Mortgage Loan?

A mortgage home loan is a type of financial package that can be provided by both banks and private financial institutions and is structured based on loan-to-value limits and the affordability of the borrower. It is designed for the purchase of residential properties, such as HDB flats or landed homes, in which the house itself can be utilised as collateral for the provided credit. Mortgage loan eligibility can depend on your credit profile, income stability or the Debt Servicing Ratio Limit.

When obtained from mortgage specialists, mortgage loans can have a repayment period that will stretch upwards of 30 years, and their conditions will depend on the lending agency and the overall financial profile of the borrower. As the borrower, you repay the mortgage home loan each month via instalments that include both mortgage home loan interest rates and principal, accumulated over a previously agreed tenure.

Mortgage Loan Options in Singapore

HDB and Private Property Loan Options

In Singapore, a mortgage loan can be applied for the purchase of many different types of properties, including private condominiums, landed homes, or, the most common option, HDB flats, which account for approximately 75% of Singapore’s residential house stock.

For HDB flats and executive condominiums before privatisation, housing loans are bound by the Mortgage Servicing Ratio, which caps the monthly repayments of the borrower at 30% of their total gross monthly income.

That said, when securing a private home loan for an HDB property, borrowers must also pass the Debt Servicing Ratio Limit framework, which is capped at 55%. For private properties, private borrowers, regardless of which financial institution they choose, must only pass the TDSR. But for HDB flats and ECs, it’s both the Total Debt Servicing Ratio and MSR.

Traditional Mortgage Packages

Licensed Moneylender Financing Support

Apart from the traditional financing aid provided by banks, borrowers might also explore the alternative mortgage loans provided by private lending agencies, such as we, at Monetium Credit. Private lenders do not provide traditional home loans.

With that being said, we can help with bridge loans, we can cover your most urgent financing needs, and we can provide you with supplementary borrowing help that will hopefully be enough for you to make the best financial decision for your family.

Mortgage Loan Rates: Fixed, Floating and SORA

Fixed vs Floating Mortgage Rates

Fixed mortgage rates remain unchanged for fixed periods or the entire duration of the loan, and they represent perhaps the most stable mortgage solution available for Singapore borrowers. These types of packages provide protection against increases in interest rates caused by external factors, and they are characterised by predictable monthly repayment terms. Floating rates, on the other hand, are influenced by market conditions, and the interest rate we associate with them can fluctuate.

SORA and Home Loan Rates

The SG overnight average rate is the default interest rate used in Singapore’s financing world. It replaced older, phased-out interest rate benchmarks such as SIBOR, and it represents the volume-weighted average of the financial transactions applied in the SGD interbank market between 8 AM and 6:15 PM. Many, if not most, floating-rate mortgage packages are now SG overnight average rate-linked, which means that monthly repayments are adjusted based on the interbank transactional average rate.

Comparing the Full Loan Cost

One mistake to avoid when comparing mortgage options is focusing solely on the home loan rates associated with the selected financial aid packages. The total cost will include the administrative fee of the credit, which will be a fixed percentage of the principal, legal fees, lock-in periods, or even potential refinancing costs. Home loan rates are just a piece of the puzzle, and to get a comprehensive look at the mortgage structure, borrowers need to ensure they look at the long-term financial gains, not just at short-term savings.

Borrowing Capacity

The total borrowing capacity of Singaporean debtors is dictated and subsequently regulated via three main financial frameworks:

Mortgage Loan Eligibility

Who Can Apply?

Mortgage loans are available to:

Singaporean Citizens
permanent residents of our country
foreigners with a valid work visa

Eligibility for the mortgage loan will vary from lender to lender and will depend on the borrower’s:

current income level
employment status
credit history
the type of property for which the loan will be used

Documents Needed

The full document list necessary for the loan approval will depend on the conditions imposed by the lender. That said, as a general rule, most banks and financial institutions might ask you to present the following papers:

A copy of your NRIC
A valid work pass, if you are applying as a foreigner
Proof of your current residency
Your latest pay slips, Central Provident Fund contribution history, or IRAS Notice of Assessment
Property documents, such as OTP agreements or HDB approval papers
Credit Bureau report, although banks will pull this directly from the CBS.

