With the development of the global economy, an increasing number of Permanent Residents (PRs) are choosing to purchase property in Singapore. Besides for their own stay, properties can also be rented out or held for a period and then sold, serving as a dual-purpose long-term investment. Singapore, with its sound and robust infrastructure, livable environment, favorable investment conditions, and pro-business environment, has attracted a large number of PR property buyers. However, before taking action, it is crucial for buyers to fully understand Singapore’s mortgage interest rate policies. Today, let’s take a deep dive into how Permanent Residents can get a loan to buy a house in Singapore, as well as related issues concerning Singapore’s mortgage rates and bank loans.
It must be clarified that, according to Singapore government regulations, Permanent Residents can only purchase resale HDB flats (with restrictions) and private condominiums. They cannot buy landed properties on the main island of Singapore or new HDB flats. Singapore’s property tenure mainly comes in three forms: 99-year leasehold, 999-year leasehold, and freehold. Generally, the choice of which leasehold category of property to buy is a personal decision. For specific advice, you can consult a professional Singapore real estate agent to get expert opinions on your purchase.
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Singapore Property Loan Policies for Permanent Residents (PRs) to Understand
Here are the important aspects of Singapore’s housing loan policies to understand: For Permanent Residents, it is possible to obtain a loan from a bank or other financial institution to purchase property in Singapore, and the loan amount can be up to 75% of the property price, making it relatively easy for PRs to buy property in Singapore. An individual’s mortgage loan amount varies depending on the number of outstanding housing loans the borrower has. The specific loan amounts and down payment percentages are shown in the table below:
Singapore Housing Loan-to-Value (LTV) Limits and Down Payment Ratios
| Loan-to-Value (LTV) Limit | Minimum Cash Down Payment | |
| First Housing Loan | 75% | 5% |
| Second Housing Loan | 45% | 25% |
| Third Housing Loan | 35% | 25% |
*Source: Monetary Authority of Singapore (MAS)
If the loan tenure exceeds 30 years, or if the applicant is over 65 years old at the end of the loan tenure, the LTV limit and down payment ratio will be as follows:
| Loan-to-Value (LTV) Limit | Minimum Cash Down Payment | |
| First Housing Loan | 55% | 10% |
| Second Housing Loan | 25% | 25% |
| Third Housing Loan | 15% | 25% |
*Source: Monetary Authority of Singapore
Singapore Mortgage Rates
In terms of Singapore mortgage rates, the loan rates offered by banks currently in the market are also very attractive, ranging from 2% to 3%. Therefore, if you have the idea of investing in property in Singapore, you can also choose to use a loan to leverage your investment, which can significantly reduce financial pressure.
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Types of Mortgages in Singapore
Before taking out a home loan, you also need to understand the two types of housing loan services in Singapore: fixed-rate and floating-rate. As the name suggests, a fixed rate means that the interest rate remains unchanged throughout the loan repayment period, which can protect you from losses due to future interest rate hikes. However, if interest rates fall during your repayment period, you will still have to pay interest to the bank at the original rate.
A floating rate is also easy to understand; it fluctuates with market interest rates. The choice of which type of mortgage to take depends on your own needs, and it is best to make a decision after consulting with a professional real estate expert.
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The Process for Permanent Residents (PRs) to Get a Property Loan in Singapore
After a preliminary understanding of the relevant information and policies for housing loans in Singapore, the most important question is: how can a Permanent Resident get a loan from a Singaporean bank to buy a house? Firstly, only banks fully licensed by the Monetary Authority of Singapore can provide loans to homebuyers. The most common are the 3 local banks and 7 localized foreign banks. For a list of banks, you can also consult our property advisors.
Secondly, you need to prepare the necessary documents for a home loan application;
1. Option to Purchase (OTP) or Sale and Purchase Agreement for the property
2. Home loan application form (completed and signed)
3. Your NRIC and a copy, or passport and a copy
4. Proof of income (latest 3 months’ payslips, with bank statements to prove salary is deposited into your bank account) or bank transaction statements
5. Latest Notice of Assessment from IRAS
6. Other required documents
Since proof of income was mentioned, the basic conditions for loan approval are also a key point to understand. Starting from the latest cooling measures introduced on December 16, 2021, homebuyers must meet the requirement that their monthly mortgage installment does not exceed 55% of their monthly income, which involves a complex calculation. If you have already decided to take out a bank loan to purchase a property and wish to further understand if you meet the aforementioned loan approval conditions, feel free to consult us, and we will do our best to assist you.
Things to Note for Permanent Residents (PRs) Buying Property in Singapore
There are also some things Permanent Residents need to be aware of when buying property in Singapore: First, you will need to hire a lawyer to handle the relevant procedures during the property purchase process; second, Permanent Residents are required to pay an Additional Buyer’s Stamp Duty (ABSD) of 5% when purchasing property in Singapore; third, according to Singaporean law, all legal documents signed by individuals under the age of 21 are invalid and not legally protected. However, if a minor can pay for the property in full, it can be purchased through a trust.
Regarding the issues related to Permanent Residents getting a loan to buy a house in Singapore, we have provided you with a preliminary explanation of the policies. If you would like to learn more about applying for a housing loan in Singapore, feel free to contact us for a discussion. We will provide you with more detailed, free consultation services.
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