Bridging Loan for EC Purchase

Bridging Loan Can Be Granted With A Home Loan

Purpose of Bridging Loan

Bridging loans for EC purchase are designed to help EC buyers complete the purchase of a New Launch EC before selling their existing HDB.

The bridging loan amount is the difference between the purchase price or valuation of the new EC, whichever is lower, and the applied home loan amount. To be eligible, the EC buyers have to opt for the Deferred Payment Scheme.

Bridging loan is short term. It is a temporary loan to help EC buyers to tide over their short term financial needs while they awaits the realization of the proceeds of sales of their existing HDB.

Following is a simple illustration for your easy reference:

Existing Property (HDB)
Current Market Value (based on bank’s indication)$500k
Recognised Current Market Value (80%)$400k
Less: Outstanding Loan$150k
Eligible Cash ($100k) & CPF ($150k) Proceeds
(The proceeds from the sale of existing property should be ≥ the total Bridging Loan required)
New Property (EC)
Purchase Price$800k
Eligible Bank Loan (Assuming the EC buyers able to obtain 60% loan-to-value)$480k
5% Cash Payment (Option Fee)$40k
15% Cash or CPF (Downpayment within 9 weeks)$120k
20% Bridging Loan (to be disbursed during TOP)$160k
45% Home Loan (to be disbursed during TOP)$360k
15% Home Loan (to be disbursed upon CSC)$120k

Bridging Loan Tenure & Disbursement

Bridging loan tenure is up to 6 months from the date of the first disbursement. Evidence of sale of existing property with HDB approval letter is required before Bridging Loan is disbursed.

Bridging Loan Interest & Repayment

Bridging loans are used for borrowing over short periods. Typically, they have a higher interest rate. However, the interest will be considered affordable and worthwhile, because it is over a short periods.

a) Repayment period of up to 6 months
b) Service interest only during the repayment tenor
c) Repay the principal only when you receive sales proceeds from your existing property
d) Competitive interest rates

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