What is a home loan and how does it work in Singapore?
A home loan (or mortgage) is a secured loan from a bank, financial institution, or HDB that helps you buy a residential property, with the property itself as collateral. You repay the borrowed amount plus interest over a tenure of up to 35 years, with monthly payments split between principal and interest through a process called loan amortisation. In Singapore, mortgages are regulated by MAS through rules like TDSR and LTV limits, and rates are typically benchmarked against SORA in fixed, floating, or hybrid packages.
Last updated: 22 Apr 2026
A home loan - also known as a mortgage - is a secured loan from a financial institution that helps you purchase a residential property. The property itself serves as collateral, meaning the lender has the right to repossess it if you fail to meet your repayment obligations.
In Singapore, home loans are offered by banks, financial institutions, and the Housing and Development Board (HDB). When you take one out, you agree to repay the borrowed amount (the principal) plus interest over an agreed loan tenure - up to 30 years for bank loans on HDB flats or up to 35 years for private properties, and up to 25 years for HDB loans.
Your monthly repayment has two components: one portion reduces the principal, while the other covers the interest charged by the lender. In the early years, a larger share of each payment goes toward interest. Over time, that balance shifts and more of each payment chips away at the principal - this is how loan amortisation works.
Singapore's mortgage market is closely regulated by the Monetary Authority of Singapore (MAS), which sets rules like the Total Debt Servicing Ratio (TDSR) and Loan-to-Value (LTV) limits to prevent borrowers from overextending themselves. Both HDB and bank loans are currently capped at a maximum LTV of 75%, following cooling measures introduced in August 2024. These safeguards help maintain stability in the property market and protect both borrowers and lenders.
Mortgage rates in Singapore are typically benchmarked against reference rates like SORA (Singapore Overnight Rate Average), and loan packages can be structured as fixed-rate, floating-rate, or a hybrid of both. Your choice of package has a significant impact on your total interest cost over the life of the loan - which is why comparing options across multiple lenders before committing is one of the most important steps you can take.