Most people assume calculating an equity term loan is just “Value minus mortgage equals money you can take out.” Sounds nice, but the banks don’t see it that way. They follow a few rules stacked on top of one another, almost like building blocks and when one block shrinks, the whole thing shifts.
So in this guide, I’ll explain equity term loan calculation in Singapore using small, clear numbers. Think of it like explaining money maths to a child, minus the baby talk.
By the end, you’ll know exactly how banks size your loan, why two people with the same property get different amounts, and which parts you can actually influence.
Start With the Simple Picture: What You Have vs What You Still Owe
Every bank starts with one basic question:
“How much is your property worth today?”
That number becomes the ceiling.
But each bank’s valuation can differ, sometimes by 1 to 3%.
One of our clients had a condo valued at $1.65M by Bank A and $1.6M by Bank B.
Same unit, same week, two different numbers.
This alone changed the available equity by over $50,000.
And this ties naturally into equity term loan valuation and loan-to-value calculation, because valuation plus LTV decides the maximum combined loan allowed.
Let’s make it extremely simple.
Imagine this:
- Your property value: $1,000,000
- LTV allowed: 75 percent
- Your existing mortgage: $300,000
Here’s the math:
- Bank says max combined loan =
$1,000,000 x 0.75 = $750,000 - Your existing mortgage =
$300,000 - So the largest possible equity loan is =
$750,000 minus $300,000
= $450,000
Factor in CPF Usage and Accrued Interest
If you used CPF to buy your home, the bank considers this because CPF funds must be subtracted.
Example:
- CPF used: $120,000
- Accrued interest: $30,000
- Total CPF obligation: $150,000
Subtract this from the previous number:
$450,000 − $150,000 = $300,000 actual available equity
This is how much you could theoretically access before checking your income capacity.
You know what? This is often the surprise for first-time applicants — they see a high property valuation but forget that past CPF usage with accrued interest counts against cash-out.
But That Number Doesn’t Stick… TDSR Shrinks It Fast
Most people stop at the earlier number.
But the bank has a second question:
“Can you handle the monthly instalment under TDSR stress test rules?”
This is the part that hurts people’s expectations.
We’ve had clients tell us, “My property can release $600,000,” but after TDSR calculations, the approved amount falls to $380,000 or less.
TDSR checks your income, your existing loans, and a “stress-test” interest rate.
Let’s explain it with extremely simple “5-year-old” math.
Example:
Your monthly income: $8,000
TDSR cap is 55 percent.
So the maximum total monthly debt allowed =
$8,000 x 0.55 = $4,400
Let’s say your current mortgage repayment under stress-test rate is “counted as” $2,000.
So amount left for new loan repayment =
$4,400 minus $2,000
= $2,400
Now the bank calculates what loan size matches a $2,400 repayment.
Sometimes that means your actual equity release is much smaller than the LTV-based amount. This is why many owners look up how to calculate maximum equity term loan in Singapore based on LTV and TDSR, because the “property side” and “income side” don’t always agree.
If you are ready to see your actual numbers, use our expert help to get an accurate equity term loan calculation in Singapore and find out how much cash you can really unlock — without guessing
Put Together, This Is How Banks Calculate Your Quantum
The process is always done in this order:
- Get your property valuation
- Apply LTV rules
- Subtract your existing mortgage
- Subtract your CPF usage
- Check whether your income meets TDSR
- Adjust based on age, tenure and credit background
- Final loan amount surfaces
It’s not one formula.
It’s more like a funnel.
Every step makes the number tighter.
People searching for the right equity term loan calculation method for property owners expect a fixed formula. But banks combine valuation rules, LTV rules, income rules and internal scoring rules. And they all influence each other.
Quick Look: Why Your Income Matters More Than Your Property Sometimes
Let’s say your property has $700,000 of “calculable equity”.
Nice.
But if TDSR only allows you to borrow an amount that works out to a $1,500 monthly instalment, the bank adjusts the loan accordingly.
You may end up with $400,000 instead of $700,000.
A funny thing happens often.
Clients with high-value landed properties sometimes get lower equity amounts than condo owners earning stronger documented income. So the property “looks richer”, but the bank sees something very different.
This explains why some people ask about how lenders assess equity term loan quantum in Singapore. There’s a logic behind the number, but it’s not always visible.
Condo, Landed or Commercial: Why the Numbers Feel Different
If you’ve got a condo, you’ll notice banks tend to produce similar valuations.
There’s more transactional data and easier comparisons.
Landed homes, however, are trickier.
Valuations can swing dramatically depending on land shape, frontage, renovations, even recent sales along the street.
A small difference in valuation can shift your available equity by tens or hundreds of thousands.
Commercial units?
That’s a whole other world.
Banks check rental yields, past transactions in the same building, and business-use risks. This sometimes results in much lower valuation confidence.
That’s why homeowners sometimes look for guidance on topics like equity term loan calculation for condo and landed properties in Singapore, because the valuation behaviour isn’t the same across categories.
How Much Equity Can You Usually Release? Realistic Ranges
Most people want the real numbers, not the fluffy theory.
From what we’ve seen with hundreds of cases:
- Typical condo equity release: 300k to 800k
- Landed home equity release: 500k to 3M
- Commercial property equity release: 100k to 600k
But the actual amount depends entirely on your income, documentation and total debt situation.
This ties naturally into how much equity you can release with a equity loan in Singapore, because valuation is just one side of the conversation.
Small Tweaks That Increase Your Eligible Loan
Here’s the part borrowers often underestimate:
Small adjustments can boost your loan amount more than you expect.
Some examples:
- Avoiding credit card debt can raise your TDSR headroom
- Clearing a small car loan increases your allowed monthly debt space
- Showing consistent income across CPF, bank statements and NOA helps your application
- For business owners, taking regular salary instead of ad-hoc withdrawals increases consistency
We had one client who raised his equity loan approval by roughly $60,000 simply by reducing a credit card debt and submitting clearer income documentation.
This is the kind of practical insight people expect when they refer to maximum loan quantum calculation. Often it’s not the big things, but the small hidden factors.
Why a Broker Helps Even When the Rules Are the Same
A broker cannot bend MAS rules.
But what they can do is point you to lenders whose valuations, income treatment or tenure rules match your profile.
One bank may calculate commercial units more conservatively, while another gives a higher valuation.
One bank may haircut variable income at 30 percent, another may consider more of it.
All of this affects your final number.
Those differences matter.
A client once came in thinking he could only get $250k.
After comparing lender options, he walked away with $330k — a 32 percent difference — purely from choosing the right bank.
That’s why some borrowers look for an equity term loan broker, but honestly, the guide is useful only when paired with specific bank behaviour.
Bringing It All Together Without Making It Sound Complicated
When all the layers are combined, equity term loan calculation in Singapore is simply:
- How much the property is worth
- How much you owe
- How much income you can show
- How long you can stretch the tenure
- How the bank views your risk
- And which lender’s system suits your profile
It’s not magic.
It’s not guessing.
It’s structured, even if it feels unpredictable from the outside.
Once you understand the building blocks, the numbers stop being surprising.
If you’d like someone to break it down for your profile, you can reach out anytime at Approved Consultancy.
