Glossary – Terms, Jargons and Definitions

Glossary - Terms and Definitions BigWe’ve compiled a list of definitions, terms and financial jargons that you would usually come across when dealing with mortgages, loans and financing matters. We hope u find the list to be helpful.

 


 

  • Accounting & Corporate Regulatory Authority (ACRA) - ACRA provides a one-stop shop to customers by the integration of e-services with multiple agencies such as the Inland Revenue Authority of Singapore (IRAS), Spring Singapore and Singapore Government Network Information Centre (SGNIC). These initiatives allow customers to sign up for a whole suite of services upon successfully registering a new business entity with ACRA.
  • Accrued Interest - Accrued Interest is interest that has been incurred but not paid.
  • Addition & Alteration Works (A&A) - These are renovation works carried out on a property premises.
  • Additional CPF Housing Grant (AHG) - The AHG is an additional subsidy provided by the government to assist eligible first-timers to buy new HDB or resale flats. On 6 Feb 2008, the AHG was enhanced to make it easier for first-timers to buy a flat. Eligible first-timers can use the AHG amount (up to $40,000) to offset the purchase price of a resale or new HDB flat.
  • Adjustable Rate Mortgage (ARM) Index - This index is the peg for the HDB market interest rate. The ARM Index is currently computed based on the average of the non-promotional HDB housing loan rates of the three local banks – DBS(POSB), OCBC and UOB. The HDB market interest rate is subject to the floor rate of the HDB concessionary interest rate.
  • Amortization - The gradual reduction in the principal amount owed on a debt. During the earlier years, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal, unless there has been negative amortisation.
  • Annual Value (AV) - The Annual Value of a property (AV) is the estimated annual rent of a property, excluding the rent for furniture, fittings and service charge. The IRAS (Income Revenue Authority of Singapore) determines the AV of the property by analysing rents of comparable properties.
  • Approval-in-principle (AIP) - An indication by the Bank of the amount of home loan that a prospective purchaser is eligible for. However, an AIP does not equate to a formal approval. The purchaser must still submit a Home Loan application, and the Banks approval is dependent upon various factors, including property valuation, credit checks and other criteria. It is advisable to know your AIP amount before committing to a property.
  • Appraisal/ Valuation Report- A written estimate of a property's current market value prepared by an appraiser.
  • Appraiser / Valuer - A professional with knowledge of real estate markets and skilled in the practice of appraisal. When a property is appraised in connection with a loan, the appraiser is selected by the lender, but the appraisal fee is usually paid by the borrower.
  • AssetLine / Overdraft - AssetLine is a secured short-term loan facility that allows the customer to access cash using his property as property. There are no restrictions on how the funds may be used.
  • Available Housing Withdrawal Limit (AHWL) - It is the maximum CPF amount that you can withdraw if you have utilised 100% of your flat's Valuation Limit (VL).
  • Balance of Sale Proceeds – Balance money paid by the buyer on legal completion of the property transaction.
  • Balloon Payment - A lump-sum payment, which is larger than your regular periodic payment, paid at the end of your loan repayment period.
  • Banker's Guarantee (BG) -BG is a commonly acceptable mode for deposit to be furnished.
  • Basis Point - An amount equal to 1/100th of a percentage point. For example, a fee calculated as 50 basis points of $200,000 would be 0.50% or $1000.
  • Bankruptcy Search - A search conducted to determine if any bankruptcy proceedings and other legal proceedings have been filed against the borrower. A bankrupt may not transfer his interest to a purchaser or mortgage his property to a bank, without the Official Assignees consent.
  • Borrower - Borrower(s) refers to the person(s) that is/are taking the home loan from the Bank. A non-owner may be included in the loan application as a co-borrower to fulfil the loan requirements.
  • Bridging Loan - A credit facility granted for the purchase of residential property by the borrower, pending the receipt of proceeds of sale of another residential property owned or co-owned by the borrower. Loans will only be disbursed after the buyer of your existing property has signed an Option to Purchase (OTP) or executed a Sale and Purchase (S&P) Agreement or confirmation of the first appointment from HDB. The loan has to be repaid to the Bank in full within 6 months after its first disbursement.
  • Build-To-Order (BTO) - The Build-To-Order (BTO) is a mode of sales which allows HDB flats to be built according to housing demand and offers flexibility in location and timing for flat buyers
  • Building Plan - These are new works and addition and alteration works requiring approval from the relevant authorities such as URA, BCA and FSSD.
  • Cancellation Fee - Cancellation fee is payable when the loan is cancelled before it is disbursed.
  • Capped Mortgage – The interest on your mortgage is capped at a certain maximum limit. Good if you will to foresee that interest rate will rise in the future and protects you against a rising interest cost as the rate on your loan is capped.
  • Cash-Over-Valuation (COV) - COV refers to the difference between the resale price and the market valuation of a flat. As resale flats operate in a free market situation, transactions take place on a willing-buyer, willing-seller basis. Tthe price is open to negotiation and mutually agreed between both parties.
  • Caveat - A caveat serves as a public notice that the person lodging it is claiming an interest in the property and lapses in 5 years from the date of lodgement unless it is discharged or renewed.
  • Certificate of Occupancy - A certificate issued by a local governmental entity responsible for the use of land in the community where the property is located stating that the structures on the property or any improvements made to those structures comply with the codes, ordinances and regulations of that governmental entity and that they may be occupied.
  • Certificate of Statutory Completion (CSC) - Certificate of Statutory Completion (CSC) / Temporary Occupancy Permit (TOP) is issued by the Commissioner of Building Control to a building project when the building works are completed. The building can only be occupied after a CSC or TOP has been granted.

