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Getting a mortgage in Singapore

Looking for expert advice about mortgages in Singapore? Here’s where you can find it.

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By Pete Mugleston   Mortgage Advisor

Last updated: 25th April 2019 *

With its tropical climate, modern architecture, cultural diversity and lower income tax rate, Singapore is fast becoming one of the most sought after locations for property.

Although English is the local business language in Singapore, it can be confusing to negotiate as a non-native, especially if you are unfamiliar with the local market and property taxes.

This can leave many feeling unsure about where to begin and who to turn to for advice.

The good news is that getting a mortgage in Singapore needn’t be difficult. To help you through the process, talk with one of the advisors we work with who are experts when it comes to mortgages overseas.

We’ve created this guide with lots of helpful tips including where you can turn to for advice.

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How do mortgages work in Singapore?

Singapore is a small island roughly the same size as The Isle of Wight. With limited space and high demand for property, the price of a home can be expensive.

The average cost of a one bedroom apartment is S$200,000, which is about £111,000 in sterling.

To establish whether or not you can afford your Singapore mortgage as a non resident, lenders may look at your:

  • Employment type
  • Age
  • Any bad credit or debt you have
  • Income
  • Property type

Is it harder to get a mortgage in Singapore?

Often lenders can be reluctant to loan larger amounts of money and so a smaller mortgage, in the right circumstances, could make the process of finding a lender easier.

That’s not to say larger mortgages in Singapore are impossible to come by. With the help of a specialist international broker, you will stand the best chance of finding a lender who’s happy for you to borrower a higher amount - make an enquiry to speak with one today.

Do you need proof of employment to get a mortgage in Singapore?

Many people have aspirations to live in Singapore but are unaware of the strict employment laws that regulate the ability of foreigners to work in the territory. .

You may find that the local authorities take a dim view of foreigners coming into the country on a tourist visa looking for work.

This can affect whether or not you are accepted for a mortgage as lenders will want to see evidence that you have enough income to pay it off. .

Therefore, before making a mortgage application, it is vital to secure an ‘offer in principle’ and then an employment pass from the Ministry of Manpower.

Can you get a mortgage in Singapore if you’re self employed?

It may be possible under the right circumstances to get a mortgage in Singapore as a self employed worker.

Your approval for a mortgage will be subject to affordability checks and you may be required to give a larger deposit of up to 40% of the property’s  market value.

Additionally, the amount of debt you have can not exceed 70% of your take home pay.

Can you get a mortgage in Singapore with ‘bad credit?’

The Monetary Authority of Singapore has rules regarding the amount of debt an individual can take on, which can not only affect the maximum size of your mortgage but also whether or not you are approved.

The rules state that your monthly debt payments cannot exceed 60% of your total take home pay.

Therefore, if you have a monthly income of £2,000, your debts, including mortgage payments, credit cards and car payments cannot exceed £1,200.

This rule can also make it more difficult for applicants with ‘bad credit’ to get a mortgage in Singapore, especially if the amount of debt is close to or exceeds 60% of their monthly income.

If you have bad credit, there may be other options available.

Speak to an advisor to discuss your options or for more information on how bad credit can affect your mortgage application, see our bad credit information section here.

How much could you borrow with an international Singapore mortgage?

Although the rules and processes surrounding mortgages can be more tasking in Singapore, it may be possible to get a mortgage in the right circumstances.

For those applicants with good credit history and sufficient income, the average Loan to value (LTV) tends to be around 60-80% of the purchase or valuation price (whichever is lower.)

So, for example, if you wanted to buy a property in Singapore worth S$200,000 and your lender agrees to loan you 80% of the property’s  market value, they would give you a mortgage of S$160,000.

This would mean that you need a 20% deposit of S$40,000.

This Loan to Valuation Ratio (LTV) will vary depending on the age of the borrower and the amount of outstanding loans already held.

For more information on how much you could borrow with an international Singapore mortgage speak to an advisor.

Where to buy in Singapore

Of course, the location of your property will affect the size of your mortgage. Larger loans can be harder to obtain so a cheaper property could increase the likelihood of being approved for a mortgage.

Areas such as Tanglin Halt and China Square can be more expensive with properties costing anywhere between S$727 and S$799 per square foot.

If you were looking for a more modest price, areas including Jelebu and Yunnan can be significantly cheaper with the cost per square foot ranging between S$362 and S$369.

