Why Singapore mortgages?
The case for Singapore residential mortgages
Singapore: A Pillar of Stability
Singapore residential property is widely regarded as a safe store of value. Property prices have been a good proxy of Singapore's growth and stability, growing in line with GDP for the past two decades.
Singapore's legal and regulatory framework for property ownership is robust, with property transactions transparent and made available publicly.
The government takes active measures to ensure the sustainability of property prices, including land sales, cooling measures, and conservative lending limits.
Mortgages: A Safer Way to Invest
Mortgages can be duly registered with the Singapore Land Authority (SLA) as the first charge on the underlying property. This means that investors always get repaid before all non-government claims.
Mortgage funds can set conservative loan-to-value (LTV) ratios. This helps ensure that every dollar invested is backed by significantly more than its value in residential property.
Safety Margin
Loan Amount up to 75% LTV
Property Value: $4 million
Loan-to-Value (LTV): 75%
How mortgage funds compare
| Investment Option | Return (p.a.) | Liquidity | Security |
|---|---|---|---|
| 1-Year Fixed Deposits | 2.45%1 | 1-Year Fixed | SDIC Insured up to S$100,000 |
| High Interest Savings | 3.30%2 , if requirements are met, subject to change | Highly liquid | SDIC Insured up to S$100,000 |
| Money Market / Bond Funds | 3.42%3 | Highly liquid | No direct property / asset security |
| REITs | 6.46% Dividend Yield4 -6.06% Total Return4 | Highly liquid for publicly listed REITs | Owns real estate but subject to value fluctuation |
| Residential Mortgage Funds | Generally higher than fixed deposits, bond funds, and money market | Varied. Regular redemption windows are typical | Full amount backed by residential mortgages |
2 UOB One Account, for first $150,000, as of 7 May 2025
3 LionGlobal SGD Money Market Fund, 1-year performance as of 31 Mar 2025
4 Morningstar SG REIT Yield Focus Index, full year 2024
LXA and LXA Group are brands of LXA Capital, which is the licensed entity.
