Bridging Loan for Property Purchase Explained: Frequently Asked Questions

A bridging loan Singapore is a short-term loan that covers the downpayment on your new property until you receive proceeds from selling your current one, typically lasting up to 6 months with interest rates around 5-6% p.a.[1][3]

At Homejourney, we prioritize your safety and trust by verifying all financial information, helping you navigate bridge loan property options confidently. This cluster article answers key questions for Singapore buyers upgrading from HDB to private properties, linking back to our comprehensive pillar guide on Bridging Loan Singapore: Complete Guide for Property Buyers.

What Is a Bridging Loan and When Do You Need It?

A bridging loan for property purchase bridges the cash flow gap when buying before selling. For example, upgrading from a 4-room HDB flat in Punggol (sold for $550,000 net proceeds) to a $1.2 million condo in Sengkang requires a $240,000 downpayment (20% of purchase price).[1]

If your sale hasn't completed, a bridging loan covers this using future sale proceeds as security. It's common for HDB upgraders or en bloc participants needing quick funds. Homejourney's bank rates page lets you compare options from DBS, OCBC, UOB, and more at https://www.homejourney.sg/bank-rates.

Key Features of Bridging Finance in Singapore

Bridging loans are regulated by MAS, limited to the net proceeds from your old property sale, with a mandatory 6-month repayment.[1][5] Maximum tenure is strict to prevent long-term debt.

Loan Amount: Up to 20% of new property value or net sale proceeds, whichever is lower.[1]
Interest Rates: Typically 3M SORA + 2.50% p.a. (e.g., Standard Chartered at ~5.5% as of 2026).[3]
Tenure: 3-6 months, no monthly installments, interest paid at end.[3]
LTV Limit: Capped by existing CPF balances and sale equity.[1]

No processing fees from banks like Standard Chartered, but always check TDSR/MSR compliance via Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator.

Bridging Loan Interest Rates and SORA Trends

Rates tie to SORA, Singapore's benchmark since 2020, replacing fixed deposits. Current rates hover at 5-6% p.a., higher than standard home loans due to short-term risk.[1][3]

The chart below shows recent interest rate trends in Singapore:

As seen, 3M SORA has stabilized post-2025 hikes, but monitor via Homejourney for real-time tracking. Compare live rates from HSBC, Maybank, CIMB on our secure platform.

Eligibility and Application Steps for Short Term Property Loans

To qualify, you need an approved sale of your current property (HDB or private) and must meet MAS LTV/ABSD rules. HDB bridging loans fund downpayments only; private properties allow bridging part of the home loan too.[1][3]

Verify Sale: Get HDB/URA resale approval letter.
Check Affordability: Use Homejourney calculator for TDSR (60% debt-to-income).
Compare Rates: View DBS, OCBC, UOB at https://www.homejourney.sg/bank-rates.
Apply via Singpass: One-click multi-bank submission on Homejourney, auto-fills CPF/income data.
Receive Funds: Approval in days, funds for downpayment.

Insider tip: Time your HDB resale OTP around month 3 of your 5-month MOP to minimize bridging needs—locals know Punggol resales move fast.

Real Example: HDB to Condo Upgrade with Property Bridge

Selling a $600,000 Tampines HDB flat (net $500,000 proceeds), buying $1 million Sengkang condo. Downpayment: $200,000 ($50k cash + $150k bridging loan). Bank loan: $800,000. Post-sale, repay bridging from proceeds, excess $350,000 reduces principal or funds renovations.[1]

Interest cost: ~$7,500 (5.5% on $150k for 6 months). Use Homejourney to search budget-fit condos at https://www.homejourney.sg/search. Always consult brokers via our platform for personalized advice.

Risks and Costs of Bridging Loans

High interest (5-6%) accrues daily; delays in sale mean extra costs. If market dips, proceeds may not cover loan. ABSD applies if not selling within timelines (e.g., 6 months for resale HDB).[1]

Disclaimer: Rates fluctuate; this is not financial advice. Homejourney verifies data for trust, but seek professional review. For post-purchase maintenance, check aircon services.

Frequently Asked Questions (FAQs)

Q1: Can I use a bridging loan for HDB flats?
A: Yes, HDB bridging loans cover downpayments while awaiting resale proceeds, offered by banks like Standard Chartered at competitive SORA rates. Apply via Homejourney for multi-bank quotes.[3]

Q2: What's the maximum bridging loan amount?
A: Limited to net sale proceeds or 20-25% of new property value, secured against your old property's equity.[1]

Q3: How long can I hold a short term property loan?
A: Strictly 6 months max per MAS rules; extensions rare and costly.[5]

Q4: Does bridging affect my main home loan?
A: No direct impact if repaid promptly, but factor interest into TDSR calculations using Homejourney's tool.

Q5: Which banks offer the best bridging finance?
A: Compare DBS, OCBC, UOB, HSBC via Homejourney bank rates—our Singpass integration speeds approval safely.

Ready to bridge confidently? Start with Homejourney's verified rates and calculator at https://www.homejourney.sg/bank-rates. For full details, read our pillar: Bridging Loan Singapore Complete Guide. Trust Homejourney for safe property journeys.