What is Loan-to-Value (LTV)?

Key takeaways

• MAS describes the LTV limit as what determines the maximum amount an individual can borrow from a financial institution for a housing loan, and LTV as the loan amount as a percentage of the property’s value: in its example, SGD 150,000 borrowed to buy a property valued at SGD 1,000,000 is an LTV of 15%. MoneySense writes it as loan amount ÷ property value. For its own loan, HDB expresses the limit as a percentage of the lower of the purchase price or the value of the flat.
• For loans from financial institutions to individuals, where the option to purchase was granted on or after 6 July 2018, MAS sets the limit by the number of outstanding housing loans: 75% or 55% with none (minimum cash downpayment 5% at 75%, 10% at 55%), 45% or 25% with one, and 35% or 15% with two or more (minimum cash 25%). Where the borrower is a shell company or not an individual, the limit is 15%. MAS Notice 632 (Amendment) 2025, in force from 22 August 2025, changed none of these percentages.
• The lower limit in each pair applies where the loan tenure is over 30 years (over 25 years for an HDB flat), or the loan runs past the borrower’s age of 65; under MAS’s rules, joint borrowers are assessed on their income-weighted average age. MAS’s explainer gives the maximum tenure of a housing loan from a financial institution as 30 years for HDB flats and 35 years for non-HDB properties; under MAS Notice 632, a bank loan for an HDB flat may run up to 35 years only where the borrower provides a Letter of Invitation from HDB — a letter inviting the borrower to select a flat from a sales exercise launched before July 2013. The LTV percentages date from July 2018, when MAS, MOF and MND tightened the limits on all housing loans from financial institutions by 5 percentage points — a first loan for an individual went from 80% (or 60%) to 75% (or 55%) — and said the revised limits do not apply to loans granted by HDB. Those 2018 changes covered the LTV percentages; the tenure caps above are separate.
• An HDB loan can be up to 75% of the purchase price for a new flat, or of the lower of the resale price or value for a resale flat; HDB pro-rates the limit from 75% where the flat’s remaining lease does not cover the youngest applicant to the age of 95 at the point of flat application. With effect from 20 August 2024 HDB lowered the limit from 80% to 75%, for complete resale applications received from that date (where HDB has both the sellers’ and buyers’ portions) and flat applications from the October 2024 sales exercise, which HDB says brings it in line with the 75% limit for loans from financial institutions. MoneySense adds that an HDB loan is subject to HDB’s credit assessment.
• The limit is applied to a value, not simply the price. Under MAS Notice 632, V for a bank loan to buy residential property is the Adjusted Purchase Price — the price less any discount, rebate or other benefit from the vendor or another party, and less any loan interest paid or payable by the vendor or someone acting by arrangement with the vendor — or the current market valuation, whichever is lower; for a resale HDB flat whose option to purchase (or, without one, the sale and purchase agreement) is dated from 1 January 2018, it is the value HDB confirms on the HDB Flat Portal, less the same discounts, rebates and benefits, or, where one has been obtained, the current market valuation, whichever is lower. The bank may lend an individual at most the lower of LTV% × V and (100% − Cash%) × V minus the CPF used, and may not pay it out until the buyer has paid at least the price minus that maximum loan, including the minimum cash, from funds not borrowed from an MAS-regulated financial institution, a moneylender or the vendor.