Surprising fact: over 50 banks and financial institutions compete in this market, with typical interest ranges near 2.8%–3.2% p.a., so a small pricing move can change your cash flow fast.
We’ll walk you through today’s landscape so you can pick a package that matches your goals and cash flow.
What we cover: how benchmarks like 3‑month SORA pair with a bank spread, typical LTVs, tenures, and common fees for a commercial property loan or property loan for owner‑occupiers and investors.
We also explain when fixed terms beat floating ones, how to time decisions with the market, and practical steps from application to valuation.
Quick note: DBS currently offers up to 80% of property value, flexible tenures up to 25 years, and a time‑limited 60% processing fee discount for online applications.
If you prefer a guided path, Whatsapp us for a discovery session and we’ll translate the numbers into a clear action plan for your business.
Key Takeaways
- Over 50 lenders mean better choices but compare packages closely.
- Rates reflect a benchmark plus a bank spread—understand both parts.
- DBS offers flexible tenures and a limited processing fee discount online.
- Fixed vs floating depends on your cash flow and market timing.
- We can help you estimate repayments and prepare a stronger application.
Understand today’s commercial property financing landscape in Singapore
The financing scene for commercial property in Singapore spans more than fifty banks and finance firms, and that competition shapes what you can secure.
Key differences: owner-occupied properties commonly qualify for higher LTVs (around 80%–90%), while investment properties usually see lower LTVs (60%–70%).
Banks do not follow a single TDSR-style rule for these assets. Instead, each lender applies its own assessment based on revenue, years in operation, cash flow, and the property profile.
- We map the full market so you understand why shopping across banks can improve your offer.
- You’ll learn how lenders look beyond headline numbers—focusing on business health, lease terms, and location.
- For SMEs, start discussions 3–6 months early to lock in favourable terms before conditions shift.
| Type | Typical Max LTV | Primary Assessment Focus | Typical Pricing Impact |
|---|---|---|---|
| Owner‑occupied property | 80%–90% | Operating history, cash flow | Lower spreads if business is strong |
| Investment property | 60%–70% | Lease profile, yield | Higher spreads, lower LTVs |
| SME borrower | Varies by bank | Projected cash flow, collateral | Offers tied to business plan quality |
Next step: Whatsapp us for a discovery session and we’ll curate bank options that match your business and property goals.
commercial loan interest rate singapore: benchmarks, fixed vs floating, and what you actually pay
Knowing how benchmarks and bank margins work helps you forecast true borrowing costs over months and years.
Current market snapshot: typical commercial property loan levels sit around 2.8%–3.2% p.a. That figure is a headline. Your actual cost mixes a benchmark (like the 3‑month SORA) plus a bank spread or a fixed package.
How a variable offer is built
Variable offers often read as “3‑month SORA + bank margin.” For example, if 3‑month SORA is 2.5% and the bank margin is 1.0%, Year‑1 could be ~3.5% p.a.
Compounded 3‑month SORA is calculated from daily SORA over the past three months and published by MAS. Resets commonly occur quarterly and affect cash flow predictability.
When fixed can beat floating
Sometimes a fixed package for the first two years sits below a floating alternative. This happens when markets expect policy easing and the yield curve prices cuts.
Locking in protects you from spikes, while a SORA‑pegged path can save money if rates fall. Consider tenure and amortization: longer years lower monthly payments but raise total cost.
| Component | Example | Cash‑flow impact |
|---|---|---|
| 3‑month SORA (benchmark) | 2.5% (compounded) | Quarterly reset can change payments |
| Bank spread | +1.0% Year‑1, +2.0% Year‑2 (example) | Adds to headline benchmark |
| Fixed package | Fixed for 2 years (DBS example) | Predictable payments, lock‑in applies |
Practical tip: compare a fixed 2‑year package versus a SORA‑pegged package across projected scenarios. Factor in fees, reset months, and your business cash flow.
