LTV & ABSD for Investment Property: Homejourney's 2026 Guide

Understanding LTV and ABSD for Investment Properties

When buying an investment property in Singapore, two critical regulations determine how much you can borrow and how much you'll pay upfront: Loan-to-Value (LTV) limits and Additional Buyer's Stamp Duty (ABSD). For a second property, the Monetary Authority of Singapore (MAS) caps your loan at 45% of the property value, while the Inland Revenue Authority of Singapore (IRAS) charges 20% ABSD for Singapore Citizens.[1][2] This means for a $1.2 million investment property, you'd secure a maximum $540,000 loan and need to pay $240,000 in ABSD alone—before considering the 5% downpayment and Buyer's Stamp Duty (BSD). Understanding how these rules interact is essential for planning your investment property purchase and ensuring you have sufficient capital.

Homejourney prioritizes your safety by providing verified, current data on financing rules and connecting you with trusted banks through our bank rates comparison page, where you can calculate your eligibility instantly via Singpass and compare offers from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major lenders.[1][2]

What is LTV and How Does It Apply to Investment Properties?

Loan-to-Value (LTV) is a ratio that determines the maximum percentage of a property's purchase price that a bank will lend you. MAS sets these limits to manage systemic risk and discourage excessive speculation. The LTV you qualify for depends entirely on how many residential properties you already own or have outstanding loans on.[1]

For investment properties specifically:

First property (no existing loans): Up to 75% LTV—you need 25% cash/CPF downpayment
Second property (1 outstanding loan): Maximum 45% LTV—you need 55% cash/CPF downpayment
Third and subsequent properties: Maximum 35% LTV—you need 65% cash/CPF downpayment

HDB loans are stricter: second properties cap at 25% LTV, meaning you'd need 75% downpayment for an HDB flat purchase as an investor.[1] This progressive tightening is intentional—the government wants to ensure investors have genuine capital at stake and can absorb property market downturns.

Real example: A Singaporean investor with an existing HDB flat buying a $1.5 million condo near Tanjong Pagar MRT (2-minute walk from Exit A) as a second property can borrow a maximum of $675,000 (45% of $1.5M), requiring $825,000 in cash or CPF for the downpayment alone.[1] This substantial upfront requirement is why many investors use a combination of savings, CPF, and sometimes spousal CPF to meet the downpayment threshold.

Current ABSD Rates for Investment Properties in 2026

Additional Buyer's Stamp Duty (ABSD) is a cooling measure tax imposed on top of the standard Buyer's Stamp Duty (BSD). It applies based on your buyer profile and property count, and rates have remained stable since April 2023.[1][3]

ABSD rates as of 2026:

Singapore Citizens: 0% on first property, 20% on second, 30% on third and beyond
Permanent Residents: 5% on first property, 30% on second and beyond
Foreigners: 60% flat rate on any residential property
Entities/Companies: 65% on all properties

For investors, the 20% ABSD on a second property is calculated on the higher of the purchase price or the property's market valuation.[3] On a $1.2 million property, that's $240,000 due within 14 days of executing the purchase agreement. Unlike BSD (which can be partially paid with CPF), ABSD typically requires cash payment, though new launch properties allow CPF payment upfront, with resales requiring initial cash and CPF refund within 14 days via IRAS.[1][2]

Step-by-Step: Calculating Your Investment Property Financing

To determine how much cash you need for an investment property purchase, follow this systematic approach:

Determine your buyer profile: Count all existing properties (HDB, condo, landed) to establish your property count for ABSD purposes.
Calculate ABSD and BSD: Use IRAS's tiered BSD rates (1% on first $180,000, 2% on next $180,000, 3% on next $640,000, 4% on subsequent $500,000, 5% on $1.5M–$3M range, 6% above $3M) plus your applicable ABSD rate. For a $1.2M second property: BSD ≈ $31,200 + ABSD $240,000 = $271,200 in stamp duties.
Apply LTV to determine loan amount: At 45% LTV for a second property, a $1.2M purchase yields a $540,000 maximum loan. Confirm this with your bank, as some may offer lower LTV based on your TDSR (Total Debt Servicing Ratio).
Calculate minimum cash downpayment: 5% of purchase price ($60,000) must be paid in cash; the remaining 50% can be CPF (if eligible) or cash.
Verify TDSR compliance: Banks assess whether your total monthly debt repayments (mortgage + other loans) don't exceed 55% of your gross monthly income. For a $540,000 loan at 4% interest over 30 years, monthly repayment is approximately $2,580—requiring gross monthly income of at least $4,691.

Use Homejourney's mortgage calculator to instantly verify your eligibility and see how much you can borrow based on your income, existing debts, and property count. The calculator uses Singpass integration to auto-fill your CPF balance and employment data for accuracy.[1][2]

Combining LTV and ABSD: A Practical Example

Let's walk through a realistic scenario. Sarah, a Singapore Citizen, owns an HDB flat and wants to buy a $1.2 million resale condo in Bedok as an investment property.

Her financing breakdown:

Purchase price: $1,200,000
ABSD (20% on second property): $240,000
BSD (tiered): ~$31,200
Total stamp duties: $271,200 (must be paid in cash within 14 days)
LTV limit: 45% = $540,000 maximum loan
Minimum cash downpayment: 5% = $60,000
Remaining downpayment: 50% = $600,000 (CPF or cash)
Total cash/CPF needed before loan: $931,200 ($60,000 cash + $271,200 cash for duties + $600,000 downpayment)
Bank loan: $540,000 at 4% over 30 years = $2,580/month

Sarah must have $931,200 available (combination of cash and CPF) before the bank releases the $540,000 loan. This is why investors often use CPF for the downpayment portion while reserving cash for ABSD, which cannot be paid from CPF on resale properties.

Key Constraints: TDSR and MSR Limits

Beyond LTV, banks apply two critical affordability checks. The Total Debt Servicing Ratio (TDSR) caps your total monthly debt repayments at 55% of gross monthly income. This includes your mortgage, car loans, credit card debt, and any other liabilities.[1][2] For investment properties, some banks apply a stricter Mortgage Servicing Ratio (MSR) of 30%, counting only the mortgage payment against income.

If you're refinancing or have multiple properties, TDSR becomes even tighter. A property investor with two mortgages, a car loan, and credit card balances may find their TDSR already at 50%, leaving little room for a third property loan. This is why many investors focus on one or two properties rather than aggressively expanding their portfolio.