What is Loan-to-Value (LTV) Ratio?
The Loan-to-Value (LTV) ratio is the maximum amount a bank will lend you for a property purchase, expressed as a percentage of the property's value or purchase price—whichever is lower.[1] In Singapore, the Monetary Authority of Singapore (MAS) sets these limits to prevent borrowers from overleveraging their income and to maintain a stable property market.[1]
Think of it this way: if you're buying a property worth $500,000 and the bank offers you a 75% LTV, you can borrow up to $375,000. This means you need to provide a down payment of at least $125,000 in cash or CPF savings.[3]
Understanding your LTV ratio is crucial because it directly determines how much cash you need upfront and how much you can borrow from banks. For first-time buyers on Homejourney, we recommend using our mortgage eligibility calculator to instantly see your borrowing capacity across all major Singapore banks.
Current LTV Limits in Singapore (2026)
Singapore's LTV limits vary significantly based on the type of property and your borrowing situation. Here's what you need to know:
HDB Loans vs Bank Loans
HDB Concessionary Loans: The LTV limit was reduced to 75% as of August 2024, meaning you need a minimum 25% down payment.[3] This was tightened from the previous 80% limit to cool the housing market and promote affordability.[1]
Bank Loans (Private Properties): The maximum LTV remains at 75% for loans with a tenure of 30 years or less, requiring a minimum 5% cash down payment.[1] However, if your loan tenure exceeds 30 years, the LTV drops to 55%, requiring a 10% cash down payment.[1]
LTV Limits Based on Number of Outstanding Loans
Your LTV eligibility decreases significantly with each additional property you own. This is a key cooling measure to prevent over-leveraging:
- First Property (No existing loans): 75% LTV (5% minimum cash down) or 55% LTV (10% minimum cash down)[2]
- Second Property (1 existing loan): 45% LTV or 25% LTV (25% minimum cash down)[2]
- Third Property & Beyond (2+ existing loans): 35% LTV or 15% LTV (25% minimum cash down)[2]
This tiered approach reflects MAS's commitment to preventing property speculation and maintaining market stability. If you're considering a second property purchase, Homejourney's bank rates comparison tool helps you see which banks offer the best terms for your situation.
Special Cases and Additional Restrictions
Age-Related Restrictions: If your loan tenure extends beyond your 65th birthday, the LTV limit drops to 55% (or 25% for subsequent properties).[1] This protects both borrowers and lenders by ensuring loans are repaid before retirement.
Shell Companies: If the borrower is a non-individual entity or shell company, the LTV limit is capped at just 15%.[6] This restriction prevents corporate entities from using shell companies to circumvent residential property cooling measures.
HDB Resale Flats: Private property owners must wait 15 months after selling their property before purchasing an HDB resale flat.[1] This cooling measure helps moderate demand in the HDB resale market.
How LTV Affects Your Down Payment
The LTV ratio directly determines your required down payment. Here's a practical example:
Scenario: You're buying a $600,000 condo as a first-time buyer with a 30-year loan tenure.
- Maximum LTV: 75%
- Maximum loan amount: $600,000 × 75% = $450,000
- Required down payment: $600,000 − $450,000 = $150,000 (25% of purchase price)
- Minimum cash component: $600,000 × 5% = $30,000
- CPF component allowed: $150,000 − $30,000 = $120,000
For HDB flats, the down payment can be split into 5% and 15% if you choose a staggered payment arrangement.[1] This flexibility helps first-time buyers manage their cash flow more effectively.
Not all borrowers qualify for the maximum LTV their category allows. Banks assess your creditworthiness, property details (such as lease tenure and location), and income profile before approving your loan amount.[3] On Homejourney, you can compare rates and eligibility across all major banks to find the best option for your financial profile.
Why LTV Matters: The Real Impact on Your Finances
Understanding LTV isn't just about meeting regulatory requirements—it has profound implications for your financial health:
1. Determines Your Purchasing Power
Your LTV limit directly controls how much house you can afford. A lower LTV means you need more cash upfront, which may limit the properties you can purchase. For example, if you only have $80,000 saved and want to buy a $500,000 property, you need at least a 75% LTV to make the purchase feasible.
2. Impacts Monthly Loan Repayment
A higher LTV means borrowing more money, which increases your monthly mortgage payment. This affects your Mortgage Servicing Ratio (MSR), which is capped at 30% of your gross monthly income for HDB flats.[8] A lower down payment might seem attractive initially but could strain your monthly budget.
3. Affects Interest Costs Over Time
Borrowing more money means paying more interest over the loan tenure. A $450,000 loan at 3.5% interest over 30 years costs significantly more than a $300,000 loan at the same rate. Building a larger down payment upfront saves you tens of thousands in interest payments.
4. Influences Your Investment Strategy
If you plan to own multiple properties, understanding how LTV decreases with each purchase helps you plan your investment timeline. Many property investors space out purchases to maximize their borrowing capacity on each property.
