How Cash-Out Refinancing Works in Singapore (2026): Formula & Worked Example
Cash-out refinance (equity term loan) lets you borrow against the appreciated value of a private property you already own and take the difference as cash. The Maximum Withdrawable Loan = 75% of current valuation (or 45% if you have another outstanding housing loan), less your outstanding loan, less CPF principal + accrued interest used. HDB flats are not eligible — private property and ECs past MOP only. TDSR 55% applies unless you borrow 50% or less of value. 2026 pricing follows ordinary home-loan packages — fixed from ~1.4% p.a. or SORA-pegged.
- What cash-out refinance is (and what it is not)
- Eligibility — why HDB is excluded
- The Maximum Withdrawable Loan (MWL) formula
- The CPF deduction trap
- TDSR and the 50% threshold exemption
- Worked example — S$2M condo
- Smart uses (and what's off-limits)
- Commercial property cash-out — a different regime
- 2026 cash-out rates
- Three moves before you apply
- Common questions
What Cash-Out Refinance Is (and What It Is Not)
Cash-out refinancing (also called an equity term loan or home equity loan) lets you borrow against the appreciated market value of a property you already own. You take the difference between the current valuation and your outstanding loan as cash. It is structured as a term loan secured on the property.
It is one of the cheapest ways to raise capital in Singapore. The loan is secured against real estate, so it is priced at ordinary mortgage rates (fixed from ~1.4% in 2026) instead of unsecured personal-loan rates of 6–10% and up. For business owners, investors and renovators, that rate gap is the whole reason to do it.
A few things it is not:
- It is not a way to pull HDB equity. HDB flats are excluded.
- It is not a way to convert CPF back into cash. CPF used is deducted from the headroom.
- It is not a route to fund a second residential property while dodging ABSD. That use is restricted.
- It is not free of TDSR, unless you stay at or below 50% of value.
Eligibility: Why HDB Is Excluded
Only private residential property (condominiums, landed) and Executive Condominiums that have completed their 5-year Minimum Occupation Period qualify for cash-out refinancing. HDB flats are not eligible, full stop.
The reason comes down to policy. HDB flats are subsidised public housing, and the rules do not let owners extract that subsidy-inflated equity as liquid cash. So an HDB owner who needs liquidity has to look elsewhere. The flat itself cannot be cash-out refinanced no matter how much it has appreciated. If you own both an HDB and a private property, only the private one can be tapped.
The Maximum Withdrawable Loan (MWL) Formula
Three deductions sit between your property's valuation and the cash you can extract: the LTV cap, your outstanding loan, and CPF used.
The amount of cash you can extract is the Maximum Withdrawable Loan (MWL):
The 75% moves depending on your situation:
- You get the full 75% LTV if you have no other outstanding housing loan on another residential property.
- It drops to 45% LTV if you have one or more other outstanding housing loans, which sharply cuts the cash you can pull on the second property.
The two deductions after the LTV cap, your outstanding loan and the CPF you used, are where most borrowers get a shock. A property worth S$2M does not hand you S$1.5M in cash. It hands you S$1.5M minus your existing loan minus every CPF dollar you put into it.
The CPF Deduction Trap
MAS rules require the CPF Ordinary Account amount used on the property, meaning principal plus accrued interest, to be subtracted from the maximum loan available. CPF is retirement savings, and the government limits how much of it you can convert back into liquid cash through property financing.
This is where people get caught. A property heavily funded by CPF gives you far less cash-out headroom than one funded by cash, even at the same valuation. CPF accrued interest also compounds at 2.5% per annum monthly, so the deduction keeps growing. The longer you have held the property using CPF, the smaller your cash-out room becomes. Our CPF accrued interest guide covers the compounding math. The same accrued figure that hits you on sale also caps your cash-out today.
TDSR and the 50% Threshold Exemption
The cash-out raises your total borrowing on the property, so the 55% Total Debt Servicing Ratio is re-tested on the combined loan, and at the MAS 4% medium-term stress floor, not today's rate. For borrowers who are asset-rich but income-light (retirees, business owners with lumpy income), this is usually what stops them.
There is one important exemption. If your total borrowing is 50% or less of the property's value, TDSR does not apply. That makes the 50%-of-value line worth planning around. Someone who would fail TDSR on a 65% cash-out can still extract cash up to the 50% mark without the income test. You get less cash, but for those who cannot pass TDSR, it is the only way through.
Worked Example: S$2M Condo
Inputs
A Singapore Citizen owns a private condo, current valuation S$2,000,000. Outstanding loan S$600,000. CPF Ordinary Account used to date (principal + accrued interest) S$400,000. No other outstanding housing loan.
