Property-Backed Loan
How much you can cash out depends on a mixture of 3 key factors, namely, loan-to-valuation (LTV), Outstanding home loan amount and total CPF funds used. Of course you might be subjected to general regulatory limits like total debt servicing ratio (TDSR). Businesses should also show an ability to make good on future monthly debt repayments.
Loan-to-Value (LTV) ratios represent the amount of your property’s value that lenders are willing to loan you, commonly ranging from 70% to 90%. Banks typically offer higher LTV ratios than non-bank lenders, but it’s wise to consider private funding options if you’re seeking less conventional terms or faster access to funds.
LTV | Banks / NBFI | Alternative Lenders |
|---|---|---|
Residential | 70% | 85% |
Commercial | 70% | 80% |
Shophouses | 70% | 80% |
Industrial | 60% | 80% |
With the LTV, your total cash out amount is now %LTV of your property minus your outstanding loan and the CPF used to purchase the property (with accrued interest).
Bank vs. Non-Bank Property Loans: Which is Right for You?
Here’s a full breakdown on the pros and cons between a bank and a non-bank.
Property Backed | Banks | Non-Banks |
|---|---|---|
LTV | 60-70% | 60-85% |
Interest Rate
| 2.5% p.a. onwards | 5.5% p.a. onwards |
Tenor | Up to 25 years | Typically up to 5 years (able to stretch to 15 years) |
Repayment Schedule | Principal + interest monthly | Principal + interest monthly OR
Interest servicing only |
Processing Fee | 0% | 0.5-1.0% |
Banks offer competitive rates and longer loan terms, yet non-bank lenders may provide faster approval times and more flexible terms, especially if your property type doesn’t meet bank criteria. Explore our Private Funding page for situations where non-bank funding could be more advantageous, particularly for unique property types or urgent cash needs.
A team that will support you
We have a dedicated team that will walk you through your entire loan process and help you do the market research you need.
We let lenders compete for your loan
Be ready to be spoilt for choice when we help you compare the best deals across all banks and non-banks so you only get the lowest interest rate and the highest cash out amount. Our rates are same as what the banks can offer or even better.
How do I know how much my property is valued?
Different banks might arrive at substantially different valuation estimations, implying that some of the process is based on guessing rather than established appraisal rules. It’s most likely from the Singapore Institute of Surveyors and Valuers (SISV) for private homes. If the property is owned by HDB, you can acquire a valuation report from their own panel of valuers, who are all IRAS-licensed professionals.
Are there any additional fees I need to look out for?
- Legal and appraisal expenses may be subsidized depending on the bank with whom you take out a commercial property loan. It’s also worth noting that most commercial property loans cost a little more than equivalent residential property loans.
- When you take out a commercial property loan, you’re usually locked in for two to three years. If you opt to pay in advance or sell the property before the deadline, you will almost certainly be charged a penalty cost of roughly 1.5 percent.
What are the type of loan rates and structure available?
- You can choose between a fixed and a flexible package when getting a business property loan. You’ll be locked in for around 2 to 3 years with any form of business property financing. There will very certainly be consequences if you opt to prepay or sell your home during this window.
- Fixed packages provide firms with more confidence, as they have a predictable cash outflow for the next two to three years. Variable packages tend to be somewhat less expensive at first, but this might change depending on how interest rates fluctuate.
Why should I engage a broker for my property loan?
Brokers deal with a wide range of lenders, giving them access to a wide range of products at various pricing points. That means you may go to a single mortgage broker and examine a variety of lending options. To select the best financing, the broker will assist you comprehend the interest rate, LTVs, and other information of each offer. This is opposed to you applying with each direct lender independently and analyzing them on your own.
How long does an application typically take?
A typical application can take as quickly as a few weeks and drawdown and cash out arrangements can take an additional month to complete as there will be legal arrangements that needs to be made especially if there is a transfer of charge over the asset.