Equity Loan
Unlock your asset’s value
A home equity loan (a.k.a. second mortgage) lets you borrow against your private property’s value — even while you’re still repaying your current mortgage. This includes cash-out refinancing, mortgage equity withdrawal, and property equity loans. You retain ownership while using your home as collateral.
Key Benefits
Home Equity Loan: A Smart Way to Unlock Property Value
How Much Can You Borrow with a Home Equity Loan?
Home equity loans follow standard mortgage regulations. You must maintain a minimum Loan-to-Value (LTV) ratio of 25%, meaning you can borrow up to 75% of your property’s market value, assuming it’s fully paid off.
Keep in mind:
- You cannot cash out the CPF portion used for your property’s down payment or mortgage.
- The Total Debt Servicing Ratio (TDSR) applies, limiting your total monthly loan repayments to 55% of your monthly income.
- TDSR is waived if you’re borrowing 50% or less of your property’s value.
- The final loan amount will also depend on your credit history and financial profile.
To get an estimate of how much you can borrow, try using our affordability calculator.
Eligibility
Pros vs Cons of Home Equity Loan
If you choose to refinance from an HDB concessionary loan to a bank loan, the decision is irreversible—you will no longer be able to switch back to an HDB loan in the future.
In the current high-interest environment, HDB loans remain attractive, offering a stable concessionary rate of 2.6% (CPF Ordinary Account rate + 0.1%). In contrast, bank loan rates are currently upwards of 3.7%.
However, in a low interest rate environment—such as between 2009 and 2019—bank loan rates were often lower than the HDB concessionary rate, making them a more cost-effective option during that period.
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