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LTV – Loan To Value Ratio

LTV – Loan To Value Ratio

Knowing LTV – Loan To Value Ratio

LTV or loan to value ratio is used to determine the amount of loan taken out on a property in relation to its value expressed as a percentage. By knowing your LTV, you will have a better assessment whether your intended loan application can be approved by your bank. Beginning from 2014, there is an increasing trend in the number of properties putting up at the property auctions due to unpaid mortgage installment by the owners to the banks. This further validates the reasons why cooling measures are in placed by our government until today to avoid overheating of our property market.

The LTV limit takes into account credit facilities, if any, granted by other financial institutions and the property seller. Any discount, rebate or other benefit offered by any person to the borrower must be deducted from the purchase price before calculating the amount of the loan. 
What will Singapore Banks consider while assessing to determine LTV and to approve your loan application?

• Existing loan(s)
• Tenure
• Monthly repayment instalment as a proportion of gross monthly income

You may be able to get a bridging loan if you have a residential property which you have agreed to sell, but will only receive the sales proceeds later. The maximum LTV at which banks in Singapore may finance your property is as set out in the following table for the relevant scenarios.

 

To purchase a HDB flat with no outstanding housing loan and if:• the tenure is < 25 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

To buy a private property with no outstanding housing loan and if:

• the tenure is < 30 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

80% LTV
To purchase a HDB flat with no outstanding housing loan and if:• the tenure is > 25 years; or
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

To buy a private property with no outstanding housing loan and if:

• the tenure is > 30 years; or
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

60% LTV
To purchase a HDB flat with 1 existing outstanding housing loan and if:• the tenure is < 25 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

To buy a private property with 1 existing outstanding housing loan and if:

• the tenure is < 30 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

50% LTV
To purchase a HDB flat with 1 existing outstanding housing loan and if:• the tenure is > 25 years; and
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

To buy a private property with 1 existing outstanding housing loan and if:

• the tenure is > 30 years; and
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

30% LTV
To buy a HDB flat with 2 or more existing outstanding housing loans and if:• the tenure is < 25 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

To buy a private property with 2 or more existing outstanding housing loans and if:

• the tenure is < 30 years; and
• the sum of the tenure and the borrower’s age at the time of application is < 65 years.

40% LTV
To buy a HDB flat with 2 or more existing outstanding housing loans and if:• the tenure is > 25 years; or
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

To buy a private property with 2 or more existing outstanding housing loans and if:

• the tenure is > 30 years; or
• the sum of the tenure and the borrower’s age at the time of application is > 65 years.

20% LTV

Last updated on 09 Mar 2015

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