LTV & ABSD Rules for Safe Investment Property Loans | Homejourney

This article is a focused cluster guide under Homejourney’s main investment financing pillar 新加坡房产投资融资完整指南：Homejourney安全投资全攻略 . Here, we go deep on LTV, ABSD and how they affect rental yield mortgage planning, rental income loan payment coverage, and overall investment return mortgage decisions.

What Are LTV and ABSD for Investment Properties in Singapore?

Loan-to-Value (LTV) is the maximum percentage of a property’s value that a bank is allowed to lend you. The rest must come from your own funds (cash and/or CPF OA). MAS sets these limits as part of macroprudential rules to keep household leverage safe.[2][5]

For residential investment properties (second or third homes), the LTV is lower than for your first home and the minimum cash component is higher. In other words, the government deliberately makes leveraged speculation harder, while still allowing long-term investors to build a portfolio prudently.[1][2][5]

Additional Buyer’s Stamp Duty (ABSD) is a tax payable on top of standard Buyer’s Stamp Duty (BSD) when you buy residential property. IRAS administers ABSD and the rates depend on your buyer profile (Citizen, PR, foreigner, entity) and your total count of residential properties.[2][3][8]

In practice, LTV limits how much you can borrow, while ABSD significantly increases your cash/CPF outlay. Together, they shape whether your rental yield mortgage math works – and whether the property can realistically become a positive cash flow property after all costs and taxes.

Current 2026 LTV Limits for Investment Properties

Under MAS macroprudential rules, banks in Singapore must observe strict LTV caps depending on your number of existing housing loans.[1][2][5]

• First property (no outstanding housing loan): Up to around 75% LTV for private residential property, if age and tenure conditions are met.[1][4][5]
• Second property (one outstanding housing loan): Around 45% LTV under standard conditions.[1][3][4]
• Third and subsequent properties (two or more outstanding loans): Around 35% LTV.[1][4]

These caps apply to loans from MAS-regulated banks like DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank. They also interact with:

• Loan tenure and whether it goes past age 65
• Property type (HDB vs EC vs private condo)
• TDSR (Total Debt Servicing Ratio), which caps total monthly debt at 55% of gross income as per MAS guidelines[2][5]

From living in the East for over a decade, a common pattern I see among Sengkang or Punggol upgraders is this: they keep their existing HDB as a rental, and buy a Bedok or Tanah Merah condo near MRT as their second property. Once that HDB loan remains outstanding, their second purchase is immediately subject to the lower LTV band – and the cash/CPF requirement shocks many first-time investors.

Current 2026 ABSD Rates for Investment Buyers

ABSD rates have risen sharply after multiple cooling measures, and the 2023 hike still applies in 2026.[1][2][8][9] For residential purchases:

• Singapore Citizens: 0% on first property, 20% ABSD on second, 30% on third and subsequent properties[1][3][9]
• Singapore PRs: 5% on first property, 30% on second and subsequent properties[1][3][8]
• Foreigners: 60% flat ABSD on any residential property[1][3][4][9]
• Entities (companies & some trusts): 65% ABSD, with additional conditions for trustees[2][3][8]

ABSD is calculated on the higher of the purchase price or market value and must be paid (together with BSD) within 14 days of exercising the Option to Purchase for local transactions.[2][8] IRAS counts even part-ownership (for example, 10% share in a condo with parents) as one property for ABSD purposes.[1][8]

From a cashflow perspective, ABSD is a sunk upfront cost – it does not reduce your mortgage or increase your rental yield. So whenever you model investment return mortgage scenarios on Homejourney, it is safer to treat ABSD as capital that must be recovered through capital gains and long-term rental, not as part of your mortgage break-even calculation.

Real-World Example: Second Property Condo in Tanjong Pagar

Let’s use a realistic example from the CBD fringe, where I often meet investors who work in nearby offices and prefer to buy within walking distance of Tanjong Pagar MRT.

Assume a one‑bedroom condo near Tanjong Pagar MRT Exit A at a purchase price of S$1.5 million.[1]

Buyer profile: Singapore Citizen couple already owning an HDB in Sengkang (one outstanding housing loan), buying this as a pure investment property to rent out.

Step 1 – ABSD and BSD

• ABSD (second property, Citizen) = 20% × S$1,500,000 = S$300,000[1][3][9]
• BSD (using IRAS progressive rates) ≈ S$40,000–S$45,000 (approximate range based on current BSD tiers)[1][3][8]
• Total stamp duties ≈ S$340,000–S$345,000, payable within 14 days of exercising the OTP[1][2][8]

Step 2 – LTV Limit and Downpayment

• Max LTV for second property ≈ 45%, so maximum loan ≈ 0.45 × S$1,500,000 = S$675,000[1][3][5]
• Remaining 55% downpayment ≈ S$825,000, paid via cash and/or CPF OA[1][2]
• At least 5% (S$75,000) must be in cash under prevailing MAS rules; the rest can be CPF OA and additional cash, subject to TDSR[1][2][5]

Total upfront funds needed (excluding renovation and legal costs):

• Downpayment ≈ S$825,000
• ABSD ≈ S$300,000
• BSD ≈ S$40,000–S$45,000
• Total ≈ S$1.16M–S$1.17M

That means to secure a S$1.5M Tanjong Pagar investment unit as your second property, you may need more than S$1.1M in upfront cash/CPF – even though the loan is only S$675,000. Many investors only realise this when their banker or lawyer explains the completion statement, which is why Homejourney encourages you to run all numbers upfront using the mortgage calculator at Bank Rates and Mortgage Rates .