Computation
| Item | Calculation | Amount |
|---|---|---|
| Current valuation | — | S$2,000,000 |
| 75% LTV cap | 75% × 2,000,000 | S$1,500,000 |
| Less: outstanding loan | — | (S$600,000) |
| Less: CPF used (principal + accrued) | — | (S$400,000) |
| Maximum cash-out (MWL) | 1.5M − 600K − 400K | S$500,000 |
| New total loan (refi + cash-out) | 600,000 + 500,000 | S$1,100,000 |
| TDSR check at 4% stress over 25y | PMT(1,100,000; 4%/12; 300mo) | ~S$5,807/mo |
| Income to clear 55% TDSR | 5,807 ÷ 0.55 | ~S$10,560/mo gross |
The owner pulls out S$500,000 in cash at ordinary home-loan pricing (fixed ~1.4% p.a. in 2026). To get it, they have to clear the 55% TDSR on the combined S$1.1M loan, which needs roughly S$10,560/month in gross income before existing debts. If income falls short, dropping the cash-out so the total loan is ≤ 50% of value (S$1M total, i.e. S$400K cash-out) takes the TDSR test off the table entirely.
Smart Uses (and What's Off-Limits)
Cash-out proceeds can be used for almost any purpose. Common ones:
- Business capital. It is cheaper than SME unsecured loans and a frequent use for owner-operators.
- Renovation or A&A works on the same or another property.
- Investment, putting the equity into higher-yielding assets, with the obvious leverage risk attached.
- Debt consolidation, rolling high-interest unsecured debt into a secured loan at ~1.4% home-loan pricing.
- Education, medical bills, or other life events.
What is off-limits or restricted:
- Using the cash to fund the down payment on another residential property to sidestep ABSD. Banks and IRAS look closely at this. For the legitimate second-property route, see our decoupling guide.
- Cashing out CPF. It cannot happen, because CPF used is deducted from the MWL in the first place.
Commercial Property Cash-Out: A Different (and Often Cheaper) Set of Rules
Everything above applies to residential cash-out. Commercial and industrial property follows different rules, and for business owners it is often the cheaper option. The MAS residential LTV caps of 75% and 45% do not apply. There is no CPF deduction, since CPF cannot fund commercial property in the first place. And where the facility is taken by the operating company rather than an individual, the personal 55% TDSR gives way to an assessment of the business financials. So the achievable LTV is higher and, for strong borrowers, the pricing is sharper. For the full picture see our commercial property loan service and the 2026 commercial property loan rates & eligibility guide.
Live case: S$4M equipment, two routes
A business owner needed S$4 million to fund equipment for a new project. Two financing routes were on the table (client and figures anonymised; rates as quoted in 2026):
| Factor | Option 1 — Private-property term loan | Option 2 — Commercial ETL |
|---|---|---|
| Security | Personal private property | Fully-paid commercial property (val. S$5.5M) |
| Max LTV available | 75% (MAS residential cap) | Up to ~90% (commercial, credit-driven) |
| Headroom vs S$4M need | Tight — net of existing loan / CPF | ~S$4.95M available; S$4M draw ≈ 73% |
| Rate | 1.4% fixed | 1.08% yr 1 / 1.28% yr 2 (promo) |
| CPF deduction | Applies if CPF used | None |
| Income test | Personal 55% TDSR | Business financials |
| Client decision | — | Chosen ✓ |
The client chose Option 2. The commercial equity term loan drew on a fully-paid asset the business already owned, priced roughly 30–50 bps cheaper in the early years, and left the owner's private property completely unencumbered as a separate reserve. That last point mattered to them. Because the commercial property carried no CPF history, the full valuation-based headroom was available with nothing to deduct. On a S$5.5M valuation the ~90% ceiling gave close to S$4.95M of room, so the S$4M draw sat at a comfortable ~73% LTV rather than maxing out the facility.
A few caveats before you assume you'd get the same:
- The headline ~90% LTV and sub-1.3% pricing are not universal. They reflect a strong, fully-paid asset and a creditworthy business borrower. Many commercial cash-outs land closer to 70–80%.
- The promotional rate reprices after year 2, so model the post-promo rate and not just the teaser.
- Both routes here were quoted on promotional fixed packages, which in 2026 can sit below the SORA-floating cash-out range noted below.
- Commercial facilities are underwritten case-by-case on property type, tenure, business financials and banking relationship.
The point holds whatever the exact numbers turn out to be. Do not assume the residential 75% cap and 2%+ rates apply to a commercial-secured facility. They often do not, and for an asset-holding business the commercial premises is frequently the cheapest thing on the balance sheet to borrow against.
2026 Cash-Out Rates
A residential cash-out refinance is priced exactly like an ordinary home loan. The cash-out portion rides the same fixed or SORA-pegged package the bank would offer on a plain refinance, with no “term-loan premium”. In 2026 that means roughly 1.4% p.a. on a fixed package, or a SORA-pegged rate (1M / 3M SORA + spread) working out to around 1.1%–1.6% in the first year, depending on bank, loan quantum and tenure. Rates move with the SORA cycle, so there is a live comparison on our current rates page. To weigh up the package options, see our when-to-refinance guide.
Three Moves Before You Apply
- Get a current valuation. The MWL keys off today's market value, not your purchase price, so order an indicative valuation before you assume a cash-out figure. A property that has appreciated 40% gives you a lot more headroom.
