Your guide to understanding home loans

by  Dinna Chan | December 2025 | 6 min read

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Key Takeaways at a Glance

  • Your home can be part of your long-term wealth planning, and not just a roof over your head.
  • Singapore uses strict lending ratios to assess home loan size.
  • Fixed and floating rates suit different investor risk profiles.
  • An IPA (In-Principle Approval) is key to moving quickly in competitive property markets.
  • Citi supports you with insights, options, and personalised lending advice.

Introduction

Buying a property in Singapore — whether for residence, investment, or relocation — is a long-term commitment with significant financial implications. This article offers clarity on the key considerations, types of loans, and decision-making points.

Follow-up pieces will explore themes like portfolio-linked mortgage strategies, wealth structuring with real estate, and cross-border property financing for global citizens.

What Determines the Maximum Home Loan You Can Get?

Singapore uses structured metrics to assess home loan eligibility:

  • Loan-to-Value (LTV) ratio1: This sets how much of the property’s value you can borrow. Currently, banks may lend up to 75% of the property’s value for eligible buyers.

LTV Comparison: New vs. Resale Flats6:

New flat: Up to 75% of the purchase price.

You can also receive up to SGD 80,000 Enhanced CPF Housing Grant for a new flat, if you meet the eligibility criteria7.

Resale flat: Up to 75% of the lower of the resale price or value of the flat.

You may apply for CPF housing grants of up to SGD 190,000 for a resale flat if you meet the eligibility criteria7.

  • Mortgage servicing ratio (MSR)2: Mortgage servicing ratio (MSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for.

MSR is capped at 30% of a borrower's gross monthly income.

It applies only to housing loans for the purchase of an HDB flat, or an executive condominium where the minimum occupation period of the executive condominium has not expired.

  • Total Debt Servicing Ratio (TDSR)3: TDSR limits your total monthly loan obligations (including car, personal, and credit card loans) to 55% of your gross monthly income.
  • How can you improve your TDSR? You can improve your TDSR by reducing existing liabilities or increasing income sources to qualify for a larger loan or better terms.

These calculations help ensure your home purchase aligns with long-term affordability.

What Are the Key Types of Home Loans and Interest Rates?

  • Bank Loans: Available for private and HDB housing (new and resale flats). Competitive rates but stricter LTV caps, and often require better credit standing.
  • HDB Loans4: Offered by the Housing Development Board, only available for public housing (new and resale flats). Fixed interest at 2.6%, LTV of 75% (lowered5 from 80% to 75% effective 20th August 2024), and less stringent eligibility.

How Do You Decide Between Loan Types and Interest Rates?

Compare based on:

  • Tenure flexibility
  • Repayment predictability
  • Your investment horizon

HDB vs. Bank Loans: Bank loans offer flexible tenure and rate options for private properties or resale flats making them a smart choice for strategic borrowers.

Loan Tenure Limits1: The maximum loan tenure for housing loans is capped at:

  • 30 years for HDB flats.
  • 35 years for non-HDB properties.

Fixed vs. Floating Interest Rates:

  • Fixed Rates: Ideal for predictability and long-term planning.
  • Floating Rates: Usually lower to start, but subject to market changes — may suit short-term stays or flexible investors.

What Is In-Principle Approval (IPA) and Why Is It Crucial?

IPA is a conditional approval for a home loan based on your financial standing, issued before you commit to a property.

Why it is valuable:

  • Understands your budget before property-hunting.
  • Speeds up negotiation and closing.
  • Shows sellers you're serious and qualified.

Once approved, it typically remains valid for 60 days .

What Comes After an IPA — and How Does It Help You Buy?

With your IPA in hand:

  • Lock in your budget.
  • Move faster in high-demand markets.
  • Align loan terms with expected property returns.

The smoother your financing, the stronger your investment execution.

 The Citi Advantage

With Citi, you benefit from:

  • In-Principle Approval (IPA) support that streamlines your property search.
  • Competitive fixed and floating rate packages tailored to your wealth profile.
  • Dedicated Mortgage Specialists who work with your Client Advisor.
  • Global wealth insights if purchasing properties across borders.

Choosing the right home loan isn't just about rates and tenures — it's about aligning your real estate investments with your risk appetite and life goals. The right strategy, combined with expert guidance, can transform your home purchase into a step forward in wealth creation.

Mortgage

Financial Literacy

Karen Gibbs

Dinna Chan | SG Mortgage Product Manager

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