Guide to loan-to-value (LTV) limits, based on type and number of housing loans you have

To protect homebuyers from over-borrowing, the Singapore government has set a loan-to-value (LTV) limit for housing loans. In a nutshell, the LTV limit defines the maximum home loan amount HDB or a financial institution can grant you as a percentage of the property’s price or market value (whichever is lower). 

The LTV for bank loans is now 75%, after the government announced a tightening of LTV limits on residential property loans by 5% across the board, together with other cooling measures in July 2018.

Most recently, the government lowered the LTV for HDB housing loans. During the National Day Rally in August 2024, it was announced that the LTV for HDB housing loans was reduced from 80% to 75%. Having a lower LTV means that buyers will have to commit to a bigger downpayment, in cash and/or CPF, when buying a property.

Regardless of whether you’re purchasing your first, second, or third property, we’ll walk you through all you need to know about the LTV limits, and how much extra cash/CPF funds you need as a downpayment for your new home.

LTV limit for HDB housing loans

As mentioned earlier, the LTV limit for HDB housing loans has been lowered from 80% to 75%. This means buyers will now have to fork out a 25% downpayment instead of the previous 20%.

Example A: Financing a 4-room HDB flat valued at S$500,000 using an HDB loan 

With a 75% LTV limit, your maximum loan amount will be S$375,000.

This means you’ll have to pay a S$125,000 downpayment with cash and/or CPF funds.

With a lower LTV, you’ll have to be prepared to pay more for your downpayment.

LTV limit for bank loans

For the first property loan

If you’re taking a bank loan and don’t have any outstanding housing loan, either one of these LTV limits is applicable to you:

• 75% LTV limit for a loan tenure of 30 years or less, with a minimum cash downpayment of 5%
• 55% LTV limit for a loan tenure of more than 30 years, or if the loan extends past the age of 65. The minimum cash downpayment will be 10%.

The remaining downpayment can be paid with cash and/or CPF funds.

Example B: Financing a 4-room HDB flat valued at S$500,000 with a loan tenure of 25 years

The maximum loan obtainable with a 75% LTV is S$375,000.

This means you have to fork out a downpayment of S$125,000 with cash and CPF funds. Out of this downpayment, S$25,000 (5% of purchase price or valuation) has to be paid in cash.

Example C: Financing a 3-bedroom condo valued at S$1.5 million with a loan tenure of 30 years 

For a S$1.5 million condo and an LTV limit of 75%, the maximum loan amount obtainable is S$1,125,000.

So the downpayment will be S$375,000 in cash and CPF funds. Out of this amount, you’ll have to pay S$75,000 in cash.

Calculate your home loan instalment with 99.co’s mortgage calculator.

For the second property loan

If you’re already servicing one housing loan, the LTV applicable will be lower. On top of that, the minimum cash downpayment will be higher at 25%.

• 45% LTV for a loan tenure of 30 years or less
• 25% LTV for a loan tenure of more than 30 years, or if the loan extends past the age of 65

Example D: Financing a 3-bedroom condo valued at S$1.5 million with a loan tenure of 30 years

With an LTV of 45%, the maximum loan amount you can get is S$675,000.

So you would have to pay S$825,000 with CPF and cash, including a minimum of S$375,000 in cash.

The more housing loans you’re servicing, the lower the LTV limit you’ll have for the subsequent loan.

For the third property loan

To prevent people from overleveraging, the LTV will be even lower if you’re already servicing two housing loans.

Like those taking a second property loan, the minimum cash downpayment will be 25%.

• 35% LTV for a loan tenure of 30 years or less
• 15% LTV for a loan tenure of more than 30 years, or if the loan extends past the age of 65

Example E: Financing a 3-bedroom condo valued at S$1.5 million with a loan tenure of 30 years

With an LTV of 35%, the maximum loan you can get is S$525,000.

This means that the downpayment will be S$975,000, with a minimum of S$375,000 to be paid in cash.

Speak to 99.co’s mortgage broker to find out more on which home loan is best for you.

What if I have an outstanding housing loan but intend to sell my HDB flat to upgrade? 

In this case, you can be treated as someone with no outstanding housing loans. According to UOB, the outstanding home loan on your flat will not affect the maximum loan amount you can get for the new property.

But you’ll need to provide documents such as a copy of the approval letter from HDB and a copy of a letter of undertaking to complete the sale of your HDB flat.

[Additional reporting by Virginia Tanggono]

How can I increase my LTV limit?

• Increase your down payment: One way to increase your LTV limit is to increase your down payment. The higher the down payment, the lower the loan amount, and the higher the LTV limit.
• Reduce your loan tenure: Another way to increase your LTV limit is to reduce your loan tenure. The shorter the loan tenure, the lower the loan amount, and the higher the LTV limit.
• Improve your credit score: A good credit score can increase your chances of getting a higher LTV limit. Banks consider credit scores when assessing the risk of lending money, and a good credit score can help you negotiate better loan terms.
• Apply for a joint loan: Applying for a joint loan with a co-borrower can increase your LTV limit. Banks consider the combined income and creditworthiness of both borrowers when assessing the risk of lending money, which can result in a higher LTV limit.
• Choose a shorter loan tenure: Choosing a shorter loan tenure can increase your LTV limit. The shorter the loan tenure, the lower the loan amount, and the higher the LTV limit.
• Reduce your debt-to-income ratio: Reducing your debt-to-income ratio can increase your LTV limit. Banks consider your debt-to-income ratio when assessing the risk of lending money, and a lower ratio can result in a higher LTV limit.
• Choose a property with a higher valuation: Choosing a property with a higher valuation can increase your LTV limit. The LTV limit is based on the assessed property value, so a higher valuation can result in a higher LTV limit.

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What do you think of the new LTV limit for HDB housing loans? Let us know in the comments section below. 

If you found this article helpful, 99.co recommends How to apply for a HDB Loan Eligibility (HLE) letter and In-Principle Approval (IPA) for home loans: What is it and how do you get it?

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Frequently Asked Questions (FAQs)

What is LTV?

LTV stands for Loan-to-Value. It refers to the maximum amount you can get for a housing loan from a financial institution. For example, a 60% LTV means that you can borrow up to 60% of the purchase price or valuation of the property, whichever is lower.

Can I get a housing loan for a second property?

Yes, you can. The LTV for a second property is 45%, or 25% if the loan tenure is longer than 30 years or if it extends past the borrower’s 65th birthday.

What types of LTV ratios are there?

There are two primary types of LTV to consider when buying a property locally: the HDB housing loan LTV and bank loan LTV, with a maximum ratio of 75%, respectively.

What factors affect the loan-to-value (LTV) ratio?

The following are the main factors that will establish your LTV limit, including:

• Your age
• The number of housing loans you currently have
• Your loan duration
• The property’s condition or location
• Your credit score or rating