Application may be made directly for a CSC when all the requirements have been complied with. Otherwise, if only certain requisites have been complied with, application for a TOP may be made first before finally complying with all requirements and obtaining CSC. CSC is usually issued one year after TOP.

  • Claw-back Period - The period during which, if you fully redeem your mortgage, the bank will reclaim the cost of "freebies" issued to you when you took on a loan with them. These typically includes the legal subsidy and in some cases, valuation fees and fire insurance premiums.
  • Collateral - An asset or security pledged for the payment of a loan.
  • Combo Home Loans – A combination of 2 or more different type of financing packages. Example. Fixed rate and Variable rate or Sibor and SOR pegged. Percentage of allocation depends on package features, some would allow you to specify how much composition you would like for each component.
  • Commitment Period - Lock in period of a mortgage with the bank. The borrower will be subjected to a penalty if he/she refinance his/her loan within the commitment period.
  • Conservancy / Maintenance Fees - Fees collected for the purpose of maintenance and use of common property.
  • Construction Loan - Construction Loan is a short term loan for financing the construction of a new property, or the reconstruction, addition or alteration of your existing property.
  • Conveyance - The legal process in which ownership of the property is transferred from the seller to the buyer. Generally undertaken by a lawyer.
  • Conversion - Conversion refers to the act of transferring your existing loan package to another within the same bank. It is normally subject to a conversion fee.
  • CPF Board - Central Provident Fund Board
  • CPF Housing Grant - The CPF Housing Grant scheme is a housing subsidy provided by the government to eligible buyers of HDB resale flats. The CPF Housing Grant (in the form of CPF monies and not cash) can be used for the initial payment to reduce the mortgage loan for the purchase of flatsEligible buyers of DBSS flats and Executive Condominiums can also apply for the CPF Housing Grant. CPF Housing Grant however cannot be used to pay the cash-over-valuation (COV) for resale flats.
  • CPF Housing Withdrawal Limit - CPF Housing Withdrawal Limit involves two types of limits, Valuation Limit (VL) and Withdrawal Limit (WL)

(a) Valuation Limit (VL) is the lower of the purchase price of the property, and the value of the property at the time of purchase. Owner(s) can use the Ordinary Account (OA) savings up to the VL to buy the property and/or pay the monthly instalments of the home loan, without having to meet any condition on the CPF balances. It is possible for your housing loan to be outstanding when your CPF withdrawal has reached the 100% VL. This is largely because you are using CPF to pay both the home loans principal amount as well as the interest charges. The higher the interest on the home loan, the faster the 100% VL will be reached.

