In Singapore, the Loan-to-Value (LTV) ratio is the maximum property loan percentage a bank or HDB can lend you, expressed as a percentage of your home’s purchase price or valuation, whichever is lower.
It directly determines your down payment requirements, the banks you qualify for, and even the mortgage interest rates you finally pay, so understanding it is critical before you shortlist any home on Homejourney’s Property Search .
This article is a focused cluster under Homejourney’s main pillar on mortgage basics: Loan-to-Value (LTV) Ratio in Singapore: Homejourney’s Essential Guide for Safe B... . Here, we zoom into “What is Loan-to-Value LTV Ratio and Why It Matters: Bank Rate Comparison Guide” with practical examples and tactical steps to choose the right bank loan safely.
What is LTV Ratio in Singapore? (Simple Definition + Formula)
In Singapore, the LTV ratio is defined by MAS as the maximum loan amount you can take, expressed as a percentage of the lower of the property’s purchase price or market valuation.
Put simply: it answers the question, “How much can I borrow vs how much cash/CPF must I put in?”. MAS sets LTV limits to prevent over-leveraging and keep the property market stable.[5][8]
Basic formula:
LTV Ratio = (Loan Amount ÷ Property Value) × 100%
Example I often walk buyers through in the west, near Jurong East MRT: if you’re buying a resale 4-room HDB at $700,000 but the HDB valuation is $680,000, banks will use the lower value of $680,000 to calculate LTV, not the higher negotiated price. This is where many first-timers get caught by the “cash over valuation” portion.
Current LTV Limits in Singapore (2025–2026)
Housing loan rules are regularly updated by MAS, so always check the latest explainer on new housing loans.[5][8] Below is the current broad framework for individual borrowers taking bank loans in Singapore:
- First housing loan: Up to 75% LTV, or 55% if tenure > 30 years (private) or > 25 years (HDB), or extends past age 65.[1][3]
- Second housing loan: Up to 45% or 25% (if tenure/age conditions breached).[3]
- Third & subsequent loans: Up to 35% or 15% (if tenure/age conditions breached).[3]
- Shell companies / non-individual borrowers: LTV capped at 15%.[6]
For HDB concessionary loans, the maximum LTV has recently been tightened to 75%, meaning a minimum 25% down payment in cash/CPF.[3] This is a key change that many BTO buyers in towns like Punggol or Sengkang still miss if they’re reading outdated guides from before 2024.
Minimum Cash and CPF Down Payment
For a typical first bank loan (LTV 75%):[1][3]
- Loan: 75%
- Minimum cash: 5%
- Remaining 20%: Cash and/or CPF OA
If your LTV is capped at 55% instead, your minimum cash portion jumps to 10%, with 35% from cash/CPF.[1][3] This is where Homejourney’s eligibility and affordability calculator at Bank Rates becomes crucial to stress-test your budget.
Why LTV Matters for Bank Rate Comparison
Your LTV ratio affects more than just your down payment – it also influences which bank packages you qualify for, and occasionally the spread or promotional fixed rates banks are willing to offer you.
1. Higher LTV = Higher Risk to Banks
The closer you are to the maximum LTV (e.g. 75%), the more leverage you are taking. While MAS caps are the same across banks, individual banks can still:
- Offer you less than the maximum LTV (e.g. 70% instead of 75%) based on their internal risk assessment.[3]
- Be stricter on income proof, credit history, and property age/lease.
- Decline certain older leasehold HDBs or walk-up apartments even if MAS limits allow it.
In practical terms, I’ve seen buyers browsing older HDB blocks in Queenstown near Dawson, only to find that some banks give lower LTV because of remaining lease. A 75% expectation sometimes becomes 65% in the actual letter of offer – and that changes the whole cash/CPF requirement overnight.
2. LTV, TDSR and Interest Rates Work Together
Even if your LTV is within MAS limits, your loan must still pass the Total Debt Servicing Ratio (TDSR) and (for HDB/resale) the Mortgage Servicing Ratio (MSR) rules.[5][8] Banks test your income against a stress interest rate when deciding how much to extend.
That’s why Homejourney doesn’t just show headline rates on Bank Rates – our calculators factor in TDSR/MSR, prevailing SORA and your desired LTV so you don’t over-commit.
Understanding SORA, Fixed and Other Rate Types
Most bank home loans in Singapore today are either:
- SORA-pegged floating rate (e.g. 3M SORA + spread)
- Fixed rate for an initial lock-in period (e.g. 2 or 3 years)
- Board rate packages (less common now and usually less transparent)
SORA (Singapore Overnight Rate Average) is the key interest rate benchmark overseen by MAS and used by major banks including DBS, OCBC, UOB, HSBC, Standard Chartered and others for home loan pricing.[5] Homejourney tracks live 3M and 6M SORA as part of our real-time bank rate comparison on Bank Rates .
The chart below shows recent interest rate trends in Singapore:
When you look at SORA trends together with your LTV, you can decide whether to:
- Lock in a fixed rate if you’re highly leveraged (high LTV) and want certainty.
- Choose a SORA-pegged package if you have more buffer and can tolerate some fluctuations.
How LTV Affects Your Actual Dollars: Real-Life Example
Imagine you’re buying a new launch condo near Lentor MRT for $1.5 million. The bank’s valuation matches at $1.5 million.
Scenario A: First Property, LTV 75%
- Loan amount: 75% × $1,500,000 = $1,125,000
- Minimum cash: 5% × $1,500,000 = $75,000
- Remaining down payment (cash/CPF): 20% × $1,500,000 = $300,000
If you pick a 3M SORA loan at (for example) 3M SORA + 0.75% spread, and market SORA is around 2.5%, your initial rate might be ~3.25% p.a. (illustrative). A high LTV means your monthly instalment is sizeable; Homejourney’s calculator at Mortgage Rates shows you this instantly so you can adjust tenure or property budget.
Scenario B: Second Property, LTV 45%
- Max loan: 45% × $1,500,000 = $675,000[3]
- Down payment: 55% = $825,000 (with at least 25% in cash)[3]
