What happens to your loan when there is a change in property ownership

How your loan is affected when


Step 1

Find out about the process and costs.

Consult your lawyer

Get advice from your lawyer on the following processes:

  • Transfer of share, through selling of property share to the remaining owner*
  • What you need to do if you have used CPF funds to pay for the property
*OCBC cannot provide financing to the remaining owner if the property share is transferred as a gift.

Get advice from your lawyer on the following processes:

  • Transfer of share, through selling of property share to the remaining owner*
  • What you need to do if you have used CPF funds to pay for the property
*OCBC cannot provide financing to the remaining owner if the property share is transferred as a gift.

Consider the costs

There are other costs that you may incur, such as:

  • Stamp duty on the sale of your share of the property
  • Legal fee for the sale of your property
  • Legal fee for conveyancing work on the new loan for the remaining owner
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

There are other costs that you may incur, such as:

  • Stamp duty on the sale of your share of the property
  • Legal fee for the sale of your property
  • Legal fee for conveyancing work on the new loan for the remaining owner
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

Step 2

Understand the changes to your loan.

Closure of loan account

The existing loan account will be closed as the loan cannot continue with a change in owner and borrower.
Fees involved in closing the account may include:

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

The existing loan account will be closed as the loan cannot continue with a change in owner and borrower.
Fees involved in closing the account may include:

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

Higher loan amount

The new loan amount for the remaining owner will be a higher amount as he/she will be taking over the former owner’s portion.
The new loan amount will consist of 2 parts:

  • The remaining owner’s portion of the loan
  • The additional amount that can be loaned after taking over the former owner’s share, subject to the applicable loan-to-value ratio
The new loan amount will depend on regulations on the loan amount, loan tenure, total debt servicing ratio and OCBC’s guidelines.

The new loan amount for the remaining owner will be a higher amount as he/she will be taking over the former owner’s portion.
The new loan amount will consist of 2 parts:

  • The remaining owner’s portion of the loan
  • The additional amount that can be loaned after taking over the former owner’s share, subject to the applicable loan-to-value ratio
The new loan amount will depend on regulations on the loan amount, loan tenure, total debt servicing ratio and OCBC’s guidelines.

Here is an illustration of the new loan amount for the remaining owner when the former owner sells his/her share.

The calculations are based on the property having 2 owners.

Outstanding loan amount for both owners

S$400,000

Each borrower holds a 50% share of the property and loan

Outstanding loan amount for the remaining owner

S$200,000

Current market value of the property

S$1,000,000

Purchase price for the former owner's share of the property

50%

Based on the former owner’s share of the property

×

S$1,000,000

Current market value of the property

=

S$500,000

Current market value of the former owner's share of the property

Additional loan amount to purchase the former owner's share of the property

75%

Maximum loan-to-value ratio if remaining owner does not have other home loans in Singapore


The remaining owner will have to pay the remaining 25% (5% in cash and 20% in cash or CPF)

×

S$500,000

Current market value of the former owner's share of the property

=

S$375,000

Maximum additional loan

New loan amount for the remaining owner

S$200,000

Outstanding loan amount for the remaining owner

+

S$375,000

Additional loan amount to purchase the share of the property

=

S$575,000

New loan amount

Step 3

Submit the following documents to us via email.

Step 4

Accept our letter of offer so documentation can proceed.

1

Accept letter of offer

Please review and accept our letter of offer for the new loan once all the documents are submitted.

2

Appointment of solicitor

A lawyer on the bank's panel will handle legal documentation and assist you with updates to the CPF Board.

3

Valuation of property

The valuer will contact you regarding a site inspection of your property.

Fire insurance, if any, will be updated to reflect the change in property ownership.

4

Completion of documentation

The lawyer will inform us to disburse the new loan once the documentation is complete.

Step 5

Service your new loan account.

1

New loan account

A new loan account will be opened and your previous loan account will be closed.

2

Make loan payments

Start making instalment payments based on the information we have given you.

3

Update payment details

Update your payment details with CPF if you are utilising CPF funds to make monthly instalment payments.

Step 1

Find out about the process and costs.

Consult your lawyer

Get advice from your lawyer on the following processes:

  • Obtaining the Grant of Probate or Letter of Administration
  • Transfer of property share to the beneficiary
  • What to do if the deceased used CPF funds to pay for the property
Please check if there are any mortgage insurances on the property as the loan may be paid off by the insurer.