(b) Withdrawal Limit (WL) is the maximum amount of CPF beyond the VL that the owner(s) can use for the property. Once the WL is reached, no further withdrawal of CPF is allowed. From 2008 onwards, the WL is 120% of VL. The WL is the available CPF OA balances less the prevailing Minimum Sum cash component.

  • CPF Minimum Sum – A retirement savings plan whereby CPF members must set aside savings for their retirement. The scheme provides members with a monthly income to support a modest standard of living after their retirement and for members that are unable to set aside the full minimum sum as stipulated by the CPF Board, their property bought with CPF savings will automatically be pledged to make up half of the minimum sum requirement. Upon reaching 55, members may withdraw a portion of their CPF savings based on their available CPF balances. The CPF minimum sum plan ensures that members will have some regular income from their drawn down age to live during their retirement. The CPF Minimum Sum was set at $80,000 in 2003 and will be raised to $120,000 by 2013. The amounts will be adjusted yearly for inflation.
  • CPF OA Balance – The balances in your CPF Ordinary Account
  • CPF SA Balances – The balances in your CPF Special Account
  • Credit Limit -The maximum amount you can borrow under a line of credit.
  • Credit Report / Credit History - A credit report records an individual's credit history and is used by banks to determine a loan applicant's creditworthiness.
  • Credit Bureau Report - Credit Bureau Report is a report that shows the loan payment performance of individuals based on the data provided by the Banking and Finance industry to the Credit Bureau Singapore (CBS) each month. The Credit Bureau Report is confidential. You can request for a copy of your Credit Bureau Report either on-line at www.creditbureau.com.sg, any of the SingPost branches or the Credit Bureau office.
  • Creditworthiness -The likely ability of a borrower to repay debt.
  • CVY Account – Conveyancing account with appointed banks. These are special bank account, with additional safeguards, held by the law firm with banks appointed by the Minister of Law. Release of the money from this account requires joint authorisation from the lawyers acting for the buyer and seller in the transaction.
  • Conveyancing Money Service – Service provided by the Singapore Academy of Law to hold conveyancing money on behalf of the buyer and seller. Release of money requires joint authorisation from the lawyers acting for the buyer and seller in the transaction.
  • Daily Rest Interest – The computation of amortised interest based on the outstanding balances at the end of a day.
  • Debt Servicing Ratio/ Debt-to-Income Ratio - A computation of total monthly debt obligations to total monthly gross income. This helps to assess the repayment ability of the borrower over a specific loan tenure.
  • Default - A breach of your obligations to the bank, which may allow the bank to recall your loan, such as failure to make mortgage payments on time.
  • Deferment of Payment - It is an agreement to make portions of your mortgage payments at a later time. The total amount paid will be the same or more, but a deferment can be a way to assist homeowners experiencing a temporary hardship.
  • Deferred Payment - Commonly applicable for Build Under Construction properties. A scheme whereby the usual progress payments are deferred to a later date. For example, the scheme may allow you to make an initial payment of 20% to the property developer, with the balance due only upon T.O.P. being obtained from the relevant authorities.
  • Delinquent - Failure to make payments on time. The Bank may issue a Notice of Default after the borrower is delinquent for a few months.
  • Deposit Matching Mortgages - The housing loan is tagged together with a savings account whereby the deposits in the savings account can be used to offset a portion of the interest for your home loan. Useful if you have excess cash liquidity and would like to maintain flexibility for your cash.
  • Design, Build and Sell Scheme (DBSS) - This scheme involves the private sector in the development of public housing so as to bring about greater innovation in the building and design of flats and offer more housing choices to flat buyers.
  • Down Payment - A portion of the purchase price that a buyer is required to pay in cash and CPF savings.
  • Early Redemption - Refers to the repayment of the loan (principal and interest) before the maturity of the loan. There are two main types of loan redemption, partial redemption and full redemption. If you plan to repay your loan early, do seek clarification on any fees and charges that may be imposed.
  • En-Bloc Sale - Also widely known as a collective sale, it is the sale of an entire private strata development by way of majority consent and is governed by the Land Titles (Strata) Act.
