Can I transfer my home loan to another person?

Transferring a home loan to another person is possible in Singapore but involves a formal process and requires the bank's approval. The scenarios in which this typically occurs include divorce, death of a co-borrower, change of ownership due to family restructuring, or decoupling (where one co-owner transfers their share to the other to allow the exiting owner to purchase another property without incurring ABSD).

When you request a loan transfer, the bank treats it as a new loan application for the incoming borrower. The new borrower must independently qualify for the mortgage, meeting the bank's credit criteria, income requirements, and TDSR limits. The bank will conduct a fresh assessment and may request updated documentation including income proof, credit reports, and a new property valuation.

For HDB flats, the transfer must also comply with HDB's eligibility rules. The incoming owner must meet the citizenship and income requirements, and the change of ownership must be applied for and approved through HDB. Common scenarios include the transfer from joint owners to a single owner such as after a divorce, or the inclusion of a new co-owner.

Stamp duties apply to ownership transfers. BSD is payable on the higher of the consideration paid or the market value of the share being transferred. ABSD may also apply depending on the citizenship status and existing property holdings of the incoming owner.

If the transfer is due to divorce, the court order typically specifies how the property and mortgage are to be divided. The bank must still approve the transfer, and the remaining borrower must qualify for the loan independently.

In the event of a borrower's death, the surviving co-borrower typically takes over the mortgage obligation. If mortgage insurance such as HPS or Mortgage Reducing Term Assurance (MRTA), a decreasing term life policy tied to the outstanding loan balance, is in place, the insurance payout may partially or fully settle the outstanding loan.

The process of transferring a loan is more complex and costly than it might initially appear, involving legal fees, stamp duties, bank approval, and potentially HDB consent. Professional guidance from a lawyer and mortgage advisor is strongly recommended.

Cashew can help coordinate the various parties involved in a loan transfer and ensure the new mortgage arrangement is structured optimally.