Mortgage Calculator

A mortgage calculator is a useful tool for assessing the affordability of a mortgage loan before you commit to signing a contract with a financial institution or a private bank. A tool like this can help you estimate the monthly repayment terms associated with the loan, based on the interest rate, loan tenure and whether you went for a flat rate or a floating one. It’s a way to simulate the loan, and therefore, it can be useful for comparing different financial situations.

New Purchase, Refinancing and Repricing

Making a New Property Purchase

When taking a mortgage loan to purchase a new property, the main consideration for most borrowers is related to:

Regulatory limits, such as TDSR and MSR
Affordability in accordance with current wages

In Singapore, for private condominiums, HDB flats, and any other types of properties listed for sale on the real estate market, banks assess mortgage eligibility based on the Total Debt Servicing Ratio applicable to the borrower.

If the repayment of the mortgage package will take your Debt Servicing Ratio limit above 55%, you could be rejected. Meanwhile, for HDB flats, you will also need to keep your repayment under 30% of your gross monthly wage, so as to fall in line with the MSR. As for the down payment, most purchases require 25%.

Refinancing vs Repricing

Refinancing involves switching your mortgage loan from your current lender to another one, which should provide slightly better home loan rates or a more advantageous payment framework. Refinancing can include legal and administrative costs to consider, but in the long term, it can either produce long-term financial savings or reduce your total monthly payment obligations.

Repricing, on the other hand, means to adjust the current terms of your mortgage loan, while keeping the mortgage package with the current lender. It’s a simpler process, and it’s more straightforward to implement, as you don’t have to worry about changing loan providers. As for what changes can be implemented, you can, for example, go from fixed mortgage rates to variable ones, tied to the SGD Overnight Rate Benchmark.

How Monetium Credit Can Help with Mortgage Loan Needs

Monetium Credit is a licensed moneylender, one of the only 153 such agencies licensed to operate in Singapore. We are not a bank or a traditional provider of mortgage packages, and this is an important distinction, as conventionally, a home loan would typically be provided by a bank or a financial institution. We are not mortgage specialists, but with that being said, we do have the financial assets to assist borrowers who need support related to property ownership.

At Monetium, we can help borrowers manage down payments, alleviate the costs of renovation work, and aid with temporary cash management challenges. From Orchard Road to Bukit Timah and River Valley, our lending agency is prepared to collaborate with clients all over Singapore, and we are open to finding solutions even for borrowers with somewhat unfavourable credit score situations.

We can help borrowers explore suitable financial support related to mortgage loan needs or property-related costs, and our services are characterised by fast processing times and flexible repayment terms. We are not traditional providers of mortgage loans, so we cannot realistically call ourselves mortgage specialists. That said, we can assist you with personal financial packages that will aid with your mortgage loan repayment, and we can provide transparent lending support within the scope of licensed moneylending services in Singapore.

Contact Monetium Credit’s Team of Professionals

Contact our team of professionals for the best loan offer.

Common Mistakes to Avoid Before Choosing a Mortgage Loan Support

✻ Focus Only on the Advertised Interest Rate

One big mistake is to consider only the advertised interest rates without accounting for administration fees, lock-in periods, refinancing costs, and other fees that will add up to the total repayment.

✻ Overlook the True Cost of the Loan

The advertised rate can be misleading, as it often presents a “best-case scenario” that’s typically reserved only for borrowers with higher monthly gross wages and flawless credit. Plus, the advertised rate often only reflects the base interest, while the actual APR of the loan will likely include other costs.

✻ Underestimate the Impact of Loan Tenures

Even if the APR is lower in the case of a 30-year mortgage loan, the total interest paid over the duration of the loan might be greater than it would be for a loan with only a 25-year repayment period but higher annual fixed interest rates.