  • Encumbrance - Any lien against a property or any restriction in its use, such as an easement; a right or interest in a property held by one who is not the legal owner.
  • Equity - The difference between the current market value of your home and your outstanding mortgage balances and other liens.
  • Estate - The ownership interest an individual holds in real property. This is also the total sum of all the real properties and personal properties owned by an individual at the time of death.
  • Executive Condominium (EC) - Executive Condominiums (EC) were introduced to cater to Singaporeans, especially young graduates and professionals who can afford more than an HDB flat but find private property out of their reach. ECs are comparable in design and facilities to private condominiums as they are developed and sold by private developers.
  • Fair Market Value - The likely selling price of a property between a willing buyer and a willing seller in the open market. In a mortgage or a home equity loan, the fair market value is usually determined by a valuation done by a certified valuer.
  • Fifth (5th) Charge Term Loan - An equity term loan that allows you to unlock and cash out on the equity of your property. The financing interest rate and tenor is similar to a mortgage housing loan but as the ranking charge is rank fifth, hence it’s commonly known as 5th charge term loan. A housing loan has the 1st ranking charge. This is to say that in the event of a default, the housing loan will have the first order of repayment while the term loan will have the 5th order of repayment. There are a total of 5 ranking charge on a mortgage. The 2nd, 3rd and 4th ranking charges are CPF monies.
  • Fire Certificate (FC) - An annual certificate issued by Singapore Civil Defence Force to a public building and to an industrial building.
  • Fire Insurance - The insurance on your property against fire damage, which commonly covers at least the reinstatement value or outstanding loan, whichever is higher.
  • First Mortgage - A mortgage whose lien is superior to the lien of any other mortgage on the same property. This lien is superior either because it was recorded prior to all other mortgages, or because the lender of another mortgage, which had been recorded ahead of this mortgage has agreed to have a lien subordinated to the lien of this mortgage.
  • Fixed Rate Housing Loan - The interest rate on such loans is fixed for a set period, during which charges are often imposed for early redemption. Being protected against interest rate increases allows for easy monthly budgeting. However, if market rates were to fall during the fixed interest period, you may be left paying a comparatively higher rate.
  • Floating or Variable Rate Housing Loan - The interest rate on such loans may fluctuate or change periodically, often in relation to a reference rate. When the reference rate changes, payments may increase or decrease accordingly. Examples of reference rates are the Banks prime lending rate, SIBOR, Swap Offer Rate or rates offered by the CPF Board.
  • Foreclosure - Occurs when a lender pursues its lien on a property. Foreclosure action generally begins after 90 days of non-payment. Parties are able to bid on the property as part of the foreclosure sale, and the title will be transferred to the successful bidder, subject to any applicable redemption period.
  • Full Capital Repayment - Refers to the full payment of the outstanding principal of the loan / mortgages.
  • Full redemption Notice - The serving of notice to fully redeem the loan / mortgage held with the bank.
  • Guarantor Guarantor - Refers to the person who agrees to be responsible for another person’s liabilities in the event of that persons default.
  • HDB – Housing Development Board
  • HDB Loan Eligibility (HLE) - The HLE letter provides prior information on flat buyers' loan eligibility quantum and monthly instalment to ensure that flat buyers are able to pay for their home and service the loan without overstretching their finances.
  • Home Content Insurance – An insurance that offers protection and coverage for the interior content of a home / house.
  • Home Loan - A Home Loan / Mortgage Loan is a financing loan secured against the collateral of a property by the borrowers.
  • Home Office - Home Office Scheme was implemented on 10 Jun 2003. Under the Scheme, HDB flats can be used as a home office and for business registration.
  • Home Insurance / Mortgage Reducing Term Assurance (MRTA) - Home insurance protects the borrower's family from losing the home should the borrower becomes mentally/physically disabled or pass away before the home loan is fully repaid. The Central Provident Fund Board (CPF) Home Protection Scheme is compulsory for all HDB flat owners who are using their CPF to repay their housing loans. Although it is not compulsory for private property owners to purchase mortgage insurance, it is advisable that they do so to prepare for unfortunate events and provide financial protection for themselves and their families.
