How Much Renovation Loan Can I Get In Singapore?

October 3, 2023

After a long, hard day at work, can you imagine coming home to a tastefully decorated abode – done just the way you like it?

These days, homeowners like yourself love having some creative control over their homes. They willingly pay to add aesthetic value to their HDB flat or private property.

However, it’s a different story if you have a cashflow problem that makes covering all the renovation costs challenging, especially if you have prior financial commitments. This is when getting a home loan for renovation becomes essential.

You may be asking “how much renovation loan can I get?” The amount you can borrow depends on several factors, such as the extent of renovation you require.

Here is a guide to help you understand how a reno loan works, how to find a home loan for renovation, how much you can borrow, and more.

How Do Home Renovation Loans Work In Singapore?

A renovation loan helps you renovate your home. It usually has a lower effective interest rate (EIR) than a personal loan.

When you qualify for a home loan for renovation, the lender doesn’t disburse it into your account. Instead, it will go directly to your contractor or interior designer.

There may also be site visits conducted by the lender to ensure that the loan is not being used for other purposes. For more details, check out our guide.

What Can Renovation Loans Be Used For?

Before you ask your financial advisor “how much renovation can I get?”, you should first understand how you can use this loan.

You can cover the cost of the following:

  • Painting
  • Decorating
  • Flooring and tiling
  • Electrical and wiring work
  • Built-in cabinets and other carpentry work
  • Bathroom fittings
  • External works within your home compound (e.g. your balcony)

What Should You Look Out For In A Renovation Loan?

When comparing home renovation loans from different lenders, look for the following:

Interest rate: The interest rate for a renovation loan varies from one lender to the other. You should shop around and compare loan offers before you decide which loan to go for. This will help you to get the best reno loan.

Fees and charges: When taking out a loan, there will be fees involved, such as the processing fee, which is 1% of the approved loan amount. You can also be charged for late payment or early payment. Be aware of such fees before you sign the loan contract.

Maximum loan amount: How much can you borrow to renovate your home? Consider if the maximum amount will cover the renovation work you need.

Ongoing promotions: A renovation loan with a promotion can help you pay significantly less.

How Much Do Home Renovations Cost?

When you want to renovate your home, it is crucial to determine how much you will need before the project commences.

Generally, it can cost you $20,000 to $70,000, depending on several factors. They include:

Project Size And Type

Do you want to renovate your entire home or just the flooring or the balcony? The larger the space you want to remodel, the higher the cost.

Also, are you renovating a buy-to-sell or a home you want to live in for good? If you want to renovate a home that you will sell, you shouldn’t spend a lot on it.

However, if it is your forever home, you can consider paying more since you’ll be living there for your lifetime.

Materials To Use

The cost of materials used in renovation heavily influences the total cost. You can compare the prices of affordable and premium materials from various suppliers to get the best deal.

Contractors And Designers Involved

As you ask “how much renovation loan can I get?”, you should consider the designers and contractors you will use. Their prices vary depending on their level of expertise.

Renovation Work Required

Some tasks can be more costly than others. Renovation work, such as designing and implementing a design, requires more personnel, which is more expensive.

Current Condition Of Your Home

A HDB flat in good condition will need less renovation. This lowers the cost as compared to one in a bad state.

How Much Renovation Loan Can I Get?

After knowing the cost of your home renovation, you can ask yourself “how much renovation loan can I get?”

The maximum renovation loan for a HDB that you can get in Singapore is $30,000 or six times your monthly salary, whichever is lower.

What if you need more than this amount for your renovation cost? You can take out two renovation home loans or apply for a renovation and a personal loan.

However, you should be willing and able to commit to paying the monthly installments for both loans.

Before considering multiple loans, it’s crucial to check your Total Debt Servicing Ratio (TDSR).

The TDSR is the percentage of your income that goes towards servicing all your debts, and there’s usually a cap set by financial institutions.

In Singapore, your TDSR, including your renovation loan, should not exceed 55% of your monthly income.

This ratio helps you determine how much debt you can commit to service per month, ensuring that you don’t overextend yourself financially.

Best Renovation Loans In Singapore (2023)

Are you looking for the best renovation loan?

Here is a table of the best renovation loans in Singapore from different lenders that you can consider:

Interest rateLoan AmountLoan Tenure
CIMB Renovation Loan4.65% (EIR 5.29%)Up to $30,000 or 6x your monthly salary, whichever is lowerOne to five years
DBS Renovation Loan4.68% (EIR 5.41%)Up to $30,000 or 6x your monthly income, whichever is lowerOne to five years
OCBC Renovation Loan4.98% (EIR 5.6%)Up to $30,000 or 6x your monthly salary, whichever is lowerOne to five years
Maybank Home Renovation LoanExisting Home Loan Customers 4.08%
New Customers 6.53% - 6.93%
Up to $30,000 or 6x your monthly income, whichever is lowerOne to five years
Licensed Money Lenders1-4% monthly interest rateUp to $30,000 or 6x your monthly incomes, whichever is lowerSix to 12 months

Note: All rates are current as of July 9, 2023, and are subject to change. Please contact the relevant financial institutions for the most up-to-date information.

CPF and Renovation Loans

Inability to Use Central Provident Fund (CPF) for Repaying Renovation Loans

In Singapore, you cannot use your CPF to repay renovation loans. CPF can be used for purchasing the property itself but not for any subsequent renovations.

Alternative Uses of CPF

CPF can be used for other purposes like retirement savings, healthcare, and education, which can indirectly free up cash for your renovation.

To Take or Not to Take a Home Reno Loan

Arguments For and Against Taking a Renovation Loan

Taking a loan can help you complete your renovation project sooner, but it also means taking on debt. Consider the current market interest rates and your financial stability before making a decision.

Building Your Dream Home

Conversations to Have with Your Partner

Discuss your vision for the home, your budget constraints, and your long-term plans. Make sure you’re both on the same page before embarking on this significant financial commitment.

Budgeting for Various Life Events and Costs

Remember that life is unpredictable. Budget for other significant life events like weddings, education, or potential healthcare costs when planning your renovation.

Find The Best Home Renovation Loan In Singapore

Your home often reveals your personality. Hence, living in a beautiful environment is crucial.

However, do you have the money to renovate your home? With the best renovation loans Singapore, you can transform your home to your taste.

But you could be asking “how much renovation loan can I get?” You can borrow a maximum of $30,000 or six times your monthly income, whichever is lower. However, some factors, such as the TDSR, can affect this amount.

If you’re in need of a reliable financial partner for your home renovation project and traditional bank loans aren’t an option, look no further than GS Credit, conveniently located in Chinatown.

Wondering how much you could potentially borrow for a home makeover in Singapore? At GS Credit, we aim to make your renovation journey as clear and straightforward as possible. Submit your loan application with us, and our experienced team will help you find the most suitable financial solution for your renovation needs.

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