Lease Decay in Singapore: What Changes at 60/30 Years

Remaining lease is more than a bureaucratic number. Once a condo passes the 60-year and 30-year milestones, bank policy, CPF usage rules, and buyer psychology all shift. Interest costs change, minimum cash outlay rises, and exit timelines compress. This explainer walks through how the institutions that matter most to buyers see those milestones today. We look at loan-to-value constraints, tenure caps, CPF withdrawal limits, price trend evidence, and the practical questions you should ask before chasing a headline discount. Pair these insights with our district guide at /articles/toa-payoh-district-guide to understand how location strength can offset lease decay.

Background / Definitions

Singapore's default private leasehold tenure is 99 years. A project launches with a 99-year land lease, which counts down annually until expiry. Remaining lease (RL) refers to how many years remain before the land reverts to the state. CPF usage rules tie withdrawal eligibility to RL and the youngest buyer's age: you can use CPF savings to cover the entire purchase only if the RL covers the youngest buyer until age 95. Otherwise, CPF drawdown is prorated. Banks apply Monetary Authority of Singapore guidelines when underwriting mortgages, balancing borrower age, income, debt ratios, and RL. The frequently cited 60-year and 30-year markers are policy inflection points, not absolute bans. At RL 60, banks start tightening loan-to-value ratios and shortening loan tenures because the collateral has less time to amortise. At RL 30, mainstream banks usually step aside entirely, but some niche lenders may still participate at lower LTVs and higher interest rates. Buyers also need to remember that RL applies to the land tenure, not the internal condition of the unit: a well-maintained older condo still faces the same lease expiry as a neglected one.

Data / Evidence (with sources)

Bank product disclosures, MAS circulars, and broker compiled data align on the rule-of-thumb thresholds. When RL sits above 60 years, buyers can typically access loans with up to 75 percent LTV and tenures stretching 25 to 30 years, subject to the total debt servicing ratio (TDSR). As RL drops below 60, banks begin to cap LTV around 45 to 55 percent. Tenures step down to 20 years or less so that borrower age plus tenure does not exceed 75. Consider a 42-year-old borrower buying a unit with 58 years remaining: a 20-year tenure is the maximum, pushing the monthly instalment roughly 28 percent higher than a 30-year loan on newer stock. When RL falls under 30, mainstream banks rarely lend. Buyers must either pay in full, rely on private financiers charging 2 to 3 percentage points above bank rates, or negotiate creative arrangements such as seller financing. URA caveat analysis over the past five years shows that condos crossing below RL 60 experience a gradual widening of price spreads. Average discounts versus nearby newer projects move from 12 percent at RL 65 to around 22 percent at RL 55. Below RL 35, spreads can exceed 35 percent, and resale velocity slows, with median days on market doubling compared with stock above RL 70. Rental data paints a more nuanced picture: central locations like Toa Payoh and Tiong Bahru retain tenant demand, but landlords need to budget for higher maintenance costs, especially if mechanical and electrical systems face upgrade cycles.

Implications for Buyers

Cash planning becomes pivotal as RL shrinks. Buyers must prepare additional equity when the mortgage ceiling falls below 55 percent. CPF usage caps also force more cash outlay when RL cannot cover the youngest borrower to age 95. Upgrade timelines should be mapped carefully. If you plan to exit within ten years and RL is currently 55, the next buyer will confront sub-45-year financing scenarios, shrinking the future purchaser pool. Investors need to calibrate yields against refinancing risk. A rental yield that looks attractive on paper can evaporate if you cannot refinance an expiring loan or if capital expenditure on lift replacements, water pipe upgrades, and facade repairs accelerates. Compare sinking fund balances, recent extraordinary levies, and AGM minutes to judge whether management is proactive. Pair this chapter with the district overview at /articles to assess how location resilience might buy additional runway. Finally, stress-test your exit plan under soft market conditions: assume a longer marketing period, a 5 to 10 percent price haircut, and higher interest rates when modelling profit scenarios.

FAQ

Can I still get a bank loan under 60 years?

Yes, but expect lower leverage. Most banks cap LTV around 45 to 55 percent when RL is between 40 and 60 years, and they shorten loan tenure so the borrower age plus tenure stays within 75. Prepare to demonstrate strong income, low existing debt, and a contingency plan for rate hikes. Some lenders will also request evidence of marketability, such as recent comparable transactions.

What happens under about 30 years?

When RL drops below roughly 30 years, conventional banks generally exit. Buyers must fall back on cash, CPF usage (limited by the age rule), or private lenders that charge higher spreads. Because the buyer pool narrows significantly, resale timelines lengthen and valuations get more conservative. You should expect to negotiate harder with appraisers and be ready for larger cash top-ups if valuations fall short.

Does freehold avoid this entirely?

Freehold removes the expiry countdown, but it does not eliminate due diligence. Poor location exposure, weak management, or high maintenance fees can drag freehold returns below those of well-managed leasehold projects. Evaluate rentability, upcoming infrastructure, and comparative pricing across the same planning area before assuming freehold superiority.

Conclusion

Budget for higher cash contributions and shorter loan tenures once remaining lease slips below 60 years.
Scrutinise maintenance records, sinking funds, and upcoming capital works to avoid unexpected levies.
Map an exit window before remaining lease hits the sub-30-year zone, when mainstream financing disappears.

Explore more research at /articles and compare town profiles at /articles/toa-payoh-district-guide.