Surprising fact: in Singapore today’s typical borrowing cost for asset-backed deals sits near 2.8%–3.2% p.a., a narrow band that changes how you compare offers.
We’ll walk you through what that band means for your business and for any investment or owner-use purchase in the present market.
Banks often price financing as a transparent benchmark (commonly 3‑month SORA) plus a margin. Fixed packages have recently fallen close to, or below, floating levels because of an unusual cycle like an inverted yield curve.
Lock-in periods of 1–3 years matter: after they end, rates can jump to BOARD/PRIME levels above 5–6% if you don’t act.
We explain borrowing limits, typical tenures (20–30 years), lease-tail constraints, and a clear refinancing game plan so you avoid costly thereafter pricing. Ready to benchmark offers? Whatsapp us for a discovery session.
Key Takeaways
- Current guide band: around 2.8%–3.2% p.a., with transparent SORA + margin structures.
- Fixed deals may sometimes be cheaper than floating in the present cycle.
- Watch lock-in terms: thereafter pricing can rise sharply to board/prime levels.
- Loan tenure and remaining lease affect how much you can borrow and repayment planning.
- We provide a step-by-step refinancing plan to avoid expensive repricing.
- Contact us to benchmark offers and translate options into savings and certainty.
Understanding today’s market for commercial property financing in Singapore
With more than 50 lenders and institutions active in Singapore, the lending market is highly competitive. This creates options for buyers and owners, but also variance in offers.
Banks set their own credit rules for commercial and industrial financing, unlike residential where MAS guidance is stricter. That means your business profile and the asset mix matter a lot.
Why rates matter now: present conditions and bank competition
Small spread differences affect cash flow. Lenders adjust spreads and structures in response to SORA moves and competition for creditworthy businesses.
Comparing like‑for‑like terms is essential. Look beyond headline numbers to lock‑in duration, thereafter mechanics, fees, and covenant terms.
Whatsapp us for a discovery session to benchmark offers across 50+ lenders
We benchmark offers so you see true all‑in value across the market. If you want an apples‑to‑apples comparison fast, Whatsapp us for a discovery session and we’ll pull quotes tailored to your needs.
- How lenders view operating companies vs holding firms.
- Which assets attract tighter pricing (commercial industrial mix matters).
- Timing guidance: when to chase savings and when to protect stability.
| Factor | What to check | Why it matters | Action |
|---|---|---|---|
| Lender count | 50+ options | Wider spread of structures | Request multiple quotes |
| Credit policy | Bank-specific rules | Affects eligibility and terms | Match profile to bank appetite |
| Asset mix | Commercial vs industrial | Drives pricing and covenants | Disclose portfolio mix up front |
| All-in value | Headline + fees + thereafter | Shows true cost | Compare total cost over term |
Commercial property loan interest rates: what’s considered competitive at present
Knowing the practical benchmarks for borrowing today helps you choose the right package for your cash flow. Below we set out a clear guide and the main drivers that shape pricing.
Current guide: about 2.8%–3.2% p.a. for many packages
Typical range: many market offers sit near 2.8%–3.2% p.a. Floating structures usually use 3‑month SORA plus a margin.
Example: if 3‑month SORA = 2.5%, a Year‑1 structure of SORA + 1% implies roughly 3.5% p.a. Fixed packages have recently been offered around 3.2%, sometimes under floating levels.
What drives pricing: market benchmarks, bank spreads, and risk
Lenders price using a benchmark (SORA), then add a margin that reflects borrower risk and asset mix.
- Credit profile and tenancy influence the margin and final rate.
- Introductory packages can rise after lock‑in; compare lifecycle costs, not just the headline.
- A fixed package near 3.2% may suit you if volatility would hurt cash flow.
Quick checklist to speed pricing:
- 2 years of accounts and bank statements
- Tenancy schedule and lease lengths
- Business entity structure and turnover summary
Want a tailored snapshot of today’s best terms for your case? Whatsapp us and we’ll map options quickly.
How banks price your loan: SORA-based floating vs fixed rate packages
Banks build offers from clear building blocks — benchmark plus spread — and knowing them cuts uncertainty.
Floating rate anatomy
Most variable offers are quoted as 3‑month SORA + a margin. A common sequence is Year 1: SORA + 1% and Year 2: SORA + 2%.