✻ Fail to Assess the Full Financial Picture

The right mortgage loans will need to be based on the borrower’s full financial situation, existing debt obligations, risk tolerance, and potential for financial growth modifications.

FAQs About Mortgage Loans in Singapore

Q: Is a Mortgage Loan the Same as a Private Home Loan in Singapore?

Yes, in Singapore, terms such as “home loan” or “mortgage loans” are usually utilised interchangeably, and they refer to a type of long-term financing used in the purchase of domestic-based properties, in which the dwelling itself is used as collateral.

Q: What Is the Best Loan Mortgage Option in Singapore?

There is no single best option. The best available deal will depend on the borrower’s financial profile, whether he goes for a flat rate or a variable one, potentially tied to the overnight rate average, and, of course, on his current credit score. It’s not a given that you can obtain flexible repayment terms, but it depends on the financial institution you apply to.

Q: How Much Can I Borrow for a Mortgage Loan?

How much you can borrow with a mortgage loan will depend on the property financing ratio, the debt servicing cap, and whether your current gross monthly wage allows you to pass the income threshold imposed by the bank or financial institution you’re collaborating with. That said, for a first-house mortgage, you are usually permitted to borrow up to 75% of the property’s value.

Q: Should I Choose Fixed or Floating Mortgage Rates?

It depends on what you are looking for. Fixed rates offer stability and predictable repayment terms, while floating mortgages might sometimes be more advantageous, but they will fluctuate with the market conditions. There’s no right or wrong answer when it comes to what rate to choose.

Q: What Is SORA?

SORA stands for the SG Overnight Rate Average and is the benchmark used for pricing a significant number of the floating-rate mortgage aid packages available in our country and provided by banks or financial institutions.

Q: Can I Use the Central Provident Fund for My Mortgage Loan?

Yes, you can use your Central Provident Fund Ordinary Account savings to manage down payments or the monthly repayments associated with the mortgage loan you just contracted.

Q: What Documents Do I Need for A Mortgage Application?

The documents required for a mortgage are not that different from the ones necessary for a personal loan. The bank or financial institution you’re applying to will need your NRIC, income proof, CPF statements, tax records, bank statements and property documents such as an OTP

Q: Can a Licensed Moneylender Help with Mortgage-Related Financing Needs?

Yes, but only for short-term financial needs. Licensed moneylenders, like us, at Monetium, do not provide conventional mortgage package loans. That said, we do provide loan assistance, and we specialise in providing personal or business loans, with advantageous interest rates and flexible repayment periods.

Discuss Your Mortgage Loan Needs with Monetium Credit

Understanding the differences between mortgage loan rates, eligibility criteria and repayment structures is absolutely essential before making any type of property financing decision with long-term financial repercussions. Each borrower’s financial situation is different and requires a personalised support structure in order to improve lending conditions.

Monetium Credit can be the solution you require for a regulated lending solution guidance. We can assist you with your queries and provide you with tailored supplementary financing solutions for your mortgage loan.

More Loan Options for You to Choose From

Business Loan

Maximize the potential of your business with our steadfast business loan support that gives you approvals within 24 hours.

Payday Loan

Are you strapped on a budget for the month? Payday Loans are the best solution for you.

Lifestyle Loan

At Monetium Credit, our lifestyle loans are designed to turn your dreams into possibilities.

Renovation Loan

Personalize your home into the dream designs that you have dreamt of.

Debt Consolidation Loan

Are you struggling with too many loans? Manage your loans in the most straightforward ways with us.

Mortgage Loan

Planning to purchase a new home, refinance your existing mortgage, or unlock available equity from your property?

Latest Newsroom Articles by Monetium Credit

Stay informed with Monetium Credit’s Newsroom – your go-to source for the latest updates, tips, and insights on all kinds of loans
and personal tips! We update regularly, so be sure to check back often.

Do You Need Collateral for a Personal Loan in Singapore? Secured vs Unsecured Loans Explained

AllPersonal Finance