Bridging Loan Interest Rates: Guide to Finding the Best Loan

bridging loan interest rates

Singapore’s real estate market has remained resilient and continues to grow despite today’s economic challenges. The bridge loans from various lenders play a part in this growth by empowering property buyers, developers, and investors.

Many lenders provide bridge loans with competitive rates and continue to push these loans despite the high risks involved. Bridge loan current interest rates range between 5 to 6% and may even be as high as 11%, depending on the bank. You may also avail of bridge loans from licensed moneylenders with a rate of 1 to 4% per month.

Bridging loans are often complex and misunderstood, and some borrowers perceive bridge loans as expensive and risky. But proper use and understanding of how it works can make it the right tool for a property upgrade. Find out how much you can borrow, the best bridging loan packages, and everything in between through this guide.

What is a Bridging Loan?

A bridging loan is a type of short-term financing widely used in the real estate industry. As the name implies, it bridges the gap until funds become available to the borrower. It is useful in transitions between buying a new property and selling an old one, such as when waiting for the sales proceeds from an existing property.

Bridge loans taken from a bank are backed against an asset, usually the borrower’s private property. Typically, a bridge loan lasts for a short period of six months to one year. However, many licensed moneylenders also offer bridge loans with no collateral and can be repaid within one month or until the property’s completion date. 

How Does a Bridge Loan Work?

Bridge loans are designed for short-term financing wherein a borrower must have a valid exit. This exit refers to how a borrower will be able to pay the bridge loan. With banks, these funds are released quickly after property valuation and after being assessed based on credit reports from the Credit Bureau Singapore. 

Bridge loans from licensed moneylenders do not require a credit score, tedious documentation, or collateral.

Here is a typical example of how it works:

Let’s say you are interested in buying a new property worth S$1.2M. In Singapore, you must pay at least a 25% cash downpayment for your second property’s purchase price. 

Price of new property


25% cash downpayment


Loanable Amount (75% LTV)


With a bridge loan, you will be able to get a loan that will cover the required S$300,000 downpayment of your next property purchase. It can also cover other costs involved in the property transaction, such as additional buyer stamp duties, which depend on your profile. 

Bridge Loan Features At a Glance

Below is a comparison of the primary features of bridging loans from banks and licensed moneylenders. 



Licensed Moneylenders

Loan Amount

Up to 75% LTV

Up to six times of your monthly income

Interest Rate

Up to 11%, depending on bank

1 to 4% per month

Loan Tenure

6 months to 2 years

One month or until the property’s completion date


With collateral

No collateral

Types of Bridging Loans

There are two types of bridging loans that you can avail in Singapore. These are the capitalised interest bridging loan and the simultaneous repayment bridging loan. 

1. Capitalised Interest Bridging Loans 

For this type, the bank will shoulder the entire cost of the property purchase. Monthly repayments will be activated once the old property has been sold.

2. Simultaneous Repayment Bridging Loans

As the name implies, borrowers will make simultaneous repayments on two loans, that is the home loan and the bridging loan. 

This type is only available from banks and not from licensed moneylenders.  

Top 5 Bridging Loans in Singapore

Bridging loans in Singapore are designed to ease one’s home-buying journey. Still, you should be careful and take out a bridge loan only from a trusted and reputable lender. Make sure to check out the best interest rate offers that suit your current circumstances. 

Here are the top 5 bridging loans from trusted banks and lenders: 

Bridge Loan

Type of Property



DBS Bridging Loan

All property types

Prime Rate

4.25% p.a.

Up to 6 months

Standard Chartered’s HDB Bridging Loan


3 months SIBOR plus 2% annual interest

Up to 6 months

UOB’s HDB Home Loan


4% to 5% per month

Up to 6 months

Maybank HDB Home Loan


1.33% to 1.60% per month

1 to 4 years

A1 Credit Bridging Loan (Licensed moneylender, an alternative solution)

All property types

1% to 4% monthly

One month or until the property’s completion date

From the above options, Maybank’s HDB Home Loan is an excellent option in terms of interest rate and loan tenure. This loan is best for borrowers who have good credit scores and are looking for an extended loan repayment term. 