You may also want to consider that the humidity in Singapore which can be tasking.

Many expats opt for properties within a close proximity to local transport to avoid long walks in the heat.

Things to consider when getting a mortgage in Singapore

There are a number of other factors you should take into account before pursuing a mortgage in Singapore, and they include...

The language

Many borrowers initially worry that contractual information regarding the terms of their mortgage can be lost in translation, however often both the seller of the property and the lender are both fluent in English.

In fact, the most commonly spoken language in Singapore is English, closely followed by Malay and Tamil.

Do you pay stamp duty in Singapore?

Yes. Stamp Duty is payable on the actual price or market price (whichever is higher) of the property after you agree to purchase it.

Read the table below to see how Stamp Duty is calculated.

Payment Schedule % of Stamp Duty
First S$180,000 1%
Next S$180,000 2%
Next S$640,000 3%
Remaining Amount 4%

How much Stamp Duty is charged on a second property mortgage in Singapore?

If you buy more than one property in Singapore, you will be charged Additional Buyer’s Stamp Duty (ABSD) on top of the standard Stamp Duty as above.

As a non-resident of Singapore you will be charged as follows:

1st Property Purchase 2nd Property Purchase 3rd Property Purchase
15% 15% 15%

Where can you find a Singapore mortgage calculator?

Although online mortgage calculators, found on many financial websites, can provide a quick estimate, they can’t take all factors that may affect your mortgage into consideration.

For example, someone with ‘bad credit’ may use a mortgage calculator to work out their Singapore mortgage but may receive a quote that is completely inaccurate.

This is because the calculator doesn’t factor in that each lender will assess a borrower differently. One may decline bad credit applicants whilst another may accept if the bad credit occurred 3 years ago or more.

For an accurate quote that takes the finer details into consideration, speak to a specialist.

What are your finance options for a mortgage in Singapore?

Whether you’re looking to buy in Singapore for capital gains, a family home or rental income, there are a few mortgage options that may be suitable for you. These include:

  • Using a lender in Singapore
  • Using a lender based in the UK
  • Raise capital on a property you already own

A lender in Singapore

Using a lender in a different country can put some borrowers off, especially if they aren’t fluent in the local language. As well as this, some borrowers question whether they can access the best deal as a non-resident.

However, there are attractive rates available from a number of lenders and banks in Singapore to both local borrowers and non-residential borrowers.

It can be really beneficial to work with a mortgage broker who has knowledge of the property market and the interest rates available in both Singapore and the UK.

UK-based lender  

Dealing with a UK bank can be a more familiar process and having a lender who speaks the same language as you can also make understanding the terms of the mortgage agreement clearer.

There are a range of banks and lenders in the UK that provide international mortgages although, you might find that a british lender lacks the local market expertise. This can sometimes result in inaccurate valuations and therefore lower loan to value (LTV) rates.

To avoid this, speak to a broker who has experience with handling mortgages in Singapore as they will have a better understanding of property values in the area you are buying and how much you should expect to pay.

Remortgaging a property you already own

If you already own a property, you could consider remortgaging it to buy a property in Singapore.

Some lenders also offer higher loans to borrowers who own more equity. That being said, remortgaging can be a risky option.

If you were to  default on your Singapore mortgage, you could end up losing the property you initially borrowed against.

Contact an advisor here to discuss the best financing options for you.

Get the best advice from an international mortgage broker

Applying for a mortgage for an overseas property in Singapore can be a daunting process but with the advice and professional help of a mortgage broker, it doesn’t have to be.

An experienced mortgage advisor can carefully check any Singapore contacts and ensure that you understand the terms clearly before you sign anything.

Negotiating a mortgage offer can also seem unfamiliar and scary for some, which is why the advisors we work with can take the lead and do this on your behalf.

They can also manage any paperwork and have it sent to the correct authorities in apt time.

Find the best mortgage rates in Singapore

Banks in Singapore can offer competitive rates but to get the best deal, you need access to lenders both internationally and in the UK.

A mortgage broker who understands the property market in Singapore can take the time to compare rates and negotiate the terms of each mortgage agreement.

Thoroughly checking the market can save you money and also prevent unnecessary mortgage rejections on your credit file.

Knowing which lenders are more likely to accept you in the key to a successful mortgage application.

Speak to a Singapore mortgage expert today

If you have questions about getting a mortgage in Singapore and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

 Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 25th April 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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