Rental Yield, Mortgage and Cash Flow: Can the Investment Carry Itself?

Once you know your LTV and ABSD exposure, the next step is to assess whether your rental yield mortgage profile is safe. In simple terms, you want to know if your rental income can cover your rental income loan payment and running costs with enough buffer.

Let’s continue the Tanjong Pagar example and assume:

• Loan amount: S$675,000
• Tenure: 25 years
• Interest rate: 3.3% p.a. (typical of 3M SORA‑pegged packages in early 2026, depending on bank and package)[2]

Approximate monthly mortgage: around S$3,300–S$3,400 (this is a rough estimate; use Homejourney’s eligibility and instalment calculator at for precise numbers).

If similar one‑bedroom units in the same development are renting for about S$4,200–S$4,500 a month (based on recent CBD fringe rents reported in local news)[9], your gross monthly surplus before expenses might be around S$800–S$1,200.

But you still need to subtract:

• Maintenance fees and sinking fund (often S$250–S$450/month for CBD‑adjacent condos, higher if facilities are extensive)
• Property tax at investment rates (significantly higher than owner-occupier rates as per IRAS rental tax bands)[8]
• Insurance, minor repairs, and possible vacancy periods

Once all this is accounted for, many units settle into a modest positive cash flow property or near break-even. Your investment return mortgage then comes mainly from long-term capital appreciation rather than high monthly cash flow. This is why ABSD is such a critical factor – it raises your capital outlay and lowers your overall return on equity.

For a detailed walkthrough of comparing rental yield vs mortgage payment, refer to our in-depth analysis: Rental Yield vs Mortgage Payment: Safe Investment Analysis with Homejourney and Rental Yield vs Mortgage: Cash Flow Analysis for Safer Investing | Homejourney .

Interest Rates, SORA and Their Impact on Affordability

While MAS sets the maximum LTV, your actual loan approval and monthly instalment still depend heavily on interest rates, income stability and your total debt load. Most 2026 bank loans are either short-term fixed or pegged to the 3M/6M SORA (Singapore Overnight Rate Average) published by MAS.[2][5]

The chart below shows recent interest rate trends in Singapore:

When rates rise, your monthly instalment increases for floating packages, which can compress or even eliminate your cashflow buffer. This is especially important if your rental income loan payment coverage is thin. Using Homejourney’s real-time rate tracking and bank comparison at Bank Rates helps you stress-test different rate scenarios across DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank and others before committing.

Step‑by‑Step: How to Plan LTV & ABSD Safely for an Investment Purchase

To apply LTV and ABSD rules practically, use this simple decision framework before you even shortlist units on Property Search or Property Search .

1. Confirm Your Property Count and Buyer Profile

First, list all properties where you have any legal share – this includes your own HDB, EC, private condos, and even small shares in family properties. IRAS treats part‑ownership as property ownership for ABSD.[1][8]

Next, confirm your status:

• Singapore Citizen
• Singapore PR
• Foreigner
• Buying under company or trust structure

This instantly tells you which ABSD band to use. Homejourney’s investment property LTV & ABSD tool (coming soon to Bank Rates ) will help automate this step with Singpass/MyInfo verification.

2. Estimate Maximum LTV and Cash/CPF Needs

Using your property count, apply the appropriate LTV band (75%, 45% or 35% as a quick rule of thumb for private properties).[1][3][4] Then run three quick calculations:

1. Max Loan = LTV % × Purchase Price
2. Downpayment = Purchase Price − Max Loan (remember at least 5% must be cash for bank loans)[1][2][5]
3. ABSD + BSD = Stamp Duties from IRAS rates[2][8]

Key safety rule: Before you fall in love with that high-floor Bedok Reservoir or Queenstown unit, make sure you can comfortably fund both the downpayment and ABSD without stretching your emergency savings. Treat the ABSD as locked-up capital for at least 7–10 years.

3. Check TDSR and Run Mortgage Scenarios

Use Homejourney’s mortgage eligibility calculator at to verify:

• Whether your planned loan amount fits within MAS’s 55% TDSR cap[2][5]
• How your monthly mortgage changes across different banks and tenures
• How refinancing later could improve cashflow, using Bank Rates for real-time rates

If you have variable income (for example, commission‑based roles in sales or banking), speak with a Homejourney mortgage broker via Bank Rates . They will help you understand how banks shade or average your income, and how that affects your borrowing power.

4. Stress‑Test Rental and Cashflow

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 3 (2026)
3. Singapore Property Market Analysis 4 (2026)
4. Singapore Property Market Analysis 2 (2026)
5. Singapore Property Market Analysis 5 (2026)
6. Singapore Property Market Analysis 8 (2026)
7. Singapore Property Market Analysis 9 (2026)