Home Buyers Use More Cash and CPF for Down Payments as Prices Outpace Mortgage Sizes

OCBC’s group head of consumer secured lending Tok Geok Peng said buyers are not simply borrowing proportionally more to keep up with property prices. Instead, they are using more cash or Central Provident Fund savings for their down payments. Tok attributed this to OCBC borrowers’ incomes growing faster than property prices. The bank financed more than a third of private property market transactions in 2025. With the median age of its borrowers around 38, most have saved up over the years or have sufficient CPF to put towards a purchase, reducing the loan amount they need.

OCBC’s figures show that home prices and mortgage sizes both rose between 2021 and the first half of 2026, but loan sizes did not rise as quickly. For new private launches, prices rose 49 per cent while median mortgage sizes increased 35 per cent. For private resale homes, prices rose 36 per cent while mortgages grew 32 per cent. For HDB resale flats, both purchase prices and median mortgage sizes increased 32 per cent.

Rising prices have still pushed many mortgages above S$1 million. Nearly 8 in 10 borrowers buying new private launches took out home loans of at least S$1 million in the first six months of 2026, up from 4 in 10 in 2021, Tok noted. That does not mean buyers are more leveraged, because mortgage sizes have risen more slowly than prices. UOB’s head of group personal financial services Jacquelyn Tan noted the same trend: UOB’s average housing loan quantum for private properties grew 8 per cent on average from 2023 to the first half of 2026, to more than S$1 million, and the share of home buyers taking out loans of S$1 million or more rose by 15 percentage points from 2023 to 2025.

Both OCBC and UOB said borrowers’ debt-servicing levels remained broadly stable despite larger loans, while DBS said the overwhelming majority of its customers continue to meet repayments and delinquencies remain extremely low.

Under the loan-to-value (LTV) limit, a borrower can generally finance up to 75 per cent of a property’s value for a first housing loan with a bank. Among OCBC customers buying new private launches, the proportion maximising their LTV fell from 67 per cent in 2021 to 52 per cent in the first half of 2026. Among private resale home buyers who maximised their loan, the proportion dipped from 66 per cent to 61 per cent over the same period. Chelsea Ling, head of deposits and secured lending at DBS Bank Singapore’s consumer banking group, said DBS’ LTV ratio for private property home loans is lower year on year, so customers are financing a smaller proportion of their property’s value through borrowing and are less highly leveraged against their homes.

The relatively healthy picture comes as mortgagee-sale listings, which are properties put up for sale by banks after borrowers defaulted on their home loans, rose to their highest level since the first half of 2021. Property consultancy ETC recorded 292 auction listings from January to June 2026, the highest half-yearly total since the first half of 2021. Of these, 216, or 74 per cent, were mortgagee-sale listings. Residential properties accounted for 144 listings, almost half of the total, with industrial and retail properties making up the rest.

Joy Tan, ETC’s head of auction and sales and a member of Realion Group, said the apparent contradiction could be due to a time lag, as properties reaching auction today may reflect financial difficulties that began several years earlier. Banks do not repossess and auction a property after a single missed payment, she said, and owners are typically given time to restructure, refinance or sell via private treaty. ETC sees a mixture of borrowers among mortgagee-sale cases, including highly leveraged investors who bought between 2020 and 2022 and owners of investment or rental properties whose rental income may no longer cover mortgage instalments, maintenance fees and taxes.

Private residential prices rose 2.2 per cent in 2020, then surged 10.6 per cent in 2021 and 8.6 per cent in 2022. Price growth then slowed to 6.8 per cent in 2023, 3.9 per cent in 2024 and 3.3 per cent in 2025, and prices rose 1.4 per cent in the first half of 2026. Analysts noted that much of the early surge coincided with very cheap financing: three-year fixed mortgage rates were around 1.15 per cent in late 2021, but by November 2022 fixed-rate packages at three local banks reached between 4.25 per cent and 4.5 per cent. Joy Tan expects auction activity to remain active in the second half of 2026, with residential and industrial listings featuring prominently, although the pace could moderate depending on interest rates, the job market, business performance and whether banks continue to give distressed borrowers more time to restructure their loans.