- Pull your CPF Property Withdrawal Statement. The CPF principal plus accrued interest used is a direct deduction from your cash-out, and most owners underestimate it. Check the real number before you model anything.
- Decide between TDSR and the 50% threshold. If your income clears the 55% TDSR on the combined loan, take the full MWL. If not, size the cash-out so the total loan is ≤ 50% of value and skip the income test. Run both via our affordability calculator.
- Get the full report. The Singapore Mortgage Free Report bundles your funds-position card (including CPF used vs available), the TDSR/MSR check at the MAS 4% stress floor, a 16-bank rate comparison and the refinance-savings comparison. Those are the numbers that decide your cash-out headroom.
Frequently Asked Questions
Cash-out refinancing (also called an equity term loan or home equity loan) lets you borrow against the appreciated value of a property you already own, taking the difference between the current valuation and your outstanding loan as cash. It is structured as a term loan secured on the property. The proceeds can be used for almost any purpose — business capital, renovation, investment, education or debt consolidation — except to fund the purchase of another residential property to circumvent ABSD.
No. HDB flats are not eligible for cash-out refinancing. Only private residential property (condominiums, landed) and Executive Condominiums that have completed their 5-year Minimum Occupation Period qualify. HDB owners seeking liquidity must look at other options — the HDB flat itself cannot be used to extract equity as cash.
The Maximum Withdrawable Loan (MWL) formula is: 75% of current valuation (or 45% if you have one or more other outstanding housing loans), less your outstanding loan on the property, less the CPF principal plus accrued interest used on the property. For example, on a S$2,000,000 condo with a S$600,000 outstanding loan and S$400,000 of CPF used: 75% x 2,000,000 = 1,500,000; minus 600,000 minus 400,000 = S$500,000 cash available.
MAS rules require the CPF Ordinary Account amount used on the property (principal plus accrued interest) to be subtracted from the maximum loan available. CPF funds are designated retirement savings, and the government restricts their conversion back into liquid cash through property financing. This means a property heavily funded by CPF yields less cash-out headroom than one funded by cash, even at the same valuation.
Yes, the 55% Total Debt Servicing Ratio applies to the total loan after the cash-out — and is stress-tested at the MAS 4% medium-term floor. There is one exemption: if you borrow 50% or less of the property's value in total, TDSR does not apply. This makes the 50% threshold an important planning line for borrowers who would otherwise fail TDSR on the larger combined loan.
A residential cash-out refinance is priced like an ordinary home loan — the cash-out portion rides the same fixed or SORA-pegged package as a plain refinance, with no term-loan premium. In 2026 that means roughly 1.4% per annum on a fixed package, or a SORA-pegged rate (1-month or 3-month SORA plus a spread) of around 1.1% to 1.6% in the first year, depending on bank, loan quantum and tenure. Rates change frequently with the SORA cycle — an independent broker benchmarks the live spread across 16+ MAS-regulated banks before submission.
Yes, and the rules differ from residential cash-out. Commercial and industrial property is not bound by the MAS residential LTV caps of 75%/45%, there is no CPF deduction (CPF cannot be used for commercial property), and where the facility is taken by the operating company rather than an individual, the personal 55% TDSR is replaced by an assessment of business financials. Achievable LTV can therefore be higher — in some cases up to around 90% for a strong, fully-paid asset and a creditworthy borrower — and pricing can undercut residential cash-out rates. Terms are underwritten case-by-case on property type, tenure and business financials.
Free Cash-Out Feasibility Check
Nexus Mortgage SG runs the MWL formula, the CPF deduction, the TDSR test and the 50%-threshold comparison across 16+ MAS-regulated banks. Zero cost to the borrower.
Run My Cash-Out Numbers →Prefer a personal review? WhatsApp Dan Ler at +65 8752 0859 for a free portfolio assessment. Banks pay our fee — you pay nothing.
Or download the full playbook: Singapore Mortgage Free Report — funds position (cash + CPF used vs available), TDSR/MSR worksheet, 16-bank rate comparison and refinance-savings comparison in one PDF.
About the author — Dan Ler has advised on Singapore home loans since 2017 at Nexus Mortgage SG, an independent brokerage comparing 16+ MAS-regulated lenders. Nexus has facilitated 500+ home loans across HDB, EC, private condo and landed property segments. Banks pay Nexus on disbursement, so there is no cost to the borrower.
Nexus Mortgage SG is an independent Singapore mortgage advisory. This article is general information, not financial advice. Cash-out refinancing eligibility, LTV limits and the CPF deduction are governed by MAS regulations and individual bank policy; figures are illustrative and reflect MAS positions and indicative 2026 bank pricing as of 30 May 2026. The commercial case study is anonymised and its rates and 90% LTV are deal-specific, not a general offer. Rates and rules can change. Always confirm your specific cash-out headroom with an independent mortgage advisor and your bank. Sources: MAS Notice 645 (TDSR), CPF Using Your CPF to Buy a Home, MAS TDSR explainer.