Turning property equity into usable funds

If you own private property or an Executive Condominium (EC) that's passed its 5-year Minimum Occupation Period, the equity you've built up can potentially be turned into cash — without selling. This is usually done through cash-out refinancing, sometimes called an equity term loan.

How it works

Your home equity is the gap between your property's current market value and what you still owe on your mortgage. Say your property is valued at $1.2 million and your outstanding loan is $500,000 — you have $700,000 in equity on paper. Cash-out refinancing replaces your existing mortgage with a new, larger loan secured against the same property, and you receive the difference in cash, subject to lending limits.

How much you can access

Singapore's loan-to-value (LTV) limits typically allow borrowing of 60% to 80% of your property's current valuation. If this is your only outstanding property loan, you'll usually be eligible for the higher end of that range; a second or subsequent property loan is generally capped lower.

A few things determine eligibility: the property type (HDB flats generally don't qualify for cash-out refinancing — this route is for private property and eligible ECs), whether your existing loan was serviced in cash or partly with CPF funds (CPF-funded amounts are typically excluded from what you can borrow against), and your Total Debt Servicing Ratio (TDSR), which caps total monthly debt repayments at 55% of gross monthly income under MAS guidelines.

What it costs

Because the new loan is secured against your property, mortgage-style rates apply rather than personal loan rates — generally the more competitive end of the lending market. That said, refinancing isn't free: valuation fees and legal costs apply and will reduce the net cash you walk away with, so it's worth getting a clear breakdown before committing.

Fundwise helps you work out whether cash-out refinancing, a second mortgage, or another form of asset-based financing fits your situation — and connects you with the banks that offer it.

See how Fundwise can help with property financing, or get in touch to talk through your options.