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What is a Bridging Loan and who is eligible?


Eye-level view of a modern house with a "For Sale" sign in the front yard

In Singapore, a bridging loan is a short-term loan that helps a property buyer “bridge” the gap between buying a new property and receiving the sale proceeds from their existing property.


It is commonly used when:

  • You are buying a new home before your current home is sold.

  • Your cash from the sale is tied up until completion.

  • You need temporary funds for the down payment, stamp duties, or part of the purchase price.

Bridging loans are usually offered by banks together with a home loan package.


How a bridging loan works

Example:

  • You sell your current flat for S$800,000.

  • But the sale completion is 8–12 weeks away.

  • Meanwhile, you need to pay part of the purchase price for your next property now.

A bridging loan lets you temporarily borrow against the expected sale proceeds from your existing property.

Once your old property sale completes, the proceeds are used to repay the bridging loan.


Types of bridging loans in Singapore

1. Capitalised Interest Bridging Loan

  • You do not pay monthly instalments during the loan period.

  • Interest is added (“capitalised”) into the loan amount.

  • Full repayment happens when the old property sale completes.

2. Simultaneous Repayment Bridging Loan

  • You pay monthly interest during the bridging period.

  • Principal is repaid after your existing property sale completes.


Typical loan tenure

Usually:

  • 6 months maximum

  • Sometimes shorter depending on the bank and transaction timeline

Who is eligible for a bridging loan?

Eligibility varies by bank, but generally you must:

Own an existing property that is being sold

Banks usually require:

  • A signed Option to Purchase (OTP), Sale & Purchase Agreement, or proof of sale

  • Expected sale proceeds sufficient to repay the bridging loan

Be purchasing another property

Bridging loans are normally tied to:

  • A new home purchase

  • An accompanying mortgage/home loan application

Meet standard home loan requirements

Including:

  • Adequate income

  • Good credit history

  • Acceptable Total Debt Servicing Ratio (TDSR)

  • Age requirements set by the bank

  • Citizenship or residency criteria

Be one of these borrower categories

Typically eligible:

  • Singapore Citizens

  • Permanent Residents

  • Sometimes foreigners (depends on the bank and property type)

Common uses in Singapore

People often use bridging loans for:

  • Upgrading from an HDB flat to a condo

  • Buying a resale HDB before completion of current flat sale

  • Property timeline mismatches

  • Paying Buyer’s Stamp Duty before receiving sale proceeds

Important things to note

Interest rates are usually higher

Bridging loans are short-term and may have higher rates than regular mortgages.

It is temporary financing

You should already have:

  • A confirmed sale

  • Expected sale proceeds

  • A clear repayment plan

CPF usage matters

For HDB transactions, CPF refunds from the sale may affect how much cash is available and how much bridging financing you need.

Banks in Singapore that offer bridging loans

Examples include:

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