There are 3 types of situations that apply to commercial loans:
- Individual buying a commercial property
- Company buying residential property
- Company buying commercial property
Before proceeding in taking up a commercial loan, you would have to check with the bankers what type of documents would be needed to process said loan.
For most cases the interest rates and packages apply to all 3 categories and the minimum loan amount for most banks in Singapore is $100k. Generally, the Loan To Value (LTV) for own occupancy of commercial property is 80% whereas if you purchase a commercial property for investment purposes, the LTV would typically be 70%.
If you intend to sell your commercial property in a few years’ time, you might want to consider a package that does not require a long duration of lock-in period, the same applies to taking up a residential loan.
However, unlike residential loans, majority of banks’ variable rate packages for commercial property loans are pegged to their own board rate. This means that you would have to check beforehand if the respective banks’ board rates fluctuate and find out from them how often do their rates change before deciding on taking up a loan from them.
Just like rates for residential loans, rates for completed commercial properties may differ for uncompleted ones.
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