Commercial Property Loan Singapore: Rates and LTV

I'm Chandra, and I work as a commercial property agent in Singapore. Most buyers ask me the same two things first. How much will the bank lend? And what will it cost? Let me explain how a commercial property loan that Singapore banks offer really works.

Here's the short answer. Banks usually lend 70% to 80% of the price. Floating rates sit around 1.8% to 2.4% right now. But you can't use CPF, and that changes your cash plan. I'll walk you through each part with real numbers.

What Is a Commercial Property Loan in Singapore?

A commercial property loan helps you buy an office, shop, shophouse or factory unit. You repay it over many years, often up to 25 or 30. The property stays as the bank's security. Some people call it a business property loan. Others say commercial mortgage.

A home loan follows tight MAS caps. Those caps don't apply here. So each bank sets its own limits. That's why two banks can give you very different offers.

Commercial Property Loan Singapore: Interest Rates Right Now

Rates move often. So treat this as a guide, not a quote.

SORA is the base rate most banks use. It's around 1.2% to 1.3% today. Back in mid-2024, it was near 3.7%. The bank adds its own margin on top. That total is your all-in rate.

These are rough ranges for good cases. Your own rate depends on the bank, loan size, income and property. Small loans and weaker profiles often get quoted higher.

You may still see 4% to 5% on some pages. That data is old. Rates have fallen a lot since 2024. So check the date on any page you read, including this one.

Commercial property loan rates Singapore banks quote run a little higher than home loan rates. Banks see more risk here.

Commercial property loan interest rate Singapore: fixed or floating?

Fixed means the rate stays put for a set time, often two years. A floating rate moves with SORA. It often starts cheaper. But your payment can rise.

Can your business handle a payment that jumps next year? If not, lean fixed. Otherwise, floating may save you money.

Most packages also come with a lock-in of 2 to 3 years. Leave early, and you may pay a penalty of about 1.5% to 2% of the loan.

LTV: How Much Can You Borrow?

LTV means loan-to-value. It's the share of the price the bank will lend. The bank uses the lower of the price or its own valuation.

Banks decide the number, not MAS. Here are the common ranges:

These are only common ranges. Your bank has the final say.

Here's what trips people up. The bank may value the unit below your price. Then you pay the gap in cash. I've seen buyers pick a unit first, then learn the bank values it lower. So check the loan before you sign anything.

No CPF: What That Does to Your Cash

This one catches buyers off guard. You can't use CPF for commercial property. Not for the down payment, and not for the monthly loan either. Every dollar comes from cash.

Example: a S$2 million shop unit

• Loan at 70% LTV: S$1,400,000
• Downpayment at 30%, in cash: S$600,000
• Buyer's stamp duty: S$69,600
• GST at 9%, if the seller is GST-registered: S$180,000

So the cash you need is about S$670,000. If the seller charges GST, add S$180,000 on top. Banks usually don't lend for the GST part. A GST-registered company may claim it back later. And that's before legal and valuation fees.

Estimate your monthly payment

You don't need fancy tools. A commercial property loan calculator Singapore sites offer works fine. But here's the math on a S$1.4 million loan over 25 years:

• At 2.2% a year: about S$6,070 a month
• At 3.0% a year: about S$6,640 a month
• At 4.5% a year: about S$7,780 a month

Notice the gap. A jump from 2.2% to 4.5% adds about S$1,700 a month.

TDSR: The Rule That Can Cap Your Loan

If you borrow in your own name, TDSR applies. It stands for total debt servicing ratio. Your monthly debts can't go past 55% of your gross monthly income. That includes your home loan and car loan.

Here's the catch. For commercial property, the bank tests your loan at 4.5%. Not today's 2%.

Take the S$1.4 million loan above. The tested payment at 4.5% is about S$7,780. To meet the 55% limit, you'd need roughly S$14,150 of monthly income. And that's before any other debt.