This structure means your repayments move if SORA shifts. You can model scenarios by adding the margin to current SORA and testing modest benchmark swings.
When fixed can beat floating
In the current cycle some fixed packages have been offered near 3.2% p.a., which can rival or undercut floating options.
That unusual alignment gives certainty for the initial years and suits firms that prize predictable cash flow over potential upside from a falling benchmark.
Lock‑in periods and flexibility
Lock‑ins typically last 1–3 years. During the period you may face break fees or limits on refinancing.
Plan for the thereafter — many banks step the price up materially after lock‑in, so time refinancing or negotiation at least 3–4 months before expiry.
- We show how year‑1 vs year‑2 spreads affect the blended cost.
- Pros/cons of floating rate packages: saving potential vs benchmark exposure.
- Negotiate margin, lock‑in length, and fee waivers; some policy items are fixed.
If you want a line‑by‑line review of a term sheet, Whatsapp us and we’ll give an objective read on your options.
How much you can borrow on a business property loan
The amount you can borrow depends less on headline caps and more on your cash flow, the asset’s use, and the lender’s credit appetite.
Typical LTV bands
Own use: lenders commonly permit around 80%–90% LTV for owner‑occupied assets.
Investment: rental or third‑party leased assets usually attract lower LTVs — roughly 60%–70%.
Stretching beyond standard limits
Some lenders combine a mortgage (about 80% LTV) with an unsecured business term facility to reach 100%–120% of the purchase price. Use this cautiously: extra leverage raises vulnerability if cash flow tightens or rates move.
What banks look at
- Operating history and years in business.
- Annual revenue, profitability, and cash buffers.
- Tenancy schedule, lease lengths, and asset condition.
- Overall serviceability and sector risk.
Practical steps to strengthen your case: tidy management accounts, clear tenancy details, and a short use‑of‑proceeds note. These speed approvals and can improve the loan amount you secure.
Want tailored guidance and prudent financing plans? Whatsapp us for a discovery session and we’ll map options that fit your business and investment goals.
Loan tenure and repayment period: managing years, cash flow, and total interest
Your chosen repayment period shapes affordability and refinancing options down the line. Typical loan tenure options run 20–30 years. A longer tenure lowers monthly payments but raises lifetime costs.
Standard ranges and lease‑tail rules
Most lenders expect 5–10 years of lease remaining after the loan matures. That rule limits the maximum tenure you can take.
Leasehold impact on monthly installments
A shorter remaining lease usually forces a shorter tenure. That compression drives higher monthly installments and tighter cash flow.
Use a calculator to compare scenarios
Vary the loan amount, assumed interest, and tenure to see monthly payments and total costs. Model a few scenarios: shorter term, longer term, and partial prepayment.
- Tip: Align repayments with rental inflows or seasonal revenue where possible.
- Tip: Partial redemptions cut total interest without harming operations.
Want an amortization run tailored to your case? Whatsapp us and we’ll model side‑by‑side options so you can pick a sustainable path.
Fixed vs floating rate decisions for commercial and industrial property
Your choice should start with how much volatility your business can absorb over the next 24–36 months.
Fixed packages recently traded near 3.2% p.a. That can offer predictable payments and protection if benchmarks spike. Fixing suits firms that value cash flow certainty and have tight margin management.
Floating rate offers are quoted off 3‑month SORA plus a margin and can change yearly. This route may reward you if the benchmark falls, but it requires reserves and active treasury management.
When stability beats flexibility—and vice versa
If your tenants have short leases or revenue is seasonal, choose certainty. If your business has strong buffers and expects lower benchmarks, floating may reduce cost.
Matching package type to needs, cash flow, and risk tolerance
Ask these questions before signing:
- Do you prefer fixed monthly payments or potential savings from a falling benchmark?
- Can your management team monitor and act on annual repricing?
- Is tenant maturity and sector outlook stable for the next 2–3 years?
| Feature | Fixed | Floating |
|---|---|---|
| Payment predictability | High | Variable |
| Early cost if benchmark falls | Cannot benefit | Can reduce overall cost |
| Best for | Conservative cash flow management | Active treasury and higher buffers |
Negotiation points to discuss: lock‑in length, break clauses, and step‑up mechanics. You can also blend approaches—fix now, reassess later—to balance certainty and optionality.
Need a second opinion? Whatsapp us and we’ll sanity‑check your choice against market benchmarks and your immediate business needs.
