One of the key consideration for commercial property loan is the “thereafter” interest rate after the lock-in period ends. This is often overlooked by many commercial property and industrial property owners who like to zoom in on the lowest rate in the initial years.
Unlike residential property loans, thereafter rates for commercial property loans can skyrocket to ridiculous BOARD or PRIME lending rates of over 4-6% if one is not careful.
So, speak to our team of mortgage consultants who has specialised knowledge on what else to look out for in commercial property financing. We also provide comparison of latest rates across all lenders financing commercial & industrial properties bought under personal name and those bought under company name. For industrial properties, not all banks will be able to lend when buying under personal name. There is generally also a difference in interest rates for operating companies with a core business, and those setup solely for the purchase and holding of the commercial property, commonly referred to as investment-holding companies (IHCs).
On our website, we only feature the interest rates for commercial properties under personal name. If you are buying or refinancing commercial property under company name, speak to us first and we will provide you with the latest rates after we find out more information about your manner of holding, business nature, etc. OD (overdraft) facilities may also be provided for operating companies secured against the commercial/industrial property.
1. What are some things I need to know about financing under personal name?
As this is buying under personal name, it would come under the TDSR (total debt servicing ratio) framework where the amount of loan to be extended is dependant on your capacity to borrow in Singapore. For those with high income, this is usually not an issue.
The interest rates are generally lower than those under financing under company names but this also depends on the general interest rate environment.
2. What are some things I need to know about financing under company name?
Two years of financial statements are required before the bank will lend out to a company. One of the director of the company would also have to provide a personal guarantee on the loan.
One major benefit of financing via a company must be the fact that it allows you to borrow beyond your personal loan capacity as TDSR is not taken into consideration for operating companies with core businesses. Unless of course you apply for another mortgage from the same bank which finances your commercial property under company name, as the bank would need to factor your director guarantee on the loan in its loan calculation.
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