What is Loan-to-Value (LTV) Ratio and Why It Matters: The Complete Singapore Guide

The Loan-to-Value (LTV) ratio is one of the most critical concepts you'll encounter when buying property in Singapore. Whether you're a first-time buyer, an investor, or someone looking to upgrade your home, understanding your LTV ratio directly impacts how much you can borrow, how much you need to save for a down payment, and ultimately, whether you'll qualify for your dream property.

This comprehensive guide breaks down everything you need to know about LTV ratios in Singapore—from the basics to advanced strategies. We'll explain how the Monetary Authority of Singapore (MAS) uses LTV limits as a cooling measure, show you exactly how to calculate your LTV, and help you understand how this affects your borrowing capacity across HDB loans, bank loans, and refinancing scenarios.

Why does this matter? Because a single percentage point difference in your LTV can mean the difference between affording a property or missing out. By the end of this guide, you'll have the knowledge to make informed decisions about your mortgage and maximize your borrowing power responsibly.

What is Loan-to-Value Ratio?
Why LTV Matters in Singapore
How LTV is Calculated
Current LTV Limits in Singapore (2026)
HDB Loans vs Bank Loans: LTV Differences
LTV for Multiple Properties
Factors Affecting Your LTV
How to Maximize Your Borrowing Power
Common LTV Mistakes to Avoid
Comprehensive FAQ Section

What is Loan-to-Value Ratio?

The Loan-to-Value (LTV) ratio is a percentage that represents the maximum amount you can borrow from a bank or HDB, expressed as a portion of the property's valuation or purchase price—whichever is lower. In simple terms, it tells you how much of the property's value the lender is willing to finance.

For example, if a property is valued at $1,000,000 and the bank offers you a maximum LTV of 75%, you can borrow up to $750,000. The remaining $250,000 must come from your own resources—typically your CPF savings, cash, or a combination of both.

The LTV ratio is defined and regulated by the Monetary Authority of Singapore (MAS), which sets maximum limits to prevent over-leveraging and maintain stability in the property market. These limits apply to all residential property purchases in Singapore, whether you're buying an HDB flat, a private condominium, or an executive condominium (EC).

Key Point: Valuation vs Purchase Price

Here's a critical detail that catches many buyers off guard: your loan is calculated based on the lower of the purchase price or the official valuation. This is where property valuation becomes crucial.

Imagine you agree to buy a property for $1,200,000, but the bank's valuation comes in at $1,000,000. Even though you're paying $1,200,000, your maximum loan at 75% LTV is only $750,000 (75% of $1,000,000). You'll need to cover the $450,000 gap with your own funds. This is why checking valuations across multiple banks is essential—different banks may value the same property differently, affecting your maximum loan amount.

Why LTV Matters in Singapore

A Government Cooling Measure

Singapore's government has long used LTV limits as a key cooling measure to prevent excessive property price inflation and discourage over-leveraging. By controlling how much buyers can borrow, the government encourages more prudent borrowing and ensures the property market remains sustainable.

The LTV limit has been tightened several times in recent years. In December 2021, it was reduced from 90% to 85%. In September 2022, it dropped to 80%. Most significantly, on August 20, 2024, the LTV limit for HDB loans was further reduced to 75%—a move designed to cool the HDB resale market and encourage more conservative borrowing.

Direct Impact on Your Down Payment

Your LTV ratio directly determines how much you need to save for a down payment. If the maximum LTV is 75%, you need a minimum 25% down payment. If it drops to 45% (as it does for second properties), you need 55% down. This is why understanding your LTV is essential for financial planning.

Affects Your Borrowing Capacity

Even if you have excellent income and credit, your LTV limit caps how much you can borrow. No bank will lend you more than the maximum LTV allows, regardless of your financial strength. This means your LTV is often the limiting factor in determining your maximum purchase price.

Influences Your Loan Approval

Banks use LTV as one of several criteria to assess lending risk. A lower LTV (meaning you're putting down more of your own money) makes you a more attractive borrower. Conversely, a higher LTV means you're more leveraged, which banks view as riskier. Your LTV can influence not just whether you're approved, but the interest rate you're offered.

How to Calculate Your LTV Ratio

The LTV calculation is straightforward. Use this formula:

LTV Ratio = (Loan Amount ÷ Property Valuation) × 100%

Step-by-Step Example

Let's walk through a real example:

Scenario: You want to buy a condo in Tanjong Pagar valued at $1,000,000. The bank offers you a loan of $750,000.

Calculation:

Loan Amount: $750,000
Property Valuation: $1,000,000
LTV = ($750,000 ÷ $1,000,000) × 100% = 75%

This means you're borrowing at the maximum 75% LTV. You need to provide $250,000 from your own resources (CPF, cash, or both).

Another Example: When Valuation is Lower Than Purchase Price

Scenario: You agree to buy an HDB flat in Ang Mo Kio for $550,000, but the HDB valuation comes in at $500,000.

Calculation:

Purchase Price: $550,000
HDB Valuation: $500,000
Maximum Loan at 75% LTV: $500,000 × 75% = $375,000
Your Down Payment Required: $550,000 - $375,000 = $175,000

Even though you're paying $550,000, your loan is capped at $375,000 because it's based on the lower valuation. This is why understanding the valuation process is critical.

Current LTV Limits in Singapore (2026)

HDB Loans

As of August 20, 2024, the maximum LTV for HDB concessionary loans was reduced from 80% to 75%. This applies to both new HDB purchases and HDB resale transactions.

Property Number	LTV Limit	Minimum Down Payment	Minimum Cash Component
1st Property	75%	25%	5% (can use CPF for remaining 20%)
2nd Property	45%	55%	25% in cash
3rd & Subsequent	35%	65%	25% in cash

Bank Loans for Private Properties

The maximum LTV for bank loans remains at 75% for individual borrowers. However, this applies differently depending on how many properties you already own:

Outstanding Housing Loans	LTV Limit	Minimum Cash Down Payment
None (1st Property)	75% or 55%*	5% (for 75% LTV) or 10% (for 55% LTV)
1 Outstanding Loan	45% or 25%*	25%
2 or More Outstanding Loans	35% or 15%*	25%

*The lower LTV applies if the loan tenure exceeds 30 years or the loan period extends beyond the borrower's age of 65.

Important Note: Not All Borrowers Qualify for Maximum LTV

While these are the maximum LTV limits set by MAS, banks are not obligated to offer you the full amount. Banks assess multiple factors before approving your LTV, including:

Your credit score and credit history
Your income and employment stability
Your existing debt obligations
The property's lease tenure (for HDB and leasehold properties)
The property's location and condition
Your age and loan tenure

This is why two borrowers with the same property might receive different LTV offers from the same bank. Your individual financial profile matters significantly.