Get advice from your lawyer on the following processes:

  • Obtaining the Grant of Probate or Letter of Administration
  • Transfer of property share to the beneficiary
  • What to do if the deceased used CPF funds to pay for the property
Please check if there are any mortgage insurances on the property as the loan may be paid off by the insurer.

Consider the costs

There are other costs that you may incur, such as:

  • Legal fee for conveyancing work on the new loan
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

There are other costs that you may incur, such as:

  • Legal fee for conveyancing work on the new loan
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

Step 2

Understand the changes to your loan.

Closure of loan account (For Tenancy In Common)

  • If the property is held under Tenancy in Common, the deceased owner’s share will go to the beneficiary and the existing loan account will be closed
  • The beneficiary can apply for a new loan account with the surviving owner if he/she is at least 21 years old

  • If the property is held under Tenancy in Common, the deceased owner’s share will go to the beneficiary and the existing loan account will be closed
  • The beneficiary can apply for a new loan account with the surviving owner if he/she is at least 21 years old

Maintain existing loan amount

  • If the property is held under Joint Tenancy, the deceased owner’s share of the property will go to the surviving owner.
  • The surviving owner can continue to be the borrower and maintain the existing loan account.

  • If the property is held under Joint Tenancy, the deceased owner’s share of the property will go to the surviving owner.
  • The surviving owner can continue to be the borrower and maintain the existing loan account.

Here are two illustrations of how the property loan may change when one owner (B) passes away.

Tenancy In Common: The deceased owner's share of the property is distributed to the beneficiary

Loan amount:
S$200,000

Owners: A + B
Borrowers: A + B
B’s share is distributed to C

The new loan amount will depend on regulations on the loan amount, loan tenure, total debt servicing ratio and OCBC's guidelines.

Owners: A + C
Borrowers: A + C

Joint Tenancy: The deceased owner's share of the property is transferred to the surviving owner

Loan amount:
S$200,000

Owners: A + B
Borrowers: A + B

Loan amount: S$200,000

Owner: A
Borrower: A

Step 3

Submit the following documents to us via email. (For Tenancy In Common)

Step 4

Accept our letter of offer so documentation can proceed.
(For Tenancy In Common)

1

Accept letter of offer

Please review and accept our letter of offer for the new loan once all the documents are submitted.

2

Appointment of solicitor

A lawyer on the bank's panel will handle legal documentation and assist you with updates to the CPF Board.

3

Valuation of property

The valuer will contact you regarding a site inspection of your property.

Fire insurance, if any, will be updated to reflect the change in property ownership.

4

Completion of documentation

The lawyer will inform us to disburse the new loan once the documentation is complete.

Step 5

Service your new loan account.
(For Tenancy In Common)

1

New loan amount

A new loan account will be opened and your previous loan account will be closed.

2

Make loan payments

Start making instalment payments based on the information we have given you.

3

Update payment details

Update your payment details with CPF if you are utilising CPF funds to make monthly instalment payments.

Step 1

Find out about the process and costs.

Consult your lawyer

Get advice from your lawyer on the following processes:

  • Transfer of property in the event of divorce
  • Obtaining Court Order / Syariah Court Order and Final Judgement
  • What you need to do if CPF funds were used to pay for the property

Get advice from your lawyer on the following processes:

  • Transfer of property in the event of divorce
  • Obtaining Court Order / Syariah Court Order and Final Judgement
  • What you need to do if CPF funds were used to pay for the property

Consider the costs

There are other costs that you may incur, such as:

  • Legal fee for conveyancing work on the new loan
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

There are other costs that you may incur, such as:

  • Legal fee for conveyancing work on the new loan
  • Valuation fee for the property
  • Prepayment fee (if any) and other penalties on the existing loan on the property

Step 2

Understand the changes to your loan.

Closure of loan account

The existing loan account will be closed as the loan cannot continue with a change in owner and borrower.

Fees in involved in closing the account may include:

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

The existing loan account will be closed as the loan cannot continue with a change in owner and borrower.

Fees in involved in closing the account may include:

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

Higher loan amount

The new loan amount for the remaining owner will be a higher amount as he/she will be taking over the former spouse’s portion.

The new loan amount will consist of 2 parts:

  • The outstanding loan amount
  • An additional amount to refund any CPF funds used by the former spouse to pay for the property
The new loan amount will depend on OCBC’s assessment of affordability, the maximum loan-to-value ratio (total loan amount cannot exceed 80% of the property’s current market value) and other assessment criteria.