  • Home Protection Scheme (HPS) - The Home Protection Scheme (HPS) is a mortgage reducing insurance which insures CPF members and their families against losing their homes should members become physically / mentally incapacitated or pass away before their housing loans are paid up.
  • Housing Agent Commission - A fee paid to the housing agent engaged to buy/sell the property. The quantum or amount of the commission is usually a percentage of the sale price.
  • Housing Loan 1st charge – Bank's or HDB’s Outstanding Loan
  • Housing Loan 2nd charge - CPF principal sum up to 100% of Valuation Limit plus CPF used to pay the legal and stamp fees in the purchase, and cost of upgrading under the HDB Main Upgrading Programme.
  • Housing Loan 3rd charge:
    - CPF principal sum beyond the 100% Valuation Limit plus accrued interest (Equal standing)
    - Repayment of outstanding balance of the housing loan interests (Equal standing)
  • Housing Loan 4th charge:
    - CPF legal costs and expenses (Equal standing)
    - Financier's legal costs and expenses (Equal standing)
  • Housing Loan 5th charge – Cash out equity term loan / overdraft
  • In-Principle Approval - In-principal approval is an approved loan amount given by the Bank based on the credit report and affordability of the borrower. It is not a binding document and is subject to the property valuation and other checks in the application process.
  • Interest Rate - Interest Rate is the rate of interest that is charged on the loan. It can be fixed, variable, or a combination of both over the loan period.
  • Interest Servicing Mortgages - Servicing only the interest on your mortgage. A typical mortgage consist of Principal (P) + Interest (I). The outstanding principal is not reduced at the end a monthly instalment as repayment is only due on the interest payable.
  • Investment Property - Property that is purchased to generate rental income or to be sold once it has appreciated in value.
  • Joint-tenancy Ownership - This is a term that describes joint ownership of a property by two or more owners, without division of the shares. Upon the death of any joint holder, his interest becomes vested in the survivor(s).
  • Jumbo Loan -A mortgage in which the loan amount exceeds the maximum amount eligible for purchase by either Government Sponsored Enterprise (GSE – Fannie Mae or Freddie Mac). Loan amounts are considered Jumbo if they exceed the following amounts based on the applicable property type (note: these amounts may change from time to time):
    • 1 Family – $417,000
    • 2 Family – $553,850
    • 3 Family – $645,300
    • 4 Family – $801,950
  • Land Title Search - A search which shows whether a property has any prior encumbrance or lodgement; details of owners; area of the property, and whether the owner has used CPF savings or taken a bank loan.
  • Late Charge - The penalty charged to the borrower when a payment is made past the due date and any allowable grace period.
  • Legal Fees - The costs for legal services rendered in the purchase, sale, mortgage and/or redemption of a property, including with respect to withdrawal of CPF funds. Costs often include disbursements such as registration fees on transfers; lodgement fees for caveat; legal requisitions; search fees etc. You may use cash or CPF savings to pay legal fees.
  • Legal Requisitions - Searches conducted at various government departments inquiring into the status of a property, for example, encumbrances, whether the property is affected by any works or if notices have been issued in respect of the property.
  • Letter of Offer - A letter issued by the Bank stating the terms and conditions upon which the Bank makes a formal offer of loan to the borrower.
  • Lien - A claim by one party against the property of another as security for a debt. This must be discharged when the property is sold. A mortgage is a form of lien.
  • Loan Amount - The amount of money that you intend to borrow from a financial institution for the purchase of your home. Subtracting the down payment from the purchase price of the home will provide you with the loan amount.
  • Loan broker – An Independent Advisor offering a wide ranging of financing solutions from Mortgages, Business Loans, Trade Financing, Factoring, Commercial Loans, Machinery and Equipment financing to Property mortgages, offering consumers and businesses a one stop solutions provider for all your financing needs. The loans are ultimately still underwritten and financed by the banks. A Loans Broker does not fund the loans.
  • Loan Quantum - The loan quantum or principal is the amount of money that you borrow.
  • Loan Tenure - The period of time that you may take to fully repay your loan.
  • Loan-to-value (LTV) - The housing loan amount represented as a percentage of the property's value. Thus, a house worth S$500,000 with a mortgage loan of S$250,000 would have a LTV of 50%.