Need clarity? Whatsapp us for a discovery session and we’ll benchmark current offers for your property and financing plan.
How much you can borrow and for how long: LTV, tenure, and lock‑in mechanics
Deciding how much you can borrow and for how long starts with the property type and your business cash flow.
Typical LTVs: banks commonly offer 80%–90% for owner‑occupied property and 60%–70% for investment property, subject to credit assessment.
Extended structures: some lenders pair a mortgage with an unsecured term facility to reach up to 100%–120% effective financing. This raises capital efficiency but adds risk, so we review cash flow assumptions and covenant impact with you.
Tenure realities
Most tenures run 20–30 years. Leasehold industrial property can cut that shorter: lenders often require 5–10 years of lease remaining after the repayment period.
A 20‑year remaining lease may cap your repayment period at 10–15 years, which lifts monthly instalments.
Fees and early repayment
- Common fees: processing fee, legal and valuation charges; some banks offer subsidies or time‑limited discounts.
- Example: DBS provides up to 80% LTV, up to 25 years repayment, a 60% processing fee discount for online application, plus legal/valuation subsidies.
- Lock‑in period clauses often bring early repayment charges — know these before you commit.
Practical step: we estimate your eligible LTV, map tenure to lease years, and list expected fees so you enter any purchase with clarity.
Want tailored numbers? Whatsapp us for a discovery session and we’ll run precise projections for your business property and application timeline.
Choosing the right package: SORA‑pegged vs fixed, bank offers, and repayment planning
Choose a package that fits your cash cycle and exit plan, not just the lowest headline figure.
How to decide: compare payment stability for a fixed term against the potential savings of a SORA‑pegged path. Fixed gives predictability for the first two years. A SORA‑pegged option can lower cost if markets ease.
DBS snapshot and practical checks
DBS offers fixed‑for‑2‑years and SORA‑pegged packages, with repayment up to 25 years and time‑limited online fee discounts.
Use a calculator to estimate monthly payments and stress‑test different scenarios over months and years.
What to model and why
- Include fees and the 60% processing discount when comparing total cost.
- Run scenarios for higher and lower rates and for different reset months.
- For businesses with tight working capital, model staged drawdowns or prepayments to preserve liquidity.
| Feature | Fixed (2 years) | SORA‑pegged | Impact on cash flow |
|---|---|---|---|
| Payment predictability | High | Variable | Fixed eases budgeting |
| Potential savings | Limited if rates fall | Higher if markets ease | Savings depend on market moves |
| Fees & offers | Apply processing discount | Apply processing discount | Can shift effective cost |
“Match the package to your hold horizon and cash flow; that avoids refinancing surprises.”
Next steps: prepare documents early, coordinate your application with valuers and lawyers, and run a repayment period analysis. Prefer human support? Whatsapp us for a discovery session and we’ll help you pick the package that best suits your property and business goals.
Refinancing and repricing strategy to lower your rate
Assessing options months before the lock‑in ends gives you leverage to negotiate better terms.
Timing
Review three to four months before expiry
Most commercial and industrial loans have a 1–3 year lock‑in. After this period, many facilities revert to higher rates.
We recommend you start a review 3–4 months before the lock‑in period ends. Legal conveyancing and valuation usually take 2–3 months, so early action avoids rushed decisions.
Reprice or refinance?
Start with a repricing request to your current bank to save on conveyancing and legal fees. If the repricing offer remains high, refinance to another bank for potentially larger savings.
- We set reminders to review your loan and avoid automatic revert hikes.
- We map a 2–3 month timeline: valuation → approval → conveyancing → settlement.
- We quantify savings after factoring all fees and repayment changes.
- For SMEs and investment owners, we reassess tenants, cash flow and property metrics to strengthen your assessment.
“Early planning turns refinancing from a risk into a saving opportunity.”
Need help? If you want support comparing repricing letters or refreshing your application, read our guide or Whatsapp us for a discovery session and we’ll handle negotiations and paperwork to help you save.
