Home Equity Loan Calculation in Singapore: Worked Example
A property’s market value is not the amount an owner can automatically cash out. Banks consider valuation, the outstanding mortgage, relevant CPF amounts, applicable loan-to-value limits, affordability, age, tenure, credit profile and internal lending criteria.
Illustrative calculation
- Bank valuation: S$1,800,000
- Illustrative financing basis: 75% of valuation
- Existing mortgage: S$500,000
- Illustrative relevant CPF principal and accrued interest: S$300,000
S$1,800,000 × 75% − S$500,000 − S$300,000 = S$550,000.
The illustration produces S$550,000 before affordability checks, fees and final assessment. It is not a guaranteed amount. A bank may use a different valuation or applicable limit, make other deductions, require the mortgage to be refinanced together, or approve less.
Information to prepare
- Estimated property value and property type
- Existing mortgage statement
- CPF property-usage information where relevant
- Income documents and tax assessments
- Other monthly debt obligations
- Preferred amount, purpose and tenure
Affordability still matters
Substantial equity does not guarantee approval. MAS TDSR rules and the bank’s assessment can limit the amount. Stress-test repayments against higher interest rates and income changes.
HDB-flat restriction
HDB flats are generally not eligible to be pledged for a cash-out equity term loan. This financing is generally considered for eligible private residential property, subject to bank criteria.
Costs and risks
Compare the rate structure, lock-in, legal and valuation costs, repayment charges, cancellation fees and later-year pricing. The property secures the loan, so missed repayments can have serious consequences, including enforcement action.
Frequently asked questions
Can a fully paid property qualify?
Potentially, yes. The bank still assesses valuation, income, debts, age, credit profile and tenure.
Does a higher valuation guarantee a larger loan?
No. Affordability, debts, CPF considerations, credit history and bank criteria still apply.
Read our cash-out equity term-loan guide and request a free assessment.
Sources and review: MAS TDSR rules and CPF refund rules. Reviewed by the Loan$upermart Mortgage Advisory Team on 8 September 2026.
General information only. Approval, valuation, rates and terms remain subject to individual assessment.