Companies work differently. Banks usually check cash flow and rent instead.

Personal Name or Company?

Many buyers ask me this. The answer depends on your tax and business plan. So talk to your accountant too. Here's how the two compare on the loan side:

• TDSR: It applies in your personal name. For a company, banks usually check cash flow instead.
• CPF: Not allowed either way.
• ABSD: Not charged on commercial property, in either case.
• GST: An individual usually can't claim it back. A GST-registered company may.
• LTV: About 70% to 80% for an individual owner-occupier. About 60% to 70% for a company.

What Banks Check Before They Say Yes

Banks look at the buyer, the unit and the numbers. Here's what they usually check:

• Your income or cash flow. Salaried buyers show payslips and tax notices. Company buyers show financial statements.
• Rent from the unit. If you plan to lease it, the bank wants rent to help cover the loan.
• Property type and lease left. A short lease can cut your loan term.
• The valuation. This sets how much you can borrow.
• Your debts and credit record. Existing loans count against you.
• Your directors. Some banks prefer Singaporean or PR directors for company loans.

Where the Property Sits Matters

Location and property type change how the bank sees your loan. DBS, OCBC, UOB, Standard Chartered and Hong Leong all lend here. But each has its own appetite.

• Raffles Place and Shenton Way offices. Banks have many past sales to compare. That helps the valuation.
• Tanjong Pagar, Chinatown and Kampong Glam shophouses. Some have homes upstairs. The home part may follow different rules, so tell the bank early.
• Ubi, Kaki Bukit and Jurong industrial units. The lease left, and JTC conditions can shorten your loan term. Strata industrial also costs more to borrow.

How to Get a Commercial Property Loan, Step by Step

When a client calls me about a loan, I ask about cash first. Rates come later. Here's the order I follow:

1. Count your cash. Add the down payment, stamp duty and any GST.
2. Ask two or three banks for a rough approval. Do this before you view units.
3. Pick the unit. I help here, and I check the lease and valuation risk. My guide on how to buy commercial property in Singapore shows the full buying steps.
4. Sign the option and pay stamp duty on time. Your lawyer sets the dates.
5. Let the bank value the property. Then you get the formal loan offer.
6. Sign the loan papers and complete. The bank pays out, and you get the keys.

Costs Beyond the Loan

The loan is only part of the bill. Here's what else you pay.

Buyer's stamp duty (BSD) for commercial property is charged in bands. It's 1% on the first S$180,000. Then 2% on the next S$180,000. After that, 3% on the next S$640,000. The next S$500,000 pays 4%. Anything above S$1.5 million pays 5%.

• ABSD: None. It only applies to homes.
• GST: 9%, if the seller is GST-registered.
• Property tax: 10% of the annual value each year for commercial property.
• Legal and valuation fees: Ask your lawyer and the bank for quotes.
• Early repayment penalty: About 1.5% to 2% if you leave during the lock-in.

7 Mistakes I See Buyers Make

1. Picking the unit before checking the loan. A great unit means little if the bank says no.
2. Forgetting GST in the cash plan. It can add a big sum fast.
3. Chasing the lowest rate. Check the lock-in, margin and penalty too.
4. Trusting old rate pages. Numbers like 4% to 5% are often out of date.
5. Skipping the 4.5% test. TDSR uses it, not today's rate.
6. Counting on CPF. It can't help with commercial property.
7. Ignoring the lease left. A short lease can shrink your loan.

Ready to Plan Your Commercial Property Loan?

A commercial property loan that Singapore banks approve comes down to three things. Your rate, your LTV and your cash. Get those right, and the rest gets easier.

I'm a property agent, not a bank, so final terms come from the lender. But I can help you plan before you apply. Thinking of buying? Message me on WhatsApp through my commercial property agent in Singapore page. I'll go through your numbers with you. As an expert real estate consultant in Singapore, I'll go through your numbers with you.

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