Invest in Property - Home Loans

Option Fee

A portion of the purchase price that must be paid before an Option to Purchase (OTP)* is issued. The amount is negotiable and typically varies from 1% to 5% of the purchase price. The OTP will be valid for a period agreed by you and the seller, during which you own the sole right to purchase the property. To exercise the OTP, you will have to pay 5% or 10% of the purchase price less the booking fee. The first 5% of the purchase price must always be in cash and the balance can be a combination of cash and/or Central Provident Fund (CPF) savings^.

Stamp Duty

Stamp duty is imposed on documents executed for the sale and purchase of a property. Duty will be computed on the purchase price or market value of the property (whichever is higher).

Computation of Stamp Duty*

Duty payable at ad valorem of the purchase price (PP):

Stamp duty is to be paid within 14 days from the date of acceptance of the OTP or Sale and Purchase (S&P) Agreement. For more information, please visit www.iras.gov.sg.

* Stamp duty amount is subject to change.

Legal Fees

The costs for legal services rendered in the purchase of the property and preparation of mortgage documentation relating to the bank loan, which may be paid via CPF.

Housing Agent's Commission and Fees

A fee paid to the housing agent engaged for the purchase and/or sale of the property. The quantum or amount of the commission is based on a certain percentage (varying from 1% to 2%) of the purchase price.

As a general guide, your monthly long-term repayment commitment should not exceed 40% of your monthly income.

Disbursement of Loan Amount

1. For completed properties*, the loan will generally be disbursed in one lump sum when you take over the property (also known as legal completion).
2. For uncompleted properties^, the loan will be disbursed in stages (progressively), depending on the stage of construction of the property.

General Schedule for Progressive Payment(s)

Loan Tenure

Banks generally grant loans with a minimum tenure of 5 years up to a maximum of 35 years, provided that you must not be more than 70 years old by the end of the tenure.

Interest Rate

The interest rate varies depending on the type of property and the type of home loan package. Please check with your bank for the applicable interest rate package.

Your monthly mortgage instalments can be paid in cash or with CPF savings .

To estimate your monthly mortgage instalment, please use our Monthly Repayment Calculator.

Property Tax

The tax on all immovable properties (houses, buildings or land). All property owners are liable to pay property tax. It is payable based on a percentage (Tax Rate) of the Annual Value (AV) of a property. The AV of the property is the estimated annual rent of the property. The Tax Rate is 10% per annum but if you purchase and occupy a residential property, you can claim the concessionary rate of 4% per annum. For more information, please visit www.iras.gov.sg.

Fire Insurance

An insurance policy that covers the reinstatement value or outstanding loan, whichever is lower, in the event that the property it insures is destroyed by fire. The coverage does not include home renovations, moveable household contents and personal belongings.

Mortgage Insurance

A mortgage reducing term insurance policy that provides for the repayment of your outstanding home loan in the event of Death, Terminal Illness or Total and Permanent Disability.

The insurance payment may be higher or lower than the outstanding home loan, depending on your choice of interest rate and the initial sum insured. To find out more, click here. For home contents coverage, click here.

Conservancy or Maintenance Fees

Fees collected for the purpose of maintenance and use of common property (e.g. tennis courts, lifts, common areas, etc).

Approval-In Principle

To ease your mind, you can obtain an Loan Eligibility Check* (AIP) from the bank for your financing before you commit to your purchase. This will give you a clearer picture of your loan eligibility.

Credit assessment checks that you will be subject to upon your request for a loan:

1. Proof of regular income (e.g. Income Tax Notice of Assessment / latest computerised payslip / CPF contribution statement for the last 12 months)
2. Credit bureau checks (e.g. Good payment records for credit cards / previous or existing loans, no previous blemishes such as discharged bankrupts)

Two main criteria banks use to access your loan eligibility:

• Financial Commitment-to-income Ratio

  A computation of your total monthly debt obligations (e.g., other home loan commitments, car loan, overdraft facilities, etc) to your total monthly gross income. This is to determine your repayment ability.

  As a rule of thumb, your total financial commitment for loans per month should not exceed 40% of your household income.

• Loan-to-value (LTV) ratio

  The amount of loan on a property in relation to its value expressed in percentage. The maximum LTV at which banks in Singapore may finance your first property is 80% of the purchase price or property's current market value whichever is lower. However, if you have any existing home loan(s), based on recent government rulings, you are only eligible for financing up to a 60% LTV. To find out more, click here.

  As a rule of thumb, your total financial commitment for loans per month should not exceed 40% of your household income.

  Factors that determine the LTV:

  • Use of property for owner-occupation or investment
  • Existing loan(s)

At DBS, we offer a comprehensive range of home loan packages, with customisable rates, to suit your unique financing needs. In addition, we offer attractive renovation loans as well as bridging loans to help ease your cash flow as you wait for your property sale proceeds.

The completion statement will show you the balance of the purchase price that you must pay after deducting any deposit, pro-rated property tax and utility charges, maintenance charges, and other applicable charges as well as any fees payable to the agent and the lawyer.

It is usually sent to you a few days before the legal completion date together with instructions on the mode of payment.

After you have settled the outstanding balance of the purchase price, the sellers lawyer will hand over the house keys and Transfer Document to your lawyer. Upon receipt of the Transfer Document, you assume the title of Owner.

Your lawyer will apply for the CT to be issued by the Singapore Land Authority on the same day. He will safeguard the CT until it is handed over to the mortgagee (the financing bank) if the property is mortgaged.

Collect the keys to your new home from your lawyer upon completion of your purchase, and upon receipt of TOP for uncompleted properties.