A condominium bridging loan is a short-term, asset-backed financing that helps bridge the gap when buying or refinancing a condo property . It allows you to secure funds quickly to purchase a new condo (or to cash out on an existing one) while you arrange longer-term financing or wait for proceeds from selling another property. The condo itself (or another property you own) serves as collateral for the loan until you obtain permanent financing or complete the sale of your other asset.

Generally, these loans are available to property owners or buyers who can pledge a Singapore property (such as a condominium) as collateral. Lenders often require the borrower to be an accredited investor or a corporate entity , since bridging loans are not standard bank loans. Singapore Citizens, Permanent Residents, and even foreigners (if purchasing eligible private properties) can qualify, provided they meet the lender’s criteria. Unlike traditional loans, factors like personal income or TDSR (Total Debt Servicing Ratio) are less critical – the key is having sufficient equity in the property and a clear repayment plan (such as the impending sale of an existing property or securing of a mortgage).

It provides the necessary funds for the down payment or full payment of the new condo so you don’t miss the opportunity, even if your current home hasn’t been sold yet . Essentially, the bridging loan “bridges” the financial gap between the purchase of the new property and the sale proceeds of your old property. Once your old home is sold and you receive the funds (or once you secure a long-term home loan), you can then repay the bridging loan. This enables you to upgrade to a new condo without having to rush the sale of your existing home.

The loan amount typically ranges from about S$1 million up to as high as S$100 million, depending on the value of the collateral and the lender’s limits . In terms of leverage, lenders usually offer up to roughly 70–75% of the condo’s market value as the loan (this is known as the loan-to-value or LTV ratio) . For example, if your condominium is valued at S$2 million, you might secure around S$1.4 million in bridging finance, subject to the lender’s evaluation. The exact amount you can borrow will also depend on your exit strategy (e.g. pending sale price of an existing property) and the lender’s risk assessment.

Bridging loans are more expensive than traditional home mortgages due to their short-term, flexible nature and higher risk to lenders. Interest rates for bridging finance in Singapore typically range around 5% to 6% per annum (if borrowing from a bank) , and can be around 0.5% to 1% per month (approximately 6–12% p.a.) with private lenders. Some private bridge lenders offer interest-only payment options during the loan term , meaning you only pay the interest each month and repay the principal at the end. It’s important to also inquire about any processing fees, legal fees, or early repayment penalties – many bridging loans have minimal upfront fees and allow early repayment without hefty penalties, but terms can vary by lender.

One major benefit of bridging loans is speed. Approval can be obtained very quickly – often within 24 hours of submitting a complete application . Once approved, the funds can be disbursed in just a few days to a couple of weeks, allowing you to act on property purchases on short notice . This rapid timeline contrasts with conventional bank loans, which might take weeks or months to process. To expedite funding, it helps to have all necessary documentation ready (property option-to-purchase, proof of pending sale or ownership, etc.) so the lender can perform due diligence swiftly.

Bridging loans are intended as short-term solutions. The loan tenure is usually between 3 months to 12 months, though some lenders may offer terms up to 18 or even 24 months in special cases . For example, a bank-issued bridging loan often must be repaid within 6 months. Private bridging lenders might be more flexible, sometimes extending the term (e.g. to 12 months or longer) if the situation warrants. However, since interest costs can accumulate, borrowers usually repay the bridging loan as soon as their funds become available (such as immediately after selling the old property or securing a refinancing loan).

Yes. If you own a condominium and need to unlock equity from it quickly, a bridging loan can be taken against that property. Many bridging loan providers accept all types of private residential properties – including condos – as collateral . For instance, if you need funds to purchase another investment property or to bridge a short-term cash flow need, you could borrow against the value of a condo you already own. The lender will typically lodge a legal charge or caveat on your condo, and you can then use the loan proceeds for your needs (e.g. as downpayment on the new purchase). This is effectively a way to refinance or cash-out quickly, and then later you might refinance with a normal mortgage or sell an asset to clear the bridging loan.

It strengthens your case but is not always strictly required by private lenders. Banks in Singapore that offer bridging loans usually require you to have a clear intent to sell your existing property – often evidenced by an Option to Purchase (OTP) or Sales & Purchase agreement for the old home – because they want assurance of repayment. However, private bridging finance companies focus mainly on collateral value and exit plan . Even if you haven’t yet secured a buyer for your current property, you may still obtain a bridging loan as long as you have sufficient equity and a viable strategy (for example, your current home is on the market or you plan to refinance with a bank loan). The lender will evaluate the likelihood of your exit plan. It’s always best to communicate your timeline for selling or refinancing, and any documentation of efforts to sell will help.

Bridging loans are typically repaid in a lump sum by the end of the term. The repayment usually comes from the proceeds of selling your existing property or from refinancing into a standard mortgage on the new condo. For example, if you took a bridge loan to buy a condo and then you sell your old house a few months later, you would use the sale proceeds to pay off the bridge loan (plus any accrued interest). Alternatively, if you haven’t sold any property, you might arrange a long-term home loan on the new condo – once that mortgage is approved and disbursed, those funds can pay off the bridging loan. Many bridging loans allow or expect full settlement as soon as your funds come through, without penalties for early repayment. It’s important to have a clear exit strategy from the start , because if you’re unable to repay on time, you may need to seek an extension (incurring additional costs) or, in worst-case scenarios, the lender could foreclose on the property used as collateral.