# In-Principle Approval (IPA)

- Topic: Financing & loans
- Last updated: 6 Nov 2026
- Fact-checked against official government sources: 6 Nov 2026
- Canonical URL: https://propertymeter.sg/glossary/ipa/

## What is IPA (In-Principle Approval)?

An In-Principle Approval (IPA) is a bank's early, indicative assessment of how much it may lend you for a home, given before you commit to a purchase. It is not a final loan offer. The binding offer comes later in the bank's Letter of Offer, which HDB resale buyers using a bank loan must have before they exercise the Option to Purchase.

## Key facts

- **What it is:** A bank's indicative assessment of your loan amount
- **Binding?:** No; the final terms are in the bank's Letter of Offer
- **HDB buyers:** Can request an IPA from participating banks when applying for the HFE letter
- **HDB resale with a bank loan:** The Letter of Offer must be dated on or before the day you exercise the OTP
- **Get it:** Before you pay an option fee

## How an IPA works

1. **Apply to one or more banks** with your income, debts and the property type you have in mind.
2. **The bank assesses you** against the [loan-to-value limit](https://propertymeter.sg/glossary/ltv/) and debt ratios such as [TDSR](https://propertymeter.sg/glossary/tdsr/) and, for HDB flats and new ECs, the MSR.
3. **You receive the IPA**, showing roughly how much you may borrow.
4. **You find a property** and get an [Option to Purchase](https://propertymeter.sg/glossary/otp/).
5. **The bank values the property** and issues a Letter of Offer with the final terms.

| | In-Principle Approval | Letter of Offer |
| --- | --- | --- |
| When | Before you commit to a property | After you have chosen a property |
| What it gives | An indicative loan amount | The formal loan offer and terms |

## Example

You plan to buy an HDB resale flat with a bank loan. When you apply for your HFE letter, you also request IPAs from two banks. Both indicate you can borrow about $450,000. You find a flat, the seller grants the OTP, and your chosen bank values the flat and issues a Letter of Offer. You exercise the OTP only after the Letter of Offer is dated, as HDB requires.

## Common mistakes

- **Paying an option fee before getting an IPA.** If you can't borrow enough, you may lose the fee.
- **Treating the IPA as final.** The bank's valuation and checks can change the amount.
- **Letting your situation change.** A new loan or a drop in income before the Letter of Offer can reduce what you can borrow.

## Frequently asked questions

### Is an IPA a guarantee that I'll get the loan?

No. It is an early indication based on the information you give. The bank confirms the loan, after its valuation and final checks, in the Letter of Offer.

### Do I need an IPA to buy an HDB flat?

Only if you plan to take a bank loan. You can request an IPA from one or more participating financial institutions at the same time as your HFE letter application on the HDB Flat Portal.

### What is the difference between an IPA and a Letter of Offer?

The IPA tells you roughly how much you may borrow. The Letter of Offer is the bank's formal loan offer, with the rate, tenure and other terms, which you accept to take up the loan.

## Sources

1. [Application for an HDB Flat Eligibility (HFE) letter](https://www.hdb.gov.sg/buying-a-flat/flat-grant-and-loan-eligibility/application-for-an-hdb-flat-eligibility-hfe-letter) (HDB)
2. [Option to Purchase when buying a resale flat](https://www.hdb.gov.sg/buying-a-flat/resale-flats/process-for-buying-a-resale-flat/option-to-purchase) (HDB)
3. [Response to feedback on proposed amendments to notices on residential property loans fact sheet (December 2022)](https://www.mas.gov.sg/-/media/mas/news-and-publications/consultation-papers/2021-consultation-paper-on-fact-sheet-amendments/final-publication-proposed-amendments-to-notices-on-residential-property-loans-fact-sheet.pdf) (MAS