Home Loan Mastery Guide
Complete guide to securing the best home loan in Singapore. Master SORA vs fixed rates, TDSR calculations, and refinancing strategies.
What You'll Learn
Fundamentals
- • SORA vs Fixed Rate Comparison
- • TDSR and LTV Requirements
- • HDB Loan vs Bank Loan
- • Interest Rate Structures
Advanced Strategies
- • Refinancing Optimization
- • Rate Lock-in Analysis
- • Package Deal Evaluation
- • Cost-Benefit Analysis
Understanding Home Loan Types
SORA-Based Loans
Singapore Overnight Rate Average (SORA) loans offer variable rates tied to market conditions.
Fixed Rate Loans
Fixed rates provide certainty for a specific period, typically 1-5 years.
Current Market Rates (September 2025)
SORA-Based Rates
Fixed Rates
TDSR and LTV Requirements
Key Ratios Explained
Understanding TDSR (Total Debt Servicing Ratio) and LTV (Loan-to-Value) is crucial for loan approval and optimal financing.
TDSR Calculation
TDSR = (Total Monthly Debt Obligations ÷ Gross Monthly Income) × 100%
Includes:
- • Proposed mortgage payment
- • Existing loans (car, personal, etc.)
- • Credit card minimum payments
- • Other property loans
LTV Requirements
Property Value Thresholds:
- • ≤ S$1M: Higher LTV allowed
- • S$1M - S$1.5M: Standard LTV
- • >S$1.5M: Lower LTV (55-65%)
HDB Loan vs Bank Loan Comparison
| Feature | HDB Loan | Bank Loan | Winner |
|---|---|---|---|
| Interest Rate | 2.6% (Fixed) | 3.45% - 4.30% (Variable/Fixed) | HDB Loan |
| Maximum LTV | 80% (First-timer: 85%) | 75% (First-timer: 80%) | HDB Loan |
| Loan Tenure | Up to 25 years | Up to 35 years | Bank Loan |
| Processing Time | 2-4 weeks | 2-3 weeks | Bank Loan |
| Refinancing Options | Limited | Flexible | Bank Loan |
Recommendation Framework
Choose HDB Loan If:
- • Rate stability is your priority
- • You want maximum LTV
- • Simple, straightforward financing
- • First-time home buyer
Choose Bank Loan If:
- • You want lower interest rates
- • Flexibility for refinancing
- • Longer loan tenure needed
- • Package deals with banking services
Refinancing Strategies
When to Refinance
Refinancing can save thousands in interest, but timing and execution are crucial for maximizing benefits.
Rate Differential
Consider refinancing when new rates are at least 0.5% lower than your current rate.
Break-even Analysis
Calculate when savings exceed refinancing costs, typically 2-3 years for optimal timing.
Lock-in Considerations
Factor in penalty fees if refinancing within lock-in periods, usually 1-5 years.
Refinancing Checklist
Before Refinancing
- Review current loan terms and rates
- Calculate remaining principal and tenure
- Check credit score and income stability
- Research market rates and packages
During Process
- Compare total cost, not just interest rates
- Negotiate package deals and waivers
- Time application to avoid rate increases
- Ensure seamless transition between loans
Expert Tips & Strategies
Rate Lock Strategy
Consider shorter lock-in periods (1-2 years) in rising rate environments, longer periods (3-5 years) when rates are expected to increase.
Package Optimization
Bundle home loans with salary crediting, insurance, and investment products for better rates and fee waivers.
Prepayment Strategy
Use bonuses and windfalls for loan prepayments, especially in high-rate periods. Consider opportunity cost vs guaranteed savings.
Negotiation Tactics
Use competing offers as leverage. Banks often match or beat competitor rates for customers with strong profiles.
Your Next Steps
Calculate Your Capacity
Use our TDSR calculator to determine your borrowing capacity and optimal loan amount.
Calculate Now →Compare Current Rates
Review the latest home loan rates and packages from all major Singapore banks.
Compare Rates →Get Expert Advice
Consult with mortgage specialists for personalized recommendations based on your situation.
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