While many banks offer bridging loans that are a great deal, they are stricter regarding credit checking and documentation. Licensed moneylenders are the next best alternative in terms of flexibility.

Other Alternative Options

Getting a considerable property loan is a crucial decision for everyone. As such, you must make careful comparisons of other options to find the most suitable product for your needs. Here are other bridging finance alternatives:


This type could be a cheaper alternative to bridge loans as it allows you to borrow funds on an ongoing basis. HELOCs are secured loans that allow you to tap into your home’s equity and draw funds as needed, like how a credit card works. 

Interest rates are variable and will be based on the borrowed amount. During the draw period, you can choose to pay the interest only or pay off a part of the principal to make room for available credit.

2. Home Equity Loan

Like bridge loans and other home loans, home equity loans can also help cover a second mortgage. Home equity loans also have lower interest rates and lesser fees. One advantage of home equity loans over other tools is the extended repayment period which usually starts at five years and may go as long as twenty years. 

3. Personal Loan

Personal loans are both available from major banks and licensed moneylenders. You can easily avail of a personal loan of up to ten times your monthly salary from banks if you have a good credit score. 

Otherwise, you should try getting one from a licensed moneylender. They offer up to 6 times of your monthly salary and your personal loan application is immediately processed within the day.  Read more on the differences between personal loan and bridging loan.  

loan agency

Tips When Taking a Bridging Loan

Bridging loans play a key role in securing property deals swiftly. Still, several things should be considered before upfront consideration. Here are some helpful tips to remember:

  1. If you are going to take a bridging loan from a bank, make sure that your property valuation is spot-on. This is crucial as it places a cap on the amount you can borrow.
  2. Get a full breakdown of the bridging loan cost before signing into the deal. This includes other fees such as:
    • Valuation fees
    • Legal fees
    • Exit fees
    • Admin fees  
    • Make sure to repay the loan within the approved terms to avoid paying penalties, spiraling into debt, or even losing your property.

Bridge Loan FAQs 

1. How Much Can I Borrow From A Bridging Loan?

If you intend to borrow from a bank, you may get up to 75% of your property’s loan-to-value (LTV) ratio. Licensed moneylenders, on the other hand, offer a loan amount of up to six times your monthly income. 

2. What is The Interest Rate on Bridging Loans?

Bridging loans from banks typically ranges from 5 to 6% for banks and 1 to 4% per month for licensed moneylenders.

3. How Long Can a Bridging Loan Be?

Bridging loans that are taken from banks are short-termed and typically last from six to two years. Licensed moneylenders offer bridging loans with flexible tenure of one month or until the property’s completion date.

4. How Do You Qualify For a Bridging Loan?

Singapore citizens, permanent residents, and foreigners who are in the process of selling their old property may qualify for a bridge loan. However, there could be many other requirements to fulfill, depending on the lender.

For Banks: 

  • Must be at least 21 years old
  • Must have proof of the sale of existing property

For Licensed Moneylenders:

  • Must be at least 21 years old
  • Must exercise the Option to Purchase (OTP)

Other requirements (depending on the lender):

  • Proof of Address
  • Proof of Income
  • Option to Purchase (OTP)
  • SingPass


The rush to getting the best property deals finds many homebuyers looking at bridging loan options. Essentially, bridging loans are flexible and provide a fast and straightforward solution to transactions where time is of the essence.    

Key Takeaways

  • Bridging loans are easy to arrange and are an ideal solution for quick funding.
  • Due diligence should always be carried out to avoid delinquency and losing a property that is put up as collateral. 
  • Licensed moneylenders are another ideal alternative as you could obtain a large amount of money without the risk of losing your property.

Whatever your financial needs are today, you can always count on A1 Credit for quick cash solutions. We are a trusted and reliable licensed moneylender that offers the best loan packages at competitive rates around Singapore. Check out your options today and get a free loan quote – commitment-free!

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