Home Loan Guide for New Launch Condos in Singapore: IPA, TDSR, LTV and Instalments
How bank loans work for an uncompleted condo: getting an IPA, TDSR and the 4% stress test, LTV tiers, progressive disbursement, SORA vs fixed packages, lock-ins, refinancing and a worked instalment example.
For most buyers, a home loan in Singapore is the largest financial commitment attached to a new launch, and it behaves differently from a loan on a completed home. The bank pays the developer in stages, your instalments grow as construction progresses, and the package you choose today may be refinanced long before you get your keys. This guide explains each step for buyers looking at LinkTown Residences (Hougang Central Residences), the private condo planned at the Hougang Central integrated development, with sales expected to open in early 2027.
Step 1: Get an In-Principle Approval (IPA)
An IPA (sometimes called Approval-in-Principle) is a bank’s preliminary confirmation of how much it is prepared to lend you, based on your income, debts and credit record. It is not a final offer, but it is the most useful document you can have before booking a unit, because if you book and then cannot get the loan you need, part of the booking fee is typically forfeited.
Apply for an IPA a few weeks before a launch. You will usually need income documents such as payslips and tax assessments, CPF contribution history and details of existing loans. IPAs are typically valid for a limited period, so time it around the expected preview. Showflat and preview dates for LinkTown Residences have not been announced.
Step 2: Understand TDSR and the 4% stress test
The Total Debt Servicing Ratio (TDSR) caps all your monthly debt repayments, including car loans, other mortgages, credit card minimums and the new housing loan, at 55% of gross monthly income. The new housing loan is not assessed at today’s rate but at a stress-test rate of 4% for private residential property.
The Mortgage Servicing Ratio (MSR) that applies to HDB flats and ECs bought from developers does not apply to private condos. TDSR is the binding test.
For variable or commission-based income, banks usually apply a haircut, and rental or foreign income may be discounted further. Joint borrowers can combine incomes, which is why many couples apply together.
Step 3: Know the LTV limits for a private property loan
| Your housing loans | Max LTV (standard tenure) | Minimum cash |
|---|---|---|
| No outstanding housing loan | 75% | 5% |
| One outstanding housing loan | 45% | 25% |
| Two or more outstanding housing loans | 35% | 25% |
The 75% figure applies to a first loan with a tenure of up to 30 years for private property. Longer tenures, or loans that run past age 65, attract lower LTV limits. The rest of the price is your down payment, from cash and CPF. If you are upgrading from an HDB flat with an outstanding HDB loan, the second-loan limits may apply unless the flat is sold first; our HDB upgrader guide walks through that sequence.
Worked example: how much can you borrow, and what does it cost?
Take an illustrative 3-bedroom at LinkTown Residences: 1,066 sq ft at an analyst-estimated S$2,500 psf, or S$2,665,000. This is an estimate, not an official price.
- 75% loan: S$1,998,750
- Your 25% down payment: S$666,250 (at least S$133,250 in cash)
Monthly instalments use the standard amortisation formula, M = P × r ÷ (1 − (1 + r)−n), where P is the loan, r the monthly rate and n the number of months. Assuming an illustrative interest rate of 3% a year, which is an assumption for this example and not a quote:
| Scenario | Rate assumed | Tenure | Monthly instalment |
|---|---|---|---|
| Illustrative repayment | 3.0% | 30 years | ≈ S$8,427 |
| Illustrative repayment | 3.0% | 25 years | ≈ S$9,478 |
| TDSR stress test | 4.0% | 30 years | ≈ S$9,542 |
At the stress-test figure of about S$9,542, a borrower with no other debts would need gross monthly income of around S$17,350 to stay within 55%. Over 30 years at a constant 3%, total interest would be roughly S$1.03 million, which shows why rate and tenure choices matter. For a smaller illustrative 2-bedroom at S$1,695,000, the 75% loan of S$1,271,250 works out to about S$5,360 a month at 3% over 30 years, and the 4% stress test needs roughly S$11,035 of monthly income. Try your own inputs in the loan calculator.
Step 4: Progressive disbursement and interest during construction
For an uncompleted property, the bank does not release the whole loan on day one. It pays the developer stage by stage as the architect certifies each milestone, and you pay interest only on what has been drawn. The full schedule is in our progressive payment guide; here is how it translates into instalments for the 3-bedroom example.
| After this stage | Loan drawn | Approx. monthly instalment* |
|---|---|---|
| Foundation | S$133,250 | ≈ S$562 |
| Reinforced concrete framework | S$399,750 | ≈ S$1,685 |
| Car park, roads and drains | S$932,750 | ≈ S$3,933 |
| TOP | S$1,599,000 | ≈ S$6,741 |
| CSC (fully drawn) | S$1,998,750 | ≈ S$8,427 |
*Illustrative only: assumes 3% a year, amortised over 30 years on the amount drawn. Banks recalculate instalments at each drawdown, and the remaining tenure shortens over time.
The practical effect is a gentle start followed by two big steps at TOP and CSC, expected for LinkTown Residences around 2030 to 2031. If you are also paying rent or a mortgage on your current home during construction, plan for the months where both overlap. CPF Ordinary Account savings can generally be used for these instalments; see our guide to using CPF for a private condo.
Step 5: Choose a package: SORA floating vs fixed
Singapore home loans are mainly offered in two forms:
- Floating, pegged to SORA: the rate is the Singapore Overnight Rate Average (usually a compounded one- or three-month SORA) plus a fixed spread. It moves with the market, up or down, and is transparent because SORA is published.
- Fixed: the rate is locked for a set period, typically two to three years, then reverts to a floating rate. You trade potential savings for certainty.
Some banks also offer packages specifically for uncompleted properties, which may differ from completed-property packages. When comparing, look beyond the headline rate at the spread in later years, the lock-in period, the penalty for early redemption, whether you can convert between packages, and any legal or valuation subsidy that could be clawed back.
Lock-in periods
Most packages carry a lock-in, often two to three years. Repaying or refinancing during the lock-in usually triggers a penalty, typically a percentage of the amount redeemed. For a new launch, think about when the lock-in ends relative to TOP, since that is when your loan becomes much larger.
Step 6: Refinance or reprice after the lock-in
Once the lock-in ends, many owners review their loan. Repricing means switching to another package with the same bank, often with less paperwork. Refinancing means moving the loan to a different bank, which may offer a better rate but involves legal work and a fresh credit and TDSR assessment. Owner-occupiers may be allowed to refinance even above the TDSR threshold, subject to MAS conditions, so ask your bank how the current rules apply to you.
Set a reminder a few months before your lock-in ends, so you have time to compare offers without rushing.
Home loan checklist for new launch buyers in Singapore
- Clear or reduce other debts that eat into your TDSR.
- Get an IPA before the preview and note its validity period.
- Confirm your LTV tier and minimum cash requirement.
- Budget for stamp duty separately; see the stamp duty guide.
- Model instalments at a higher rate than today’s to test your comfort level.
- Compare floating and fixed packages on total cost and flexibility, not only the first-year rate.
- Plan for the step-ups at TOP and CSC.
Once your loan budget is clear, compare it against the indicative unit prices on our price page. To receive the official price list when it is released, register your interest.
Rules as at time of writing; verify with MAS guidelines, IRAS, CPF Board and your bank. Interest rates shown are illustrative assumptions, not quotes. Prices are estimates based on indicative sizes, not official prices. This is general information, not financial advice.
