By MoneyBees
The bridging loan you need for your next home's down payment before your sale completes, interest over up to 6 months, and whether the sale cash repays it after CPF.
A short loan to buy your next home while waiting for money from selling your current one. MAS defines it as a loan that must be repaid within six months from the sale proceeds.
It depends on your bank. DBS publishes up to 20% of the purchase price of the new home. The loan is usually what you need for the down payment, less the cash and CPF you already have.
No. MAS exempts bridging loans from the 55% TDSR and the 30% MSR. They are also outside the loan-to-value limits.
Up to six months under MAS's definition. If your sale takes longer to complete, speak to your bank before you commit to the purchase.
On the amount you borrow, at the bank's rate, for the months until your sale completes. S$175,000 at 4.5% a year for 4 months is S$2,625.
From your sale. The proceeds first repay your outstanding housing loan and refund the CPF you used with accrued interest. The cash left repays the bridging loan.
The CPF refund goes back to your Ordinary Account and can go towards the new home. Plan to repay the bridging loan from the cash part of the sale.
HDB does not offer a general bridging loan. Banks offer them, mainly to people buying private property while selling their current home.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).