Based on the latest guidelines imposed by MAS, the maximum LTV limits for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase is capped at maximum of 60%.

For borrowers who do not have any outstanding housing loans, the maximum LTV limit is 80%.

  • Lock-in period - The time period during which you will have to pay an early redemption charge (usually expressed as a percentage of the loan quantum) if you repay your loan in full. Banks may also impose a charge for partial payments beyond your monthly instalments within this period.
  • Lump Sum Payment - Lump sum payment refers to repaying part of the remaining mortgage loan / upgrading cost.
  • Maintenance and Service Charges - Maintenance and service charges vary with the residential development. Part of the monthly maintenance contribution will be allocated to a sinking fund, which are funds set aside for periodic repainting, replacement of electrical and mechanical installations and other major repairs and improvements to the development.
  • Maturity Date - The day on which all outstanding principal, interest and fees must be repaid.
  • Micro Enterprise – A small type of business, often registered as having 10 or less employees with a typical turnover of about $200,000 - $300,000
  • Minimum Occupation Period (MOP) - This is the minimum period of time the HDB flat owners must physically occupy their flats before they are eligible to sell their flats in open market. The period depends on:
  • Purchase mode
  • Financing mode
  • Flat type
  • Monthly Rest Interest – The computation of amortised interest based on the outstanding balances at the end of a month.
  • Mortgage – The transfer of an interest in your property to a lender (bank) as security for the loan granted to you for the purchase.
  • Mortgage broker - An Independent advisor offering mortgage solutions from multiple lenders. A mortgage broker counsels on the loans available from different wholesalers. The mortgages are ultimately still underwritten by the banks or financial institutions. A mortgage broker does not fund the loans.
  • Mortgage Modification - A reworking of a mortgage agreement, sometimes even altering the interest rate. This alternative may accommodate a homeowner's situation that has changed since the original loan agreement was signed.
  • Mortgage Note - A document signed at closing which states the borrower's promise to re-pay a sum of money. The note states an interest rate and a fixed period of time (term) for repayment.
  • Mortgagee - The lender or other party named in the mortgage as the party who is entitled to receive repayment of the home loan. Mortgagee refers to the lender (the Bank).
  • Mortgagor - Mortgagor(s) refers to the owner(s) of the pledged property (mortgage).
  • Mortgage-In-Escrow - Mortgage done in advance and is signed by the borrower against borrowing before the property title deed is issued. Applies to building under construction (“BUC”) projects.
  • Mortgage Insurance - A reducing term life insurance policy that protects the insured's (borrower) family against liability under the housing loan in the event of his death, total or permanent disability, or terminal illness.
  • The Central Provident Fund Board (CPF) Home Protection Scheme is compulsory for all HDB flat owners who are using their CPF to repay their housing loans. Although it is not compulsory for private property owners to purchase mortgage insurance, it is advisable that they do so to prepare for unfortunate events and provide financial protection for themselves and their families.
  • Notice of Assessment (NOA) - Notice of Assessment refers to your tax bill. It shows the types of income and amount of income subject to tax, calculates the tax amount you need to pay and shows the deductions given, as well as the credit balance to be refunded to you.
  • Option Deposit – Paid by buyer to seller (and held by a stakeholder) when he exercise the option to buy through the option form, usually 4-9% of the purchase price.
  • Option Fee - A fee paid to the seller as consideration for the option to purchase a property. The Option to Purchase will be granted upon the payment of this fee.