Conclusion
Ready to turn property plans into a clear financing pathway that protects your cash flow?
Buying for business use can unlock better LTVs and asset-backed funding. Ownership also supports liquidity, potential tax deductions on interest, and capital allowances that aid long-term planning.
Watch fees and the total period years of commitment, not just the headline rate. For shorter leases, right-size your years and tenure so monthly payments stay manageable.
If GST applies, plan cash flows and documentation early so you can claim where eligible. Many banks finance office, retail and industrial property; we filter lenders that match your asset and purchase purpose.
Strong: When you’re ready, Whatsapp us for a discovery session and we’ll streamline the application, valuation and legal steps from first chat to disbursement.
FAQ
What are the current benchmarks used to price business property financing?
Most banks price business property financing against SORA benchmarks, commonly the 3‑month SORA plus a bank spread. Lenders may also offer fixed packages for a set period. The final payable amount combines the benchmark, the bank’s margin, any product fees, and GST where applicable.
How does a SORA‑pegged variable structure work in practice?
A SORA‑pegged structure ties your periodic payment to a published benchmark (for example, 3‑month SORA) plus a margin. When SORA moves, your monthly instalment adjusts. Banks publish the spread they add; your credit profile and asset type affect that spread.
When might a fixed package be better than a SORA‑pegged option?
Fixed packages can suit you if you want payment certainty during periods of expected rate increases or if you have a short planning horizon. Consider the lock‑in duration and compare projected SORA outcomes — sometimes a fixed rate with an early‑repayment charge still costs less over the lock‑in period.
What is the typical borrowing limit and how is loan‑to‑value (LTV) applied?
LTV depends on use and property type. Owner‑occupied business properties often see higher LTVs (up to about 80%–90%), while investment or specialised industrial sites attract lower LTVs. Banks also consider remaining lease, asset value, and your business cashflow when setting limits.
Can I structure financing to achieve higher effective funding than standard LTV allows?
Yes. Some borrowers pair a mortgage with an unsecured term facility or working capital line to bridge funding needs. This can achieve near 100%+ effective financing, but it raises overall cost and requires careful assessment of repayment capacity and covenants.
What typical tenures and lease considerations apply to industrial or commercial property loans?
Tenures commonly range from 20 to 30 years, but lenders factor in the remaining lease term for the land or building. Shorter remaining leases can reduce maximum tenure and borrowing capacity. Ask the bank how lease remnants affect amortisation options.
What fees should I expect when applying and if I repay early?
Expect processing fees, valuation and legal fees, and possible arrangement fees. Many banks offer fee waivers or discounts for packaged deals. Early repayment during a lock‑in period usually triggers break costs or penalties; post lock‑in, prepayment is often free or carries a minimal fee.
How do banks like DBS position their commercial/industrial property packages?
Major lenders such as DBS typically offer both fixed and SORA‑pegged packages, competitive pricing, and tenures up to 25 years for qualifying borrowers. They may provide value‑adds like streamlined documentation or bundled working capital solutions for SMEs and asset owners.
What tools help estimate monthly instalments and stress‑test scenarios?
Use mortgage calculators to model principal, tenure, and benchmark swings. Stress‑test by increasing the benchmark by 100–200 basis points to see payment impact. Include fees, GST, and potential changes in tenancy or rental income in your projections.
When should I review refinancing or repricing options?
Start reviewing three to four months before your lock‑in ends. This gives time to compare repricing offers from your current bank and refinancing proposals from other banks. Early preparation helps avoid reverting to a higher standard rate and reduces time for legal conveyancing.
What are the main costs when switching banks versus repricing with the same bank?
Refinancing to another bank typically incurs conveyancing, valuation, and discharge fees. Repricing with the same bank may involve lower administrative costs but could include a restructuring fee. Compare total upfront charges against projected savings to decide which path is cheaper.
