Home buyers using more cash and CPF for down payment even as mortgage loans rise

SINGAPORE – Home buyers are putting more of their own money into property purchases, even as home prices and mortgage sizes have climbed sharply over the past five years.

This suggests that buyers are not simply borrowing proportionately more to keep up with property prices, said OCBC’s group head of consumer secured lending Tok Geok Peng.

Instead, they are using more cash or Central Provident Fund savings to fund 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 our borrowers being around 38, most of them have saved up over the years or have sufficient CPF that can contribute to their property purchase, reducing the loan amount that they need,” she said.

While home prices and mortgage sizes both increased between 2021 and the first half of 2026, OCBC’s figures showed that loan sizes did not rise as quickly.

For new private launches, purchase prices rose 49% between 2021 and the first half of 2026, while median mortgage sizes increased 35%.

For private resale homes, prices rose 36% while mortgages grew 32%. For HDB resale flats, both purchase prices and median mortgage sizes increased 32%.

This suggests that buyers are funding a larger share of their purchases with cash or CPF, rather than debt.

But the rise in home prices has nevertheless pushed many mortgages above the $1 million mark.

Nearly eight in 10 borrowers buying new private launches took out home loans of at least $1 million in the first six months of 2026, up from four in 10 in 2021, Tok noted.

This does not mean buyers are becoming more leveraged because mortgage sizes have risen more slowly than the prices of homes being bought.

Banks have also observed that home buyers are financing a smaller proportion of their property’s value through borrowing.

UOB’s head of group personal financial services Jacquelyn Tan said it has seen a similar trend. Its average housing loan quantum for private properties grew at 8% on average from 2023 to the first half of 2026, to more than $1 million.

The share of home buyers taking out loans of $1 million or more rose by 15 percentage points from 2023 to 2025.

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

Tok also noted fewer customers are maximising the loan-to-value limit of 75%.

Under the loan-to-value or LTV limit, a borrower can generally finance up to 75% of a property’s value for their first housing loan with a bank.

Among OCBC customers buying new private property launches, the proportion of those maximising their LTV limit has fallen from 67% in 2021 to 52% in the first half of 2026.

Similarly, the proportion of private resale home buyers who maximised their loan limit dipped from 66% to 61% over the same period.

Chelsea Ling, head of deposits and secured lending at DBS Singapore’s consumer banking group, similarly noted that DBS’ LTV ratio for private property home loans is lower year-on-year, indicating that customers are financing a smaller proportion of their property’s value through borrowing and are therefore less highly leveraged against their homes.

The relatively healthy picture among current borrowers comes as mortgagee-sale listings rose to their highest level since the first half of 2021. Such listings refer to properties put up for sale by banks after borrowers defaulted on their home loans.

Why are mortgagee-sale listings rising?

Property consultancy firm 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% were mortgagee-sale listings. Residential properties accounted for 144 listings or almost half of the total, with industrial and retail properties accounting for the rest.

Joy Tan, head of auction and sales at ETC, 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. Home owners are typically given time to restructure, refinance, or sell via private treaty,” said Tan.

“As a result, a mortgagee-sale listing usually reflects financial pressure that has been building over several years rather than a sudden, recent deterioration.”

Joy Tan said ETC is seeing a mixture of borrowers among the mortgagee-sale cases. These include highly leveraged investors who purchased properties between 2020 and 2022, as well as owners of investment or rental properties where rental income may no longer be sufficient to cover mortgage instalments, maintenance fees and taxes.

Between 2020 and 2022, there was a sharp upswing in the property market. Private residential prices rose 2.2% in 2020, before it surged to 10.6% in 2021 and 8.6% in 2022.

Price growth gradually fell to 6.8% in 2023, 3.9% in 2024 and 3.3% in 2025. In the first half of 2026, prices rose 1.4%.

Much of the early price surges also coincided with very cheap financing, noted property analysts.

Three-year fixed mortgage rates were around 1.15% in late 2021, before climbing sharply as global interest rates rose. By November 2022, fixed-rate packages at the three local banks reached between 4.25% and 4.5%.

Joy Tan said she expects auction activity to remain active in the second half of 2026 with residential and industrial listings expected to continue featuring prominently, although the pace could moderate.

“The level of mortgagee-sale activity will be influenced by several factors, including interest rates, job market conditions, business performance, and whether banks continue to provide distressed borrowers with additional time to restructure their loans,” she added.