The “thereafter” interest rate trap after lock‑in ends
Many owners only discover a sharp price jump when their initial lock‑in ends — and by then options are limited.
Why it happens: After 1–3 years many banks revert pricing to BOARD or PRIME‑pegged terms. That can push rates above 5%–6% and raise your monthly costs materially.
Why BOARD/PRIME pegged rates can jump to 5%–6%+
Benchmarks used during the introductory period often differ from thereafter mechanics. When the lock‑in ends, blind rollovers or default repricing can trigger a sudden higher rate and heavier interest expenses.
How to plan ahead: review windows, repricing timelines, and exit costs
Start reviews 3–4 months before expiry. Conveyancing for refinancing usually needs 2–3 months, so early action preserves options.
- Compare repricing vs refinancing: repricing often saves on legal fees; switching banks can deliver a lower market rate.
- Check exit fees, partial redemption charges, and conveyancing costs to compute break‑even timing.
- Prepare valuation, accounts, tenancy schedule, and statements early to speed underwriting.
Practical step: calendar key dates, request a retention offer, and get market quotes 3 months out. If you want monitoring and reminders, Whatsapp us and we’ll set alerts and negotiate on your behalf so you avoid unnecessary costs in the years ahead.
Qualifying and structuring: operating companies vs investment holding companies
How you hold an asset can change underwriting, from available credit lines to who gets assessed for debt servicing. Make this choice early to avoid surprises during the application process.
Operating company advantages and OD access
Operating companies typically qualify more easily because they show trading history, revenue, and cash flow. Lenders view this as stronger credit support.
OpCos can sometimes secure overdraft (OD) facilities against the same property, helping working capital without separate unsecured lines.
Investment holding firms, guarantees, and TDSR
Newly set holding vehicles often lack records, so a parent corporate guarantee helps. Where the borrower is a pure holding firm, banks may apply a debt servicing ratio and even assess total debt servicing against individual shareholders.
Property type nuances: industrial, niche, and rental-led assets
Some industrial property and mixed-use shophouses face tighter appetite. Rental strength, tenant quality, and lease length influence underwriting and proposed terms. Lower LTVs are common for rental-led deals.
| Structure | Ease of approval | Typical facilities | How to strengthen |
|---|---|---|---|
| Operating company | High | Mortgage + OD | Accounts, tenancy schedule |
| Investment holding company | Moderate–Low | Mortgage; guarantees | Parent guarantee; shareholder evidence |
| Niche/industrial | Varies | Mortgage only | Valuation, sector track record |
Prepare concise accounts, bank statements, and tenancy details to speed approval. If you’re unsure which structure fits your business, Whatsapp us for a discovery session and we’ll assess eligibility and documentation upfront.
Refinancing strategy: repricing, switching banks, and cutting interest costs
Start early: a clear refinancing plan prevents surprise uplifts when your introductory term ends. Begin reviews 3–4 months before the lock‑in expires so you control timing and outcomes.
Timing and priorities
We map a simple timeline to keep approvals and settlement inside the critical period. Repricing with your current bank often avoids conveyancing and lowers upfront fees, while switching usually needs 2–3 months for legal work.
Repricing vs refinancing: practical trade-offs
Compare net savings after all costs, not just the headline rate. We show how to total conveyancing, valuation, and admin fees so your decision is data driven.
- Prepare documents early to speed the application and cut back‑and‑forth.
- Align the new facility’s loan amount and tenure to free capital or lower monthly costs.
- Negotiate retention offers and benchmark them against best property loans in market.
- Follow our checklist for valuation timing, bank notices, and completion sequencing.
Need hands‑on help? Whatsapp us for a discovery session and we’ll coordinate offers, documentation, and settlement to capture savings cleanly.
Conclusion
Conclusion
To conclude, a thoughtful financing plan turns an asset into reliable capital without undue risk. Plan tenure and review windows several months before lock‑in expiry to avoid sharp thereafter rate jumps to BOARD/PRIME.
Owning the asset can boost liquidity; secured borrowing is often cheaper and mortgage interest is tax deductible. Note stamp duty caps and GST rules for non‑residential purchases so you budget fees correctly.
Match structure to industrial and rental realities, keep documentation ready, and compare all‑in costs—not just the headline rate. We provide clear credit and management support, documentation prep, and bank negotiation.