  • Option to Purchase - A right granted by the seller to the purchaser, to buy the property within a time frame upon payment of an Option Fee. For private properties, it is usually 1% of the purchase price. For HDB, the option fee applicable is up to $5000.
  • Owner Occupied property - Property purchased for own stay and use.
  • Partial Capital Repayment - Partial capital repayment refers to lump sum payment of mortgage loan where ad hoc payment(s) is/are made to repay part of the remaining mortgage loan.
  • Payment Holiday – Allows for break or skip of the monthly repayment for a certain period of time.
  • Power of Attorney (POA) - A Power of Attorney is a legal document that allows a person ('donor') to appoint another person ('attorney') to act on his behalf and in his name on matters specified in the Power of Attorney. You need a Power of Attorney if you are unable to attend personally to matters relating to the buying your HDB flat. For instance, if you are going overseas. You are advised to obtain the Power of Attorney before you leave the country.
  • Prepayment - Lump sum payments made in addition to your monthly installments.
  • Prepayment Penalty - A fee charged to a borrower who partially or fully repays the loan in full within the loans lock-in period. (Sometimes also referred to as a redemption penalty).
  • Premium Flat - Premium flats are fitted with full floor finishes as well as quality sanitary ware.
  • Prime Lending Rate / Board Rate - Prime Lending Rate / Board Rate are interest rate charged by the bank to credit-worthy customers. It is usually used as a benchmark for loans and mortgages.
  • Progress Payment - Payment amount(s) predetermined and scheduled by the developer to correspond with the property various stages of development. Upon completion of each stage of construction, the developer will call for the required payment.
  • Property Tax - A tax levied on immovable properties. All property owners are liable to pay property tax. The property tax rate for owner-occupied residential premises is 4% and for other properties, 10% of annual value.
  • Refinancing - Moving a loan (including any undisbursed amount) from one bank to another bank before refinancing your loan, you should check on the charges you may incur (e.g. lock-in period, claw-back period) upon cancellation of your existing loan.
  • Repricing - This commonly refers to the switch from one interest rate package to another with the same bank.
  • Repayment Ability Ratio (RAR) - The percentage of your total debt compared to your total income before taxes, expressed as a percentage. The lower the ratio, the healthier your finances. Depending on the type of property, employment and income level, the loan will be rejected if the RAR is too high.
  • Resale Price Index - The HDB Resale Price Index tracks the overall price movement of the public residential market. The index is calculated using resale transactions registered across varius towns, flat types and models, with the fourth quarter of 1998 as the base period (i.e. index ha value of 100 in 4Q98). The Index is used by comparing how it changes from one period from another.
  • Reverse Mortgage - A special type of home loan that allows you to convert a portion of the equity of your home into cash. The equity is release in the form of monthly payment after deducting interest payable to the bank / financial institutions.
  • Sales Proceed – Final sum of money to be received by the seller on the legal completion day of the property transaction.
  • Sale & Purchase (S&P) Agreement - A formal contract for the sale and purchase of a property.
  • Singapore Interbank Offer Rate (SIBOR) - Singapore Interbank Offer Rate (SIBOR) refers to the rate that financial institutions in Singapore lend/borrow unsecured funds to/from each other. This rate is transparent and published daily in The Business Times.
  • Small and Medium Enterprise (SME) – Typically businesses with net asset of about 15 million or less with less than 200 employees.
  • (IRAS) Stamp Duty for Purchases- These are documents that are prepared and signed when you buy or sell your property. Stamp duty is payable on the actual price or market price whichever is higher.  The buyer is responsible for paying buyer’s stamp duty.  Where seller’s stamp duty is applicable, the seller is responsible for paying seller’s stamp duty.

