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Buying Commercial Property In Singapore
Financing of commercial property in Singapore is primarily offered by only a handful of lenders, unlike residential properties. The interest rates are generally of much higher spreads especially after the lock-in period which makes “thereafter” rate a more important consideration.
We provide both comparison of packages for those financing under personal name and those under private limited companies. For the latter, there is generally a differentiation between financing for own-use property where there is a core operating business, and those which are setup solely for holding of the commercial property, commonly referred to as investment-holding companies (IHCs).
We only showcase the rates for financing under personal names. You do need to contact us and speak to our consultants for those seeking purchase or refinancing under company names.
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FAQs
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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