Why You Cannot Get a Mortgage Loan in Singapore and How to Fix It (2026)

Most home loan rejections in Singapore, and most approvals smaller than expected, come from a few causes. You fail the debt servicing test at the 4% stress rate. Your loan-to-value limit is lower than you assumed. The valuation comes in low. Your credit record is weak. Or the bank cannot count all your income. Most of these can be fixed, and the best time to find them is before you sign an option to purchase.

At a glance

• Banks test your loan at 4%, not at today’s package rates of about 1.5–2.2%. Your total debt repayments must fit within 55% of gross income (TDSR). For HDB flats and ECs bought new within the minimum occupation period, property loans must also fit within 30% (MSR).
• Short-term debts reduce your loan capacity a lot. In our example, S$1,300 a month of car-loan and card repayments cuts the maximum loan by about S$270,000.
• Not all income counts in full. Banks apply a haircut of at least 30% to bonuses, commissions and rent. Self-employed income usually has to show in your IRAS assessments.
• Assets can help. Cash pledged for four years counts in full over 48 months. Unpledged assets count at only 30%.
• Get an in-principle approval (IPA) before you commit, and do not apply blindly at many banks.

Reason 1: You fail the TDSR or MSR test

Under the TDSR rules, your monthly repayments on all debts, including the new home loan, must stay within 55% of your gross monthly income. For an HDB flat, or an EC bought from a developer, the MSR also caps property loan repayments at 30% of income. Banks must calculate the home loan instalment at the higher of 4% or the actual rate. The count includes car loans, student loans, renovation loans, credit card balances (at the minimum payment due) and any other loans. For a loan you have guaranteed, at least 20% of its repayment counts towards your MSR.

Example. Say a couple earns S$12,000 a month in fixed salary and wants a 30-year loan for a private condo:

	No other debts	Car loan S$1,100 + cards S$200 a month
TDSR limit (55% of S$12,000)	S$6,600	S$6,600
Available for the home loan	S$6,600	S$5,300
Maximum loan at the 4% stress rate	about S$1,382,000	about S$1,110,000

S$1,300 a month of short-term debt removes about S$272,000 of borrowing power. The MSR is tighter. A household earning S$8,000 can put S$2,400 a month towards an HDB flat loan. At HDB’s 3% assessment rate over 25 years, that supports about S$506,000. A bank loan, assessed at 4% over 25 years, supports about S$455,000.

Fixes: pay down or close car and personal loans before you apply; clear revolving card balances; choose a longer tenure if it does not push your LTV down (see Reason 3); add a co-borrower whose income counts; or buy a cheaper home. Our guide to TDSR and MSR goes deeper.

Reason 2: The bank cannot count all your income

Banks must apply a minimum 30% haircut to variable income (bonuses, commissions, allowances) and to rental income. Rent only counts if there is a stamped tenancy agreement with at least six months left to run.

• Bonus-heavy pay. S$10,000 basic salary plus an average S$2,000 a month in bonus counts as S$11,400, not S$12,000. That lowers your TDSR limit from S$6,600 to S$6,270.
• Self-employed. Banks usually rely on your IRAS Notices of Assessment. If your business is new, or you declare a low income to reduce tax, the bank sees a low income.
• Between jobs. With no current employment income, there is little for the bank to count. HDB also requires you to be working when you apply for an HDB Flat Eligibility (HFE) letter and when the loan is disbursed (gov.sg).

Fixes: buy or refinance before you change jobs or start a business; declare your full income; and gather payslips, CPF contribution history and tax assessments before you apply.

Reason 3: Your loan-to-value limit is lower than you assumed

The LTV limit is 75% for your first housing loan, 45% for your second and 35% for your third. Each limit falls by 20 points if the tenure is over 30 years (25 for HDB flats) or the loan runs past age 65. Two common surprises:

• An existing joint loan. If you are a borrower on your parents’ or your spouse’s home loan, that counts as an outstanding loan. Your new loan then drops to 45%.
• Age. A 50-year-old borrower can only take a 15-year tenure at 75%. A longer tenure means 55%.