Bank Rate Comparison: How LTV Affects Different Lenders
While MAS sets the maximum LTV limits, individual banks have discretion in how much they'll actually lend within those limits. This creates opportunities to compare and find the best rates and terms for your situation.
On Homejourney, you can instantly compare home loan rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and other major lenders. Here's why this matters:
- Different banks offer different spreads over SORA: One bank might offer SORA + 1.2%, while another offers SORA + 1.5%. Over a 30-year loan, this 0.3% difference translates to thousands of dollars.
- Banks have different eligibility criteria: Some banks are more flexible with lease tenure requirements or age restrictions, effectively giving you a higher practical LTV.
- Promotional rates and lock-in periods vary: Some banks offer fixed rates for 2-3 years, while others use floating rates from day one.
- Processing speed differs: Faster approval means you can secure your property sooner and potentially negotiate better terms.
Homejourney's commitment to user safety means we verify rates from all major banks in real-time. You can see exactly what each bank is offering without visiting multiple branches or calling different loan officers. Our bank rates page updates continuously to reflect market changes, ensuring you always have current information.
Key Factors That Modify Your LTV Eligibility
Loan Tenure
The length of your loan directly affects your LTV. Standard tenure is 30 years for HDB flats and 35 years for private properties.[1] If you want a longer tenure, your LTV drops from 75% to 55%, requiring a larger down payment. Conversely, shorter tenures (20 years or less) don't trigger this reduction.
Borrower's Age
If your loan extends beyond age 65, the LTV limit automatically reduces.[1] A 55-year-old buying a property with a 30-year loan tenure would have the loan extending to age 85, triggering the lower 55% LTV. This is why older first-time buyers sometimes need larger down payments.
Property Type and Lease Tenure
While not directly stated as an LTV modifier, banks consider lease tenure when assessing loan eligibility. A property with less than 30 years remaining on the lease may result in lower loan amounts or higher interest rates, effectively reducing your practical LTV.
Debt Servicing Ratios
Even if you qualify for 75% LTV, your Total Debt Servicing Ratio (TDSR) might limit how much you can actually borrow. TDSR caps your total monthly debt repayments at 60% of your gross monthly income.[1] If you have car loans, credit card debt, or other obligations, this could reduce your effective borrowing capacity below the LTV limit.
How to Optimize Your LTV Position
1. Increase Your Down Payment
The most straightforward way to improve your position is to save more cash. A larger down payment means borrowing less, reducing your monthly repayment burden and improving your debt servicing ratios. Even an extra 5% down payment can make a significant difference over 30 years.
2. Clear Existing Debts
Before applying for a home loan, pay off credit cards, car loans, and other debts. This improves your TDSR and may allow you to borrow more within your LTV limit. Many first-time buyers don't realize that clearing a $500/month car loan could unlock an additional $100,000+ in borrowing capacity.
3. Use CPF Wisely
CPF OA savings count toward your down payment, which stretches your cash reserves. However, be strategic—you'll need CPF for retirement. Calculate carefully how much CPF to use for your property purchase.
4. Consider Shorter Loan Tenures
If you can afford it, a 25-year loan tenure instead of 30 years keeps your LTV at 75% instead of dropping to 55%. This requires higher monthly payments but saves significantly on interest.
5. Compare Banks Strategically
Use Homejourney to compare rates across all major banks. Some banks offer better terms for specific borrower profiles. Our mortgage brokers can help identify which bank is most likely to approve your application with favorable terms.
Common Misconceptions About LTV
Misconception 1: "I can always borrow the maximum LTV"
Reality: Maximum LTV is just a ceiling. Banks assess your creditworthiness and may offer less. Your TDSR might also limit borrowing below the LTV threshold.
Misconception 2: "LTV is the same across all banks"
Reality: While MAS sets maximum limits, banks have discretion. Some banks are more conservative; others more aggressive. This is why comparing on Homejourney matters.
Misconception 3: "Lower LTV is always bad"
Reality: A lower LTV (higher down payment) means lower monthly payments and less interest paid overall. It's often better for your long-term financial health.
Misconception 4: "LTV doesn't change after I buy"
Reality: Your LTV for future purchases drops significantly with each property. Plan accordingly if you're a property investor.
Frequently Asked Questions About LTV
What's the difference between LTV and down payment percentage?
LTV and down payment are inverse concepts. If your LTV is 75%, your down payment is 25%. LTV tells you the maximum you can borrow; down payment tells you the minimum you must pay upfront. They always add up to 100%.
Can I negotiate my LTV with a bank?
Not really. MAS sets regulatory maximums, and banks operate within those limits based on their risk assessment. However, you can improve your eligibility by increasing your down payment, clearing debts, or improving your credit profile. Comparing banks on Homejourney helps you find the lender most likely to offer favorable terms for your situation.
