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I WANT TO REFINANCE
I WANT TO CASH-OUT REFINANCE
Featured IN
Updated April 22, 2024
Singapore’s 1st
Loan Marketplace
With a home equity loan, you can access your property's value without selling your home. For example, if your fully paid home is worth $1.2 million now, you can borrow up to 75% of its value, or $900,000, at low interest rates around 1.6% p.a.
This gives you a large sum to fund major expenses like starting a business, at a lower rate than typical business loans above 6.5%. As your home acts as collateral for the loan, interest rates are low. A home equity loan lets you tap your property's value, without having to sell your home.
You can take a home equity loan even if your property is not fully paid up. The loan amount depends on your home's current market value and outstanding mortgage. Financing has to go through the same bank as your existing mortgage, as your home cannot have two different lenders.
For example, if your home is worth $1.2 million but you still owe $500,000 on your mortgage, you can borrow up to 75% of $1.2 million minus $500,000, which is $400,000.
Home equity loans can only be taken on private residential properties only. For Executive Condominiums, the 5-year Minimum Occupancy Period must pass first.
TDSR rules may still apply, unless your home is fully paid up and you borrow 50% or less of its value and the the maximum loan tenure is 35 years or until age 75, whichever is shorter.
Overall, home equity loans allow you to access your property's value without selling your home, but strict criteria apply.
| Bank | Scheme | Lock In Period | 1st Yr Interest | 2nd Yr Interest | 3rd Yr Interest | 4th Yr Interest | |
|---|---|---|---|---|---|---|---|
| OCBC | 3 Year Fixed | 3 years | 2.90% | 3.00% | 3.00% | 4.66% | |
| Promotion | 2 Year Fixed | 2 years | 2.95% | 2.95% | 4.41% | 4.66% | |
| OCBC | 2 Year Fixed | 2 years | 2.95% | 2.95% | 4.16% | 4.66% | |
| DBS | 2 Year Fixed | 2 years | 2.95% | 2.95% | 4.66% | 4.66% | |
| Promotion | 2 Year Fixed | 2 years | 3.00% | 3.00% | 4.41% | 4.66% | |
| Maybank | 2 Year Fixed | 2 years | 3.00% | 3.00% | 4.71% | 4.71% | |
| Standard Chartered | 2 Year Fixed (Priority Banking) | 2 years | 3.05% | 3.05% | 4.46% | 4.66% | |
| Standard Chartered | 2 Year Fixed | 2 years | 3.10% | 3.10% | 4.56% | 4.66% | |
| DBS | 2 Year Fixed | 2 years | 3.10% | 3.00% | 4.66% | 4.66% |
| Bank | Scheme | Lock In Period | 1st Yr Interest | 2nd Yr Interest | 3rd Yr Interest | 4th Yr Interest | |
|---|---|---|---|---|---|---|---|
| Promotion | 3-Month SORA | 2 years | 3.96% | 3.96% | 4.66% | 4.66% | |
| OCBC | 3-Month SORA | 2 years | 4.16% | 4.16% | 4.41% | 4.66% | |
| Maybank | 3-Month SORA | 1 year | 4.21% | 4.00% | 4.00% | 4.66% | |
| DBS | 3-Month SORA | 2 years | 4.21% | 4.21% | 4.21% | 4.21% | |
| Promotion | 1-Month SORA | 2 years | 4.26% | 4.31% | 4.81% | 4.81% | |
| Promotion | 3-Month SORA | 2 years | 4.26% | 4.26% | 4.41% | 4.66% | |
| Standard Chartered | 3-Month SORA (Priority Banking) | 2 years | 4.26% | 4.26% | 4.31% | 4.66% | |
| OCBC | 3-Month SORA | 2 years | 4.26% | 4.26% | 4.46% | 4.66% | |
| CIMB | 3-Month SORA | 2 years | 4.31% | 4.36% | 4.41% | 4.76% | |
| Promotion | 3-Month SORA | 3 years | 4.41% | 4.41% | 4.41% | 4.66% |
*Today's Mortgage Rates - 21 April 2024
Legal fees for a home equity loan are typically $2,500 - $3,000. Lenders in Singapore may charge additional valuation fees to appraise the property. Expect a 2-4 month wait between approval and receiving funds.
The full application and legal process must be repeated for each new home equity loan. To avoid extra fees and delays, plan ahead and borrow required amounts upfront.
CPF funds used to purchase your property will reduce the maximum home equity loan amount you can borrow.
For example, if you utilized $200,000 of CPF for the downpayment or mortgage payments, your home equity loan limit decreases by $200,000.
This prevents indirect CPF withdrawal. Those considering a home equity loan should use cash, not CPF, to service their mortgage.
If you own a private residential property in Singapore that has significantly appreciated in value over time, you may be able to access some of this stored equity through a home equity loan. This allows you to unlock a portion of your property’s value and convert it into cash for other financial needs.
A home equity loan is a type of second mortgage that uses your home as collateral. It allows you to borrow against the current appraised market value of your private property, minus any outstanding mortgage loan and CPF funds used.
You can typically borrow up to 75% of your home’s value in Singapore. The loan amount, interest rate, and repayment tenure will depend on factors like your age, income, existing debts, and the lending policies of banks.
While home equity loans allow you to unlock your property’s value, they also carry risks like any debt. Your home serves as collateral, so failure to repay could result in foreclosure. Some tips:
Use funds only for important goals like education, not luxury purchases Consult financial advisors to evaluate if suitable for your situation
Shop interest rates from multiple banks to find the lowest rate Costs and Fees
You will need to pay legal fees ($1,800 to $2,000) and property valuation fees to the bank. There may also be early redemption fees if you exit the loan before tenure. Interest rates currently range from 1.5% to 3% p.a.
Alternatives like refinancing your mortgage or taking a personal loan may better suit some financial situations. Discuss options with bank loan officers and financial advisors.
Interest rates and fees can vary significantly between banks. Compare offers from multiple lenders to find the most competitive home equity loan package.
While you may qualify for up to 75% of your home’s value, don’t max out your borrowing limit. Only take what you need to achieve your financial goals.
Factor in legal fees, valuation fees, and other upfront costs. Also consider early redemption penalties if you aim to exit the loan quickly.
Don’t take a home equity loan for unnecessary luxury purchases. Utilize the funds for important investments like education, retirement, or starting a business.
Sometimes a personal loan, refinancing your mortgage, or downsizing your home may be better options. Discuss with advisors before deciding.
Home equity loan tenures are usually calculated as 75 years minus your current age, minus the number of years you’ve already been servicing your existing mortgage. However, different banks may use slightly different formulas.
The maximum loan amount is based on:
It is calculated as: A – B – C
Interest rates are constantly being revised by banks. We compare rates from major banks to find you the absolute lowest rate possible.
You’ll need to pay legal fees of $1,800 – $2,000 and a property valuation fee to the bank providing the loan.
No, home equity loan instalments can only be paid in cash, not CPF.
Yes, you can refinance to get better rates. Banks also offer cash rebates for refinancing your existing equity loan with them.
There is little difference – both allow you to take out equity from your fully-paid property for other uses. You can get a equity loan from any bank or refinance with your existing lender.
No, home equity loans are only allowed for private residential properties, even if your HDB flat is fully paid up.