The new loan amount for the remaining owner will be a higher amount as he/she will be taking over the former spouse’s portion.

The new loan amount will consist of 2 parts:

  • The outstanding loan amount
  • An additional amount to refund any CPF funds used by the former spouse to pay for the property
The new loan amount will depend on OCBC’s assessment of affordability, the maximum loan-to-value ratio (total loan amount cannot exceed 80% of the property’s current market value) and other assessment criteria.

Here is an illustration of the new loan amount when the property share is transferred to the remaining owner.

The calculations are based on taking over the former spouse’s 50% share of the property.

Outstanding loan amount for both owners

S$400,000

CPF funds used by the former spouse

S$200,000

Current market value of the property

S$1,000,000

New loan amount for the remaining owner

S$400,000

Outstanding loan amount for the remaining owner

+

S$200,000

Additional loan amount to refund CPF funds used

=

S$600,000

The loan amount is subject to the loan-to-value ratio not exceeding 80% and other guidelines.

If the additional loan is not sufficient to refund the CPF funds used by the former spouse, the remaining owner must refund the balance in cash.

Step 3

Submit the following documents to us via email.

Step 4

Accept our letter of offer so documentation can proceed.

1

Accept letter of offer

Please review and accept our letter of offer for the new loan once all the documents are submitted.

2

Appointment of solicitor

A lawyer on the bank's panel will handle legal documentation and assist you with updates to the CPF Board.

3

Valuation of property

The valuer will contact you regarding a site inspection of your property.

Fire insurance, if any, will be updated to reflect the change in property ownership.

4

Completion of documentation

The lawyer will inform us to disburse the new loan once the documentation is complete.

Step 5

Service your new loan account.

1

New loan account

A new loan account will be opened and your previous loan account will be closed.

2

Make loan payments

Start making instalment payments based on the information we have given you.

3

Update payment details

Update your payment details with CPF if you are utilising CPF funds to make monthly instalment payments.

How to apply?

Contact us for your change in property ownership.

FAQs
Common questions
How long will OCBC Bank take to review my request?

We need 2 to 3 weeks to process the new loan for the remaining owner after receiving all the documents.  

What are some of the penalties and fees when my existing loan account is closed?

Penalties and fees generally include 

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

Please refer to your Letter of Offer for more details.

What will be the interest rate for my new loan account?

It will follow prevailing interest rates as published on ocbc.com/homeloans

What happens to the additional loan granted to the remaining owner? 

The additional loan will be disbursed to pay off the former owner’s share of the loan and to refund any CPF funds used to pay for the property. Any remainder will be received in cash.

FAQs
Common questions
How long will OCBC Bank take to review my request?

We need 2 to 3 weeks to process the new loan when the deceased’s property share is distributed to a beneficiary.

What are some of the penalties and fees when my existing loan account is closed?

Penalties and fees generally include 

    • Prepayment penalty if the loan is still within the ‘lock-in’ period
    • Cancellation fee on undisbursed loan amount
    • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

Please refer to your Letter of Offer for more details.

What will be the interest rate for my new loan account?

It will follow prevailing interest rates as published on ocbc.com/homeloans

Can the beneficiary of the property become a borrower? 

In the event that an owner passes away and the beneficiary wants to be a joint borrower with the surviving owner/borrower, OCBC will assess this as a new loan.  

The new loan amount will depend on regulations on loan amount, loan tenure, total debt servicing ratio and OCBC’s guidelines.  We are unable to provide financing if the property share is transferred as a gift, or if the property is held under a trust. 

FAQs
Common questions
How long will OCBC Bank take to review my request?

We need 2 to 3 weeks to process the new loan for the remaining owner after receiving all the documents.  

What are some of the penalties and fees when my existing loan account is closed?

Penalties and fees generally include 

  • Prepayment penalty if the loan is still within the ‘lock-in’ period
  • Cancellation fee on undisbursed loan amount
  • Fee for not redeeming the loan on rate review date (for SIBOR and foreign currency loans)

Please refer to your Letter of Offer for more details.

What will be the interest rate for my new loan account?

It will follow prevailing interest rates as published on ocbc.com/homeloans

How much additional financing can you grant to refund the CPF funds used?

The new loan amount depends on OCBC’s assessment of affordability, maximum loan-to-value ratio of 80% (total loan amount cannot exceed 80% of the property’s current market value) and other assessment criteria. If the additional loan is not sufficient to refund the CPF funds used by your former spouse, you will have to refund the balance in cash.