For completed properties, Stamp Duty must be paid within 14 days from the date of signing the Sale and Purchase Agreement if the document is executed in Singapore. For uncompleted properties, Stamp Duty must be paid within 14 days from the date of exercising the Option to Purchase.
Stamp Duty on Transfer of Property
Duty payable ad valorem on the purchase price (PP):
First $180,000 1%
Next $180,000 2%
Beyond $360,000 3%
Calculation Formula Purchase Price (PP) x 3% less $5,400 (where PP is > $360,000)

  • (IRAS) Stamp duty rate for Mortgage - These are documents that are prepared and signed when you obtain a loan from banks for your property purchase.  Stamp duty is payable on the loan amount.  The person who obtains the loan (mortgagor) is responsible for paying the stamp duty on the mortgage document.

Duty Payable based on the amount of facilities granted on your mortgage.

Every $1,000 or part thereof        $4 (Maximum capped at $500)

  • (IRAS) Stamp duty rate for Lease / Tenancy - These are documents that are prepared and signed when you rent a property. Stamp duty is calculated on the actual rent or market rent whichever is higher.  The person who leases or rents the property (lessee or tenant) is responsible for paying stamp duty.
  • Swap Offer Rate (SOR) - Swap Offer Rate (SOR) is SIBOR plus lending costs incurred by the banks. It is as transparent as SIBOR that reflects market conditions. This rate is transparent and published daily in The Business Times.
  • Temporary Fire Permit (TFP) - A permit issued by Singapore Civil Defence Force to enable application of Temporary Occupation Permit from BCA, with minor non-compliances to be complied prior to application of Fire Safety Certificate( FSC). A building owner may also apply and obtain a Temporary Fire Permit (TFP) for a limited period to occupy or use the premises, prior to obtaining the FSC. The TFP is only issued on condition that the fire safety works of the project has been satisfactorily completed with very minor outstanding issues left to be complied with. The timeframe to obtain the FSC after issuance of the TFP will depend on the size, type and complexity of the project. Normally, a maximum of 6 months will be granted.
  • Temporary Occupation Permit (TOP) - Only applicable to uncompleted properties. Receipt of TOP means keys can be collected and the property is ready for occupation. Issued by the Commissioner of Building Control that the building can be occupied.
  • Tenancy Agreement – A legal agreement / contract stipulating the terms, rental yield and tenure of the rental of a property.
  • Tenancy in Common - Joint holding of a property, where each owner has a distinct share in the property. Shares owned need not be in equal portions. Upon the death of a joint owner, his interest will be disposed of according to his will or under laws of intestacy.
  • Title Deed - A legal document showing a person's ownership of a property.
  • Title Search - An examination of records used to determine the legal ownership of property and all liens and encumbrances on it. Usually performed by a lawyer.
  • Total Discharge of Mortgage (TDM) - For redemption of loan, you need to pay a conveyancing fee and/or registration fees for the total discharge of mortgage (TDM). The fees payable depends on the flat type and the lease position of your flat respectively.
  • Unencumbered Property - A property that has been fully paid up.
  • Unique Entity Number (UEN) - UEN is a unique number for all entities such as businesses, companies and societies that operate in Singapore to interact with government agencies.
  • Valuation - Market value of a property indicated by a licensed valuer.
  • Valuation Limit (VL)- The VL is the lower of:
    • The purchase price of the property, and
    • The value of the property at the time of purchase.
  • Variable Rate / Floating-Rate Loan - An interest rate that may fluctuate or change periodically, often in relation to an index, such as the prime rate or other criteria. Payments may increase or decrease accordingly. A variable/floating-rate loan is usually benchmarked against the Bank’s reference rate. The reference rate can be the Prime Lending Rate, SIBOR, SOR or rates offered by the CPF Board.
  • Writ of Possession (WOP) - A formal document, issued by a law court or a person in a authority, stating a legal obligation to re-possess.
  • Writ of Seizure (WOS) - A formal document, issued by a law court or a person in a authority, stating a legal obligation to seize.