A bungalow bridging loan is a short-term loan secured by a landed residential property (like a bungalow or detached house) to “bridge” a temporary funding gap. It serves the same purpose as any bridging loan – providing interim financing so you can purchase a new property or meet an urgent need while awaiting more permanent funds. In the context of landed homes, it often helps buyers quickly secure a desirable bungalow before their old property is sold, or it allows owners to access equity from an existing landed property on a short timeline. The bungalow or other property is used as collateral, and the loan is typically repaid once longer-term financing is obtained or another property is sold.

Bridging loans for bungalows are generally available to Singapore citizens or PRs who are purchasing or owning landed property, since ownership of landed homes in Singapore (outside of select areas like Sentosa Cove) is generally restricted to locals . Applicants must have a suitable property to pledge as collateral – this could be the bungalow you are buying or another property you own with sufficient value. Lenders also typically require that borrowers are Accredited Investors or qualifying entities , given the large loan sizes and regulatory framework. Unlike a traditional bank loan, there’s usually no strict income requirement or TDSR assessment for private bridging finance ; the main criteria are the value and marketability of the property and a credible exit plan for repayment.

It enables you to act quickly on purchasing the new landed property without waiting to sell your current home. In Singapore’s market, attractive bungalows can be rare and sought-after; a bridge loan gives you the liquidity to pay for the new house (downpayment or even full payment) immediately . You can then take your time to sell your existing property (perhaps at a better price without pressure). Once you sell your old property, the proceeds can be used to pay off the bridging loan. Essentially, the bridge financing lets you hold two properties temporarily – the new bungalow and the old home – by leveraging the equity in one or both. This prevents you from missing out on the new purchase due to timing issues.

Bridge loan lenders typically allow a high loan-to-value ratio on landed homes, often up to around 70% of the property value (and in some cases even 75–80% for very prime properties) . The loan amount can range broadly, from about S$1M for smaller needs to tens of millions for high-end properties . The collateral is usually the bungalow itself that you’re buying or already own. Lenders may also accept other properties as additional collateral – for instance, if you own multiple properties, pledging an additional condo or another landed house could potentially allow you to borrow more or get better terms. The maximum loan will be determined by the appraised value of the property(ies) and the lender’s comfort level with your exit strategy.

Interest rates for bridging loans on landed residential properties are comparable to other bridging loans – generally higher than normal home loan rates, since they are short term. For reference, bank bridging loans may charge around 5-6% per annum . Private funding from bridge lenders often comes at roughly 0.6% to 1% per month (about 7-12% per annum) depending on the deal’s risk and duration. The specific rate can vary based on factors like the property type and value, loan-to-value, and how strong your overall profile is. Often these loans are interest-only during the term , meaning you might only pay monthly interest and settle the full principal at the end. Always clarify the interest structure and any fees (e.g., an administration or legal fee) upfront. Despite the higher cost, remember the bridging loan is a temporary tool to secure the property; you would refinance or pay it off as soon as possible to minimize interest paid.

Speed is a hallmark of bridging finance. You can often get an in-principle approval within 24 hours to a few days , since lenders mainly evaluate the property and exit strategy rather than thoroughly underwriting your personal financials. After approval, disbursement of funds can be very quick – in many cases within 1 week or so . This fast turnaround is crucial if you need to exercise an Option to Purchase on a new bungalow or complete a sale by a deadline. By comparison, a typical bank housing loan could take several weeks to process and approve, which might be too slow for a time-sensitive purchase. With a prepared application (property details, valuation, etc.), bridging loan providers work to deploy capital as swiftly as possible so you can meet your payment obligations on the new property.

Bridging loans for property purchases, including bungalows, are short-term facilities. The tenure is commonly around 6 to 12 months. Some lenders offer initial terms like 3, 6, or 9 months with options to extend if needed. In specialized cases (for example, if you need more time for a complex transaction), the term could extend up to 18 or 24 months , but longer terms may incur higher costs. The idea is that the loan will be paid off as soon as your permanent financing is arranged or your other asset is sold – so you borrow only for as long as necessary. If the sale of your old property or the refinancing takes place earlier than expected, you can typically repay the bridge loan early without hefty penalties, thereby saving on interest.

Yes, a bridging loan can be used for major renovations or even reconstruction, provided you have a plan to refinance or sell afterward. For instance, if you own an old bungalow and need funds to rebuild or extensively renovate it, a bridging lender might extend a loan against the current land/property value to finance the works. Once the renovation or rebuild is completed (thus potentially significantly increasing the property’s value), you could then refinance with a conventional loan or sell the property to pay off the bridging loan. This strategy is sometimes used by investors or owners who see an opportunity to add value to a landed property. Keep in mind that during the renovation period, interest will accrue, and the lender will want to monitor that the property’s value remains sufficient. Not all lenders finance construction risk readily, but many are open to bridging loans for renovation if there’s ample equity and a clear exit (for example, a bank loan upon project completion or a buyer lined up).

If you’re unable to repay the bridging loan when due, the first step is to communicate with the lender. In many cases, if the situation is reasonable, lenders can offer an extension to give you more time – but this often comes with additional costs (extension fees or higher interest for the extended period). For example, if your old house is still on the market, the lender might extend the loan by a few months to allow the sale to conclude, rather than foreclose immediately. However, extensions are at the lender’s discretion and typically short. Ultimately, if no solution is reached, the lender has the right to enforce the security. That means they could take legal action to sell the property used as collateral (the bungalow or the other property you pledged) to recover the loan amount. This is usually a last resort. To avoid such scenarios, it’s vital to have a solid exit plan and even a contingency plan. Some borrowers, for instance, arrange a backup refinancing facility or line up an interim buyer/investor for the property just in case. Always discuss with your lender as early as possible if you foresee delays; they prefer a workout solution rather than having to seize collateral, but they will act to protect their capital if necessary.