Bridging Loan for Property Purchase Explained: Frequently Asked Questions
A bridging loan Singapore is a short-term property bridge finance option that helps buyers secure a new home before selling their current one, covering the downpayment gap until sale proceeds arrive.
Homejourney prioritizes your safety by verifying all financial data through Singpass integration, ensuring transparent bridging finance decisions in Singapore's competitive market.
What is a Bridging Loan and Why Use It in Singapore?
In Singapore, a bridging loan for property purchase acts as a short term property loan to bridge cash flow needs when upgrading properties, such as from an HDB flat to a condo.
It must pair with a new home loan and repays within 6 months via MAS regulations, preventing standalone use.
For example, selling a $1M HDB flat in Tampines while buying a $1.5M condo in Punggol? Use a bridging loan for the 25% downpayment beyond LTV limits.
Homejourney's bank rates page lets you compare bridge loan property options from DBS, OCBC, UOB, and more instantly: https://www.homejourney.sg/bank-rates.
Bridging Loan Eligibility and Key Requirements
Singapore Citizens, PRs, and eligible foreigners over 21 with good credit can apply if selling a property.
The loan covers up to 25% of the new property's price (beyond 75% LTV for private properties or 80% for HDB), limited by expected sale proceeds or CPF refunds.
MAS Notice 1107 governs this, ensuring loans tie to property sales. Banks like DBS peg rates to prime (around 4.25% p.a.), while Standard Chartered uses 3M SORA + 2.50% for HDB.
- Documents needed: Sale agreement, Option to Purchase, income proof, CPF statements.
- TDSR/MSR check: Applies to both loans; use Homejourney's calculator: https://www.homejourney.sg/bank-rates#calculator.
- Insider tip: Time applications post-OTP for new launches to align with 6-month window.
At Homejourney, Singpass/MyInfo auto-fills applications, verifying income and CPF for faster approvals from partners like HSBC and Maybank.
Types of Bridging Loans: Capitalised vs Simultaneous Repayment
Choose between capitalised interest (interest accrues, paid post-sale; no dual payments) or simultaneous repayment (monthly payments on both loans, lower total interest).
| Type | Pros | Cons | Best For |
|---|---|---|---|
| Capitalised Interest | No immediate repayments | Higher total interest | Quick sales expected |
| Simultaneous Repayment | Lower overall cost | Dual monthly burden | Stable income, longer sales |
Example: $200K bridging loan at 5.5% p.a. Capitalised costs ~$5,500 interest over 6 months; simultaneous adds ~$900/month but saves long-term.
Lower LTV via bridging can secure better main loan rates from CIMB or RHB.
Costs, Rates, and Real Singapore Examples
Rates range 5-6% p.a. (2025 data), higher than standard loans due to short-term risk. No lock-ins common, but fees apply (0.5-1% processing).
Real example: Upgrading from $800K Yishun HDB to $1.2M Sengkang condo. LTV 75% = $900K bank loan. Need $300K downpayment. Sale proceeds $700K cover it post-sale; bridge $240K (20%). DBS at prime 4.25% + margin = manageable.
Track live SORA on Homejourney for timing: https://www.homejourney.sg/bank-rates.
Actionable steps:
- Confirm sale listing on https://www.homejourney.sg/search.
- Calculate affordability on Homejourney.
- Apply multi-bank via one form for DBS, OCBC, UOB offers.
- Monitor via WhatsApp support.
Disclaimer: Rates fluctuate; consult professionals. Homejourney verifies data for trust.
When to Use Bridging Loans: Pros, Cons, and Tips
Pros: Secure dream homes fast (e.g., en bloc windfalls), lower LTV for better rates, smooth upgrades.
Cons: High interest, dual servicing stress, 6-month deadline.
Pro tip: Ideal for hot markets like Punggol 2025 launches; pair with Bridging Loan Singapore Guide: Homejourney's Complete 2025 Explainer for full guide.
Link to pillar: See New Launch vs Resale Mortgages: Homejourney Guide 2025 for broader context.
Frequently Asked Questions (FAQs)
1. Can I get a bridging loan without selling my property?
No, it's tied to sale proceeds per MAS rules. Standalone not allowed.
2. What's the maximum bridging loan amount?
Up to 25% of new property price, capped by sale proceeds (e.g., $250K for $1M home).
3. How long is the bridging loan tenure?
Mandatory 6 months max; extensions rare and costly.
4. Does bridging loan affect my main home loan approval?
It lowers LTV, improving rates, but TDSR considers both.
5. Which banks offer the best bridging loans in 2025?
Compare DBS (prime-based), Standard Chartered (SORA), UOB on Homejourney's tool for personalized quotes.
Ready to bridge safely? Start with Homejourney's verified rates and Singpass applications: https://www.homejourney.sg/bank-rates. Trust Homejourney for transparent property journeys.