Ready to benchmark options? Whatsapp us for a discovery session and we’ll model scenarios, compare terms, and help lock in a tenure that suits your goals over the coming years.
FAQ
What are typical rates for business property financing right now?
Many packages sit around 2.8%–3.2% per annum today for well-qualified borrowers. Actual pricing depends on your borrower profile, loan size, and the bank’s spread over market benchmarks such as SORA or bank prime.
Why do these rates matter today and how do banks compete?
Rates determine your monthly outlay and total cost over the loan term. Banks compete by adjusting spreads, offering fee waivers, or structuring fixed vs floating options. Market liquidity, central bank moves, and lender appetite all shape the offers you see.
How does a SORA‑based floating package work?
A floating package typically uses 3‑month SORA plus a margin (for example +1% in Year 1). Your repayment moves with the benchmark. That gives flexibility when rates fall but exposes you to higher payments when benchmarks rise.
When might fixed rates be better than floating?
Fixed rates can suit borrowers who prioritise payment certainty—especially if you have tight cash flow or need budget stability. In some unusual cycles, short fixed terms can be priced competitively and even sit close to floating costs.
What are lock‑in periods and why do they matter?
Lock‑ins (commonly 1–3 years) are periods when you pay early‑exit fees if you refinance. They protect the lender’s margin but can trap you into a higher thereafter rate if you don’t plan repricing ahead of expiry.
How much can I borrow against a business asset?
Typical loan‑to‑value (LTV) is 80%–90% for owner‑occupied assets and 60%–70% for investment holdings. Some structures combine facilities to reach higher effective leverage, but higher borrowing increases risk and costs.
What factors do banks look at when deciding lending amount?
Lenders assess operating history, revenue, recurring cash flow, tenant profile (if leased), remaining lease term, and the asset’s valuation. Strong management accounts and firm tenancy improve access and pricing.
How long can I take to repay and how does tenure affect costs?
Tenures commonly run 20–30 years, with lenders often requiring a minimum lease tail of 5–10 years beyond loan maturity. Longer terms lower monthly payments but increase total interest paid; shorter terms save interest but raise monthly obligations.
Does remaining lease length change the loan term available?
Yes. Shorter remaining leases usually reduce the maximum tenure a bank will offer and can raise monthly repayments or require a higher down payment to mitigate risk.
How can I compare repayment scenarios quickly?
Use a mortgage or commercial repayment calculator to model different tenures, rates, and loan amounts. Compare total interest and monthly cash flow to find what aligns with your business plan.
How should I choose between fixed and floating for industrial or business assets?
Match the package to your cash flow stability and risk tolerance. If income is predictable and you prefer certainty, consider fixed. If you can tolerate short‑term movements and expect rates to fall, floating may cost less over time.
What is the “thereafter” rate risk after a lock‑in ends?
After lock‑in, many facilities revert to board or prime‑pegged rates which can jump (often into the mid‑5% range or higher) if market conditions change. That can significantly raise repayments if you’re unprepared.
How do I avoid a nasty surprise at repricing?
Start shopping and negotiating 3–4 months before lock‑in expiry. Review repricing windows, compare lender offers, and factor in refinance costs like legal and valuation fees so you can switch or renegotiate in time.
Are there differences when borrowing as an operating company versus a holding company?
Yes. Operating companies often access overdraft or working capital facilities and can show operating cash flow to support debt. Holding entities may need shareholder guarantees, and banks will assess total debt servicing of owners when considering eligibility.
How does asset type (industrial, retail, niche) affect lending?
Lenders price risk by asset class. Industrial and essential‑use assets usually attract better terms than specialised or niche assets with limited tenant pools. Location, lease length, and tenant credit matter more than the label alone.
When should I consider refinancing or switching banks?
Consider refinancing if you can materially lower your ongoing cost, if your lock‑in is ending, or if a competing lender offers better terms after fees. Start the process early to avoid crossing into a higher thereafter rate.
What costs should I include when calculating refinance savings?
Include legal and conveyancing fees, valuation and administrative charges, early‑exit penalties, and any upfront lender incentives or waiver values. Net the one‑off costs against projected interest savings to decide.
How can we help benchmark offers across lenders?
We can run a discovery session to compare offers from 50+ banks and specialist lenders, highlight hidden fees, and present an apples‑to‑apples cost comparison so you can make an informed choice.
