Commercial loan interest rate Singapore
Commercial loan & Industrial loan interest rate Singapore
Commercial loan interest rate Singapore floating rate
Commercial loan interest rate Singapore fixed rate
Updated on 24 March 2025
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Purpose
· Purchase financing
· Refinancing outstanding property loan from another FI
· Working capital financing secured against CIP properties (For operating companies)
Type of Commercial Properties
· Zoned for commercial use
· Shop Unit
· HDB Shophouse (Residential component: 15% LTV)
· Pre/Post-War Shophouse
· Office Unit/Retail Unit
· SOHO (only property zoned for commercial use)
Use of Property
· Owner-Occupied
· Investment use (Tenanted)
Tenure
· Min. 5 years
· Max. up to 25 years (up to age 75 years of the youngest guarantor)
Remaining leasehold:
· JTC properties: 10 years
· Commercial: 20 years
Loan To Value (LTV)
Owner-Occupation: up to 90%
Investment: up to 80%
Company Profile
Operating Company
· Company that performs business operations
· Hires employees, sells goods and services, earns revenue from its operations, and incurs operating expenses.
· Assessment based on profitability and sustainability of the company
Holding Company
· Newly set up company
· Company without genuine business operations
· Purely set up for the property purchase
· For the purpose of collecting rental proceeds
TDSR Assessment
What is the purpose of total debt servicing ratio (TDSR)?
. To ensure that borrowers don’t take on more debt that they can handle and that financial institutions lend responsibly.
· To ensure loans are only issued to borrowers who can afford them, and help borrowers consider the true budgetary impact of a mortgage.
ALL shareholders are subject to TDSR assessment
Threshold for property loans is set at a maximum of 55% of the borrower’s monthly income
Assessment Criteria – Company Structure
Holding Company
Director 1 40% Shareholder
Director 2 30% Shareholder
Director 3 30% Shareholder
· ALL shareholders are subjected to TDSR
· ALL to come in as loan guarantors
Holding Company
Director 20% Shareholder
Operating company 80% Shareholder
· TDSR exemption
· Loan guarantors: Corporate guarantee / Ultimate Beneficiary Owners
. Assessment based on operating company
Assessment Criteria – Loan to Value
Use of Property
. Owner-Occupied
. Investment use (Tenanted)
Loan To Value (LTV)
Owner-Occupation Up to 90%
Investment Up to 80%
Holding Company Rents back to Operating Company get up to 90% loan
When both company have common directors
Holding Company
Director A 30% Shareholder
Director B 70% Shareholder
Operating Company
Director A 30% Shareholder
Director B 70% Shareholder
Assessment Criteria – Loan Tenure
Tenure
· Min. 5 years
· Max. up to 25 years (up to age 75 years of the youngest guarantor)
Remaining leasehold:
· JTC properties: 10 years
· Commercial: 20 years
Example 1
Subject Commercial property leasehold: Freehold
Director A: 40yo
Director B: 55yo
Eligible loan tenor:Â 25 years (freehold – 20 years = max 25 years)
Example 2
Subject JTC property leasehold: 60yrs wef 1/1/2007
Balance leasehold: 42 years
Director A: 40yo
Director B: 55yo
Eligible loan tenor:
22 years (On paper) (42 years – 20 years for JTC property = 22 years)
25 years (Discretionary) (use younger age can loan up to 25 years)
What affects your eligibility?
CBS Report: Â Personal liabilities and repayment conduct
Existing guarantee under related companies:
· Retrieval of individual ACRA to ascertain if there are any related entities
· Debt obligations will be included in the assessment
TDSR passing at 55%
· Income: 30% haircut of NOA
Adverse news
Example Calculation
NOA Reported income of $255,642
Monthly income:
$255,642 / 12 = $21,303.50
Less 30% haircut: $14,912.45
55% = $8,201.85
In the event if we require to boost loan eligibility:
Rental Income
· Supplemented with TA and stamp certificate
· Remaining tenancy of >6 months validity
· Includes existing property under individual and proposed subject property
Extend loan tenor
· Any younger guarantor?
Show funds
· Required at the point of submission and prior to disbursement
· Unable to use funds for down payment
Pledge FD
· 4 years
Looking for a banker that can offer the max loan to value & can match any bank’s rate?