Financing Your Property Purchase
How much a bank will lend you comes down to three things: the Loan-to-Value limit, the Total Debt Servicing Ratio, and — for joint borrowers — the Income-Weighted Average Age. Here's how each one works, and what it actually costs a foreigner in cash to buy a $2 million condo.
How Much Can You Borrow: Loan-to-Value (LTV) Limits
The Monetary Authority of Singapore (MAS) caps how much a bank can lend you as a percentage of the property's price or valuation, whichever is lower. This cap — the Loan-to-Value ratio — drops each time you take on another outstanding housing loan, so the amount you can borrow depends heavily on how many properties you already own.
Downpayment: 25%, of which at least 5% must be cash — the rest can be CPF Ordinary Account or cash
Downpayment: 55%, of which at least 25% must be cash — the rest can be CPF or cash
Downpayment: 65%, of which at least 25% must be cash — the rest can be CPF or cash
Loan-to-Value Chart
The full LTV limit only applies below both a 30-year tenure and age 65 at loan end. Crossing either threshold — a longer tenure, or an older age at the end of the loan — drops the limit by 20 percentage points on your first loan, and by a further 10 on your second and third.
| 1 Loan | 2 Loans | 3 Loans | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Tenure (years) | ≤ 30 | > 30–35 | ≤ 30 | > 30–35 | ≤ 30 | > 30–35 | |||
| Age | ≤ 65 | > 65 | ≤ 65 | > 65 | ≤ 65 | > 65 | |||
| LTV | 75% | 55% | 55% | 45% | 25% | 25% | 35% | 15% | 15% |
| Min. cash | 5% | 10% | 10% | 25% | 25% | 25% | 25% | 25% | 25% |
TDSR, Income-Weighted Average Age & Loan Tenure
Beyond LTV, three more rules determine what a bank will actually approve — how much of your income can go toward debt, how a joint application's age is calculated, and how long you're allowed to repay.
Total Debt Servicing Ratio (TDSR)
- Caps all your monthly debt repayments — including the new home loan — at 55% of gross monthly income.
- Applies to every property loan in Singapore, HDB and private alike.
- Variable income (bonuses, commission, rental income) is only counted at 70% of face value.
- Banks stress-test your affordability at a minimum interest rate of around 4% p.a., even if your actual rate is lower.
- Existing debts count too — car loans, personal loans, and credit card balances all eat into your 55% headroom.
Income-Weighted Average Age (IWAA)
- When two or more people borrow together, banks don't use the youngest or a simple average age — they weight it by each borrower's income.
-
Formula:
Income-Weighted
Average Age (IWAA)=(Age A × Income A) + (Age B × Income B) Income A + Income BIWAA = (Age A × Income A + Age B × Income B) ÷ (Income A + Income B) - Example: A 58-year-old earning $8,000/month with a 32-year-old co-borrower earning $2,000/month gives an IWAA of about 52 — skewed toward the higher earner's age.
- A higher IWAA shortens your maximum loan tenure, so pairing with a higher-earning younger co-borrower generally works in your favour.
Loan Tenure
- Maximum tenure for the full 75% LTV is 30 years for private property (25 years for HDB loans), or until the borrower — or the IWAA — turns 65, whichever comes first.
- Some banks allow longer tenures, but this pushes your maximum LTV down, meaning a larger downpayment.
- A shorter tenure means higher monthly instalments but less total interest paid; a longer tenure spreads the cost but usually costs more overall.
| Item | |
|---|---|
| Purchase price | $2,000,000 |
| Bank loan (75% LTV, qualifying tenure & age) | – $1,500,000 |
| Downpayment (25% — all cash, since foreigners typically have no CPF account) | $500,000 |
| Buyer's Stamp Duty (BSD) | $69,600 |
| Additional Buyer's Stamp Duty (ABSD, 60% for a foreigner) | $1,200,000 |
| Total cash required | ≈ $1,769,600 |
That's roughly 88% of the purchase price in cash — because ABSD must be funded entirely in cash or other liquid assets (banks won't lend against it), and most foreigners have no CPF savings to offset the downpayment either. On top of this, budget a few thousand dollars more for legal and conveyancing fees. This example assumes the bank approves a 75% loan-to-value loan; actual terms depend on the buyer's income, age, and the bank's own assessment.