The 2017 version of this article suggested “decoupling” to get around the second-loan limit. Be careful: IRAS can disregard arrangements made to reduce ABSD and impose a 50% surcharge, and whether a case is avoidance depends on its facts. Get proper legal and tax advice before you restructure ownership. Our LTV guide has worked examples.

Reason 4: The valuation comes in low

Banks lend on the lower of the price and their valuation. Say you agree to pay S$1.5 million and the bank values the property at S$1.45 million. A 75% loan is then S$1,087,500, not S$1,125,000. You must find S$37,500 more, usually in cash. This is not a rejection, but it can feel like one if your budget has no buffer.

Fixes: ask two or three banks for an indicative valuation before you sign an option to purchase. Negotiate the price with that figure in hand. Keep a cash buffer for any amount above valuation.

Reason 5: Your credit record

Banks check your report with a credit bureau such as Credit Bureau Singapore. It shows your repayment history, late payments, defaults and current credit facilities. Undischarged bankruptcy, recent defaults and pending litigation can stop an application. A record of late card payments can lower the amount a bank will lend or the rate it offers.

Fixes: buy your own credit report before you apply, and have any errors corrected. Pay every bill on time from now on, and keep card balances low. Time is the main cure for a bad record, so start early.

Reason 6: You do not qualify for an HDB loan

For an HDB loan, you must meet HDB’s conditions: at least one Singapore Citizen buyer; a household income of S$16,000 or less (S$8,000 for singles), a ceiling raised on 24 August 2026; no private residential property owned or sold in the past 30 months; fewer than two previous HDB loans; and employment at the time of application. If you fail one of these conditions, you can still use a bank loan. But the bank tests your loan at 4% instead of 3%, and you must pay at least 5% of the price in cash. The HDB loan guide covers the rules.

How to fix it: an action plan

1. Get an IPA before you sign an option to purchase. It shows your realistic loan amount while you can still walk away.
2. Clear short-term debts first. Look again at the car-loan example above: each dollar of monthly repayment costs you far more borrowing power than it seems.
3. Show or pledge assets. Banks can convert eligible financial assets into “income” over 48 months. If you pledge S$300,000 in Singapore-dollar deposits for four years, it counts as S$6,250 a month. That raises your TDSR limit by about S$3,440 and supports about S$720,000 more loan at 4% over 30 years. Left unpledged, the same cash gets a 70% haircut. It then counts as S$1,875 a month and supports only about S$216,000 more. The LTV limit still applies in both cases.
4. Use a good banker or broker, and apply with a plan. Find out what the problem is before you try more banks. Our article on applying for multiple loans explains the trade-offs.
5. If you are refinancing, check the exemptions. The TDSR threshold does not apply when you refinance an owner-occupied home. Investment property loans above the threshold can be refinanced if you commit to repay at least 3% of the balance over no more than three years. In both cases, the bank’s own credit assessment still applies.

Bottom line

A rejected or reduced home loan is usually a sizing problem, not bad luck. The bank’s sums follow published rules: 55% TDSR, 30% MSR, a 4% stress rate, 75%/45%/35% LTV, and haircuts on uncertain income. Run those sums yourself in the Propwise mortgage calculator before you fall in love with a unit. Then fix the problem you find (debts, documents, deposits or credit) before you sign, not after.

Sources

• MSR and TDSR rules — Monetary Authority of Singapore, updated 16 Dec 2021
• Calculating TDSR for property loans — Monetary Authority of Singapore, updated 29 Sep 2022
• Loan tenure and loan-to-value limits — Monetary Authority of Singapore, updated 27 Mar 2024
• TDSR rules on refinancing fine-tuned — Monetary Authority of Singapore, 2 Sep 2016
• HDB loans guide — gov.sg (MyNiceHome), 23 Aug 2026
• Policy on 99-to-1 arrangements for stamp duty payment — Ministry of Finance, 21 Apr 2023
• Credit Bureau Singapore — consumer credit reports, checked Oct 2026