Guide to Bank Housing Loans for Private Residential Property

· Buying A Property

Bank Housing Loans

A Guide

Procedure for application

Compare home loan packages and shortlist those that meet your criteria with competitive rates

Consider hiring a mortgage consultant who can help you find the best package for your needs and handle the paperwork

Interest rates can differ between banks

Terms of loan packages can also differ, such as lock-in period, fixed versus floating interest rates or rates pegged to the bank’s fixed deposit rates

Apply for Approval-in-Principle (AIP)

An Approval-in-Principle (AIP) is a conditional approval for home loans

An AIP lets you know your eligible loan quantum and monthly mortgage payable

Having an AIP before booking prevents the forfeiture of your booking fee should there be hiccups in the process of mortgage approval

Some sellers will not proceed with a sale to buyers without an AIP

The bank will need to know details such as the type of property you intend to buy and your debt obligations including housing loan, car loan, personal loan and study loan

Submit documents such as recent pay slips, income tax statements and documents of credit facilities

An AIP is non-binding. You are free to shop around for the best interest rate

Submitting too many applications (more than 2 or 3) might affect your credit rating

Receive AIP

The bank will inform you on your loan eligibility after evaluating your application

The validity of the AIP ranges from bank to bank, typically one month

You can reapply if the AIP expires

Obtain indicative valuation

The bank will need the full address and built-in area of the property to give an indicative valuation

The amount of loan granted (LTV) is based on the lower of the purchase price or bank’s valuation of the property

The borrower will have to fork out more cash for the down payment if the purchase price is higher than the valuation as the bank will only loan up to 80% of the value of the property

Pay booking fee to seller or developer

Obtain Option to Purchase (OTP) and submit OTP to bank

Receive Letter of Offer (LO)

The LO is a contract stating the terms of the loan offered by the bank to the borrower

Sign Letter of Offer (LO)

This forms a binding contract between the bank and the borrower

Exercise OTP

Bank makes loan disbursement to seller upon completion of the Sale and Purchase of the property

Completion of Sale and Purchase typically takes about 12 weeks from the date of exercise of OTP

The bank will send a Loan Disbursement Advice and notice to start monthly repayment

Start monthly repayment for your home loan


We would love to help you get the most out of your property.

Should you be thinking of selling, or would simply like an update of where your property sits in today's market, book a non-obligatory discussion with one of our TemasekClass consultants.