Home Equity Loan & Cash Out Refinancing in Singapore (2025)

Private property only

Sorry, HDB flat owners. You are not allowed to transform your flat into a sum of cash. Home equity loans are available only for private property and executive condo (must pass 5-year minimum occupancy period), and even so, it's still subject to careful consideration by the bank. Your best bet is a fully paid-up private property, preferably one that has appreciated in value over the years.

Minimum loan amounts

Major local banks like DBS, UOB, and OCBC, along with foreign banks, typically don’t offer home equity loans in small amounts. While most of them impose a minimum loan threshold of $100,000, some exceptions may allow as low as $80,000—but that’s rare given the less favourable terms or higher interest rates. This is largely due to home equity loans involving property valuation and processing, legal fees, and risk involved, making them less practical for smaller sums.

Hence, if the available equity is too small or only a modest amount of cash is needed, a personal loan or business loan might serve as a more cost-effective and practical option, in spite of higher mortgage loan interest rates.

Home equity loan limits

Unfortunately, you can't borrow the entire value of your $2 million condo. First you will have to subtract any outstanding home loan and any CPF* that was used to pay for it. The final Loan-To-Value (LTV) limit amount you can borrow is subject to bank approval, but it won't be 100% of what's left—more like (up to) 75%. Finally, you will still be subject to general regulatory limits like 55% total debt servicing ratio (TDSR). This means that no more than 55% of your gross monthly income can be used to service your debt obligations like property loans.

*Note: CPF cannot be used to finance home equity loans.

Loan application costs

At this point, we should note that getting a home equity loan is a rather cumbersome and expensive affair. You will need to pay a few thousand dollars for the (compulsory) property valuation upfront. It also takes at least about 2 months to secure a home equity loan, so it doesn’t have the best liquidity and is definitely not for emergency needs.

Loan tenures

In Singapore, most banks offer home equity loans with tenures ranging from 10 to 30 years, depending on the borrower’s age and property type. Basically, the longer your loan tenure, the higher the interest rate might be.

Why? A longer loan tenure suggests that the bank will be taking on longer-term risk such as inflation and changing credit conditions. As a result, banks will factor these risks into their loan interest rates. For example, a 20-year loan tenure might carry an interest rate that’s 0.1% to 0.3% higher than a 10-year loan tenure. While this difference might seem small at first, it adds up significantly over time, especially on larger loan amounts.

Lender policies

Individual lender policies also play a part influencing your home equity loan’s interest rate. Each bank—regardless of local or foreign—will offer slightly different rates depending on their internal credit risk models.

Aspects they’ll consider include credit score, income stability, loan amount, and private property type (e.g. condo vs landed). These factors help banks determine the risk profile of prospecting borrowers. For instance, a high-income homeowner with a fully paid-up freehold condo may get better home equity loan interest rates than another homeowner with a partially paid leasehold property and variable income.

Loan-to-value (LTV) ratio

The loan-to-value (LTV) ratio for a home equity loan refers to the percentage calculated by dividing the loan amount by your property’s appraised value—in other words, it’s the portion of your home’s value that can be borrowed.

Essentially, the LTV limit is affected by the number of properties you own and/or if you have any existing property loans:

Nature of home equity loan

Similar to SORA-pegged home loans, home equity loans can come in both floating-rate and fixed-rate forms.

Floating-rate home equity loans are usually the most common option in Singapore where rates are pegged to the bank’s internal board rate (not to be confused with SORA) and are subject to change at their discretion. Loan repayments will increase or decrease accordingly. Hence, the standard loan structure follows a “board rate + spread” (BR + 1.5%) formula*.

Conversely, fixed-rate home equity loans are less common, usually for the first 1 to 3 years. But more importantly, after this fixed period, the loan then reverts to a floating-rate loan. As a result, these types of fixed-rate loans are more useful for borrowers preferring predictability in the early years, especially during high-interest environments like 2025.

In any case, not all banks offer both options. Thus, you should always compare the effective interest rate (EIR) and lock-in clauses before committing to any interest packages—be it floating-rate or fixed-rate.

*”Board rate” refers to the internal interest rate set by the bank and is not tied to any external benchmarks like SORA. “Spread” refers to the fixed percentage that banks include in addition to the board rate to account for extra costs like risk profile, loan tenure, and lender policies.

Market conditions and economic trends

Interest rates in Singapore are tied to global economic conditions, especially movements by the US Federal Reserve. If Fed rates remain elevated to fight inflation, Singapore banks may raise their interest rates in response. In turn, this affects floating-rate home equity loans the most as it raises the costs of borrowing—even for loans already disbursed. Hence, if you have a lower risk appetite and prefer stability, it’s recommended to lock in a favourable fixed rate instead.