Types of Housing Loans Available in Singapore

David Banks
Authored by David Banks
Posted: Wednesday, July 6, 2022 - 11:14

Most people even the financially stable ones do not have adequate cash in hand to purchase a house. That is why home loans exist and they are commonly known as mortgages. Buying a property is a big step for everyone, whether for personal use or investment purposes.

Taking up a housing bank loan is a step that one has to consider with caution, including the type of housing loan, the repayment period and the interest one has to pay. Housing bank loans in Singapore have fewer restrictions and one has to clear credit checks to be able to qualify for the loan.

What are the Types of Home Loans Available?

1. HDB Housing Loan

Housing and Development Board provides housing loans to flab buyers who meet the eligibility criteria at a reduced interest rate above the prevailing CPF (Central Provident Fund) interest rate.

For one to be eligible for the HBD housing loan:

  • At least one of the buyers has to be a citizen of Singapore.
  • Have a monthly gross income that does not exceed Singapore’s $14,000.
  • Not have acquired two or more housing loans in the past from HDB.

Before one applies for the HDB loan, one has to acquire HDB Loan Eligibility (HLE) letter. This letter will state:

  • The maximum loan amount you can borrow.
  • The maximum amount of repayment you can repay every month.
  • The repayment duration of your loan.

2. Bank loans

Bank loans are alternative loans that one can consider taking to finance the purchase of a house. They are offered by banks and other financial institutions. Bank loans have an advantage over HDB loans in that you can end up paying significantly less than the HDB loan.

Under bank loans there are two main types of housing loans:

  • Fixed-rate loans- this type of loan applies the same rate throughout the contract period.
  • Floating-rate loans- are different from fixed-rate loans. Floating rates are fixed on some index and they can move downwards or upwards along with it.

If you are looking to take a home loan and have no idea where to start you can speak to a mortgage broker. They will provide the best professional advice and help you compare the lowest housing loan interest rates available. You can check https://dollarbackmortgage.com/housing-bank-loan/ for any of your housing loan needs.

How to Apply for a Bank Home Loan

There are several steps in the application process they include:

1. Determine your needs

Identify the type of loan and the purpose of the loan you want. Whether you want to refinance your home loan or get a loan for the purchase of a new home. Identifying your needs will help you know the features of the loan you want and the amount that you qualify for.

2. Choose the best home loan

You get to select the best home loan that fits your needs and that offers low-interest rates and monthly installments.

3. Submit your mortgage application

Once you select the mortgage package from the loan provider that suits you, you will apply and wait for approval. After approval, you will receive an offer letter from the bank. Then you will have to meet the legal requirements and processes and afterward receive your home loan.

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