Bridging Loan for Property Purchase: Boost Approval Odds | Homejourney

Bridging Loan for Property Purchase Explained: How to Improve Approval Chances

A bridging loan for property purchase in Singapore is a short-term loan that helps you pay the downpayment for your new home before the sale proceeds from your existing property come in. It typically lasts up to six months and is repaid once your existing flat or condo is sold.[1][3][6][9]

For many HDB upgraders and private property owners, understanding how bridging finance works – and how to improve approval chances – can be the difference between smoothly securing a dream unit and scrambling for last-minute cash. This cluster article zooms in on bridging loans as a sub-topic within Homejourney’s wider mortgage pillar guide on upgrading and financing strategies, and focuses on practical steps you can take to get your bridge loan approved faster and with less stress.

What Is a Bridging Loan in Singapore?

In Singapore, a bridging loan Singapore (also called a property bridge or short term property loan) is a temporary facility that covers the gap between buying your new property and receiving sale proceeds from your current one.[1][3][4] MAS Notice 633 and 1107 set out rules for banks and merchant banks on such loans, including that they must be short-term and used for the purchase of immovable property.[6][9]

Typically, a bridge loan property is used to fund the non-cash portion of your downpayment beyond the Loan-to-Value (LTV) limit, based on the confirmed sale of your existing home.[1][3][4] In practice, many banks allow up to about 20–25% of the purchase price, provided your net sale proceeds and CPF refund from the old property are sufficient.[1][3][4][5]

Most banks in Singapore (DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank and others) structure bridging finance as an add-on to your housing loan, with interest rates often in the 5–6% p.a. range and a mandatory repayment within around six months.[1][3][4][5]

Real-Life Example: HDB Upgrader in Singapore

Imagine a couple selling their 4-room HDB in Punggol for S$650,000 while upgrading to a S$1.1 million resale condo in Sengkang. They have an outstanding HDB loan of S$150,000 and about S$200,000 CPF to be refunded after sale. Net sale proceeds (after clearing the HDB loan and refunding CPF) might be around S$300,000, but the buyers’ completion is three months after they must exercise the condo Option to Purchase.

Under the current 75% LTV limit for a bank loan on the new condo, they can borrow up to S$825,000. That leaves S$275,000 to be paid as downpayment – 5% (S$55,000) in cash and 20% (S$220,000) in cash/CPF. A bridging loan can be used to cover that S$220,000 non-cash-downpayment portion, secured against the confirmed sale of the Punggol flat.[1][3][4]

Locals who’ve done this know one key “insider tip”: always check the estimated completion dates for both properties carefully (HDB completion often at HDB Hub in Toa Payoh and condo completion at the law firm’s office in the CBD). Misaligned completion dates are a top reason Punggol / Sengkang upgraders end up needing more bridging finance or emergency cash.

Key Features of Bridging Finance in Singapore

Purpose: To cover downpayment / short-term cash flow gaps when you are buying and selling at the same time.[1][3][4][5]
Maximum amount: Generally up to your net sale proceeds and CPF refunds from the confirmed sale of your existing property; commonly around 20–25% of the new property price.[1][3][4][5]
Tenure: Short – typically must be repaid within six months, once your sale completes.[1][3][4][5]
Interest rates: Usually higher than standard home loans (often around 5–6% p.a., varies by bank).[1][3][4][5]
Security: Secured against the sale proceeds of your existing property.[1][3][4]

Because the tenure is short, the total interest cost may still be manageable even if the rate looks high. The larger risk lies in not being able to sell your property or complete on time, which can affect your ability to repay the bridge loan.

End-to-End Bridging Loan Journey in Singapore

1. Decide to Upgrade or Buy Before Selling

You typically start considering a bridging loan when you:

Have found a resale condo or new launch you want to secure quickly.
Are in the process of selling your HDB or private property, but completion will be later.
Need to pay the Option Fee and exercise fees before your sale proceeds are in.

At this stage, use Homejourney’s mortgage eligibility calculator at to estimate your maximum loan size and affordability for your new property before you commit to any Option to Purchase (OTP). This reduces the risk of overcommitting.

2. Secure the Sale of Your Existing Property

To qualify for a bridging loan, banks generally require that the sale of your current property is at least contractually committed – usually via an exercised OTP or Sale & Purchase Agreement, not just verbal offers.[1][2][4]

Insider local tip: In mature estates like Tampines, Toa Payoh or Clementi, flats and condos often attract multiple offers. Work with your agent and conveyancing lawyer to lock in serious buyers quickly and keep your completion timeline realistic, especially if your buyers need HDB approval or are taking an HDB loan.

3. Obtain an In-Principle Approval (IPA) for Your New Mortgage

Before signing an OTP on the new property, get an IPA for your main housing loan. Homejourney allows you to submit one multi-bank application via Bank Rates , sending your details to DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and more at the same time. You can auto-fill using Singpass/MyInfo for quicker processing and fewer manual forms.

This IPA helps the bank assess your Total Debt Servicing Ratio (TDSR), income stability and overall credit profile ahead of the bridging loan decision.

4. Apply for the Bridging Loan Together with Your Home Loan

Most banks prefer to structure the bridging loan together with your main mortgage.[1][3][4][5] Through Homejourney’s application flow at Bank Rates , you can indicate that you need bridging finance, and upload the additional sale-related documents.

The typical timeline in Singapore:

Day 1–7: You obtain IPA and shortlist units using Homejourney’s property search at Property Search .
Day 7–21: You secure buyer for your current property; buyer exercises OTP.
Day 14–28: You sign OTP for the new property; your lawyer coordinates completion dates.
Within 1–2 weeks of OTP: You apply for home loan + bridging loan through Homejourney.
Within ~1–2 weeks: Bank issues letter of offer (subject to documentation and valuation).

5. Disbursement and Repayment

On completion of your new purchase, the bank disburses both your main home loan and the bridging loan directly to the seller (or to your lawyer’s client account) to pay the required completion monies.

Once the sale of your existing property is completed, the sale proceeds and CPF refunds are first used to clear your outstanding loan on the old property (if any), then to repay the bridging loan, and any balance can go into CPF or cash back to you.[1][3][4]

Step-by-Step: How to Improve Bridging Loan Approval Chances

Step 1: Clean Up Your Credit Profile Early

Banks in Singapore still check your credit bureau report and repayment history, even though bridging loans are secured by your property.[2][4][7] Before applying: