MSR limits the portion of your monthly gross income that can go toward mortgage repayments for HDB and executive condominiums. Capped at 30%, it ensures responsible borrowing—for example, with a $4,000 income, your mortgage repayment cannot exceed $1,200. This safeguard helps keep your home purchase within manageable means.

Unlike MSR, which applies only to HDB and EC purchases, the Total Debt Servicing Ratio (TDSR) applies to all property types, including private homes. It limits your total monthly debt obligations—including mortgages, car loans, credit card bills, and personal loans—to no more than 55% of your gross monthly income. TDSR helps ensure that borrowers maintain healthy debt levels across all financial commitments.

The LTV ratio defines how much you can borrow relative to your property’s value, acting as a safeguard against over-leveraging.

• For HDB Concessionary Loans (applicable to BTO, SBF, ROF, and resale flats), the maximum LTV is 90% of the lower of the property value or purchase price.
• For bank loans, the maximum LTV is 75%—if you have no existing home loan. Of the remaining 25%, at least 5% must be paid in cash, while the remaining 20% can be covered by cash or CPF Ordinary Account (OA) savings.

HDB offers eligible buyers a housing loan at a concessionary interest rate, pegged at 0.1% above the CPF Ordinary Account interest rate, currently at 2.60% p.a. While this rate may be higher than some bank loans (especially floating rate packages), the key advantage is a higher Loan-to-Value (LTV) ratio of up to 90%, significantly reducing the upfront cash needed for your downpayment.

To apply for an HDB loan, you must first obtain an HLE letter, which confirms your eligibility and outlines the maximum loan amount, estimated monthly installments, and repayment terms.

Key details:

• Validity: 6 months from the date of issue
• Requirements: Assessed based on age, income, and financial position
• When to apply:

1. BTO purchase: Required before flat booking
2. Resale purchase: Required before exercising the Option to Purchase (OTP)

• Apply via the HDB e-Service portal using your SingPass
• Submit required documents in PDF or JPG format (max 5MB each)
• Application is valid for 30 days in draft form
• Once fully submitted, HDB processes your application within 14 working days
• You can track your application on My HDBPage > My Flat > Application Status > HLE

If you don’t meet the criteria for a concessionary HDB loan, your only alternative is a bank loan. However, this requires a higher downpayment of 25%, with 5% in cash and the remaining 20% via CPF-OA or cash.

A fixed interest rate ensures that your home loan rate remains unchanged for a period of 2 to 5 years, depending on your bank’s lock-in terms. This means your monthly repayments stay consistent, allowing for more predictable budgeting and easier cash flow management.

Once the fixed-rate period ends, your loan may shift to a floating rate or increase based on market conditions. When this happens, it’s advisable to reprice or refinance with your bank to secure a more competitive rate.

Floating interest rates are variable rates that fluctuate based on market conditions. In Singapore, they typically come in two forms:

• Board Rates – set internally by individual banks
• SORA Rates – pegged to the Singapore Overnight Rate Average, published daily by the Monetary Authority of Singapore (MAS)

The most widely used benchmark is the 3-month compounded SORA rate. While floating rates may offer lower initial interest, they are subject to changes over time, which can affect your monthly repayments. This option may suit buyers who expect interest rates to fall and are comfortable with some level of risk.

A fixed interest rate keeps your home loan rate unchanged for a period of 2 to 5 years, depending on your bank’s lock-in terms. This ensures consistent monthly repayments, which helps with budgeting and cash flow management.

After the lock-in period, your loan may shift to a floating rate or increase based on market conditions. When this happens, consider repricing or refinancing with your bank to secure more favorable terms.

Floating rates are variable and can change based on market trends. In Singapore, they typically come in two forms:

• Board Rates – set internally by banks
• SORA Rates – based on the Singapore Overnight Rate Average, published daily by the Monetary Authority of Singapore (MAS)

The most common reference is the 3-month compounded SORA rate. While floating rates may offer lower initial interest, they carry the risk of rising over time—making them more suitable for borrowers comfortable with fluctuations in their monthly payments.

To begin, you’ll need to pay a 5% booking fee in cash to secure the Option to Purchase (OTP). Once the OTP is issued, the developer is required to deliver the Sale & Purchase Agreement (S&PA) within 14 days.

You must exercise the OTP within 3 weeks of receiving the S&PA. If you decide not to proceed, 25% of the booking fee will be forfeited, while the remaining 75% will be refunded within 4 weeks.

📘 Tip: Learn more about the process in our guide – “5 Steps Before Exercising the OTP”

Upon signing the S&PA, you are required to pay an additional 15% downpayment within 8 weeks from the OTP date. This can be paid via cash or CPF Ordinary Account (OA).

At this point, you will have covered:

• 5% booking fee
• 15% downpayment
• Total: 20% of the purchase price

You can now proceed to secure a 75% bank loan and settle any applicable stamp duties, including:

• Buyer’s Stamp Duty (BSD)
• Additional Buyer’s Stamp Duty (ABSD) (if applicable)

Once your loan transitions into the Building Under Construction (BUC) phase, funds from your approved home loan are disbursed progressively based on the construction milestones.

As each stage is completed, your loan amount increases accordingly, and so do your monthly repayments. These payments start off lower and gradually rise in tandem with the disbursement schedule.

You might be wondering why it’s necessary to get a Building Under Construction (BUC) loan approved now, especially when the actual disbursement happens progressively. Here are three key reasons:

1. Access to CPF Funds
   An approved BUC loan is required to tap into your CPF Ordinary Account to pay the remaining downpayment beyond the initial 5% booking fee.
2. Future-Proofing Your Eligibility
   Securing loan approval now protects you from potential changes in your financial status—such as job loss or reduced income—that could affect your ability to qualify for a loan later.
3. Lock in Attractive Interest Rates
   Promotional or low variable rates may not last. If you’re satisfied with the current loan packages, getting approval now allows you to lock in these rates before they change.

BUC loans are typically offered as variable rate packages and are committed to the full approved loan amount. For example, if you’ve secured a loan of S$1 million, the bank is contractually obligated to disburse the full amount progressively according to the Progressive Payment Scheme (PPS)—as long as you continue to meet your monthly repayment obligations on time.

🔁 Conversion Options

Most BUC loans offer conversion flexibility, allowing you to switch to newer promotional or fixed-rate packages—especially after the Temporary Occupation Permit (TOP) is issued.

This is valuable because promotional rates typically last for the first 3 years, after which they revert to higher standard rates. If your property hasn’t reached completion by then and you’re not eligible to refinance, converting to a more favorable package helps lower your interest costs.

Most banks offer up to two free conversions over the loan tenure.

🔓 No Lock-in Period

BUC loans generally come with no lock-in period, giving you the freedom to make partial or full repayments at any time without incurring early repayment penalties.

❌ Cancellation Fees

If you cancel your BUC loan before full disbursement, banks typically charge a cancellation fee ranging from 0.75% to 1.5% of the undisbursed loan amount—regardless of property type.

🏗️ Disbursement After TOP

Upon issuance of the Temporary Occupation Permit (TOP), 25% of the purchase price is disbursed. The remaining 15% is released in stages based on whether the Certificate of Statutory Completion (CSC) or property title is issued first:

If title is issued before CSC: 2% → 8% → 5%

If CSC is issued before title: 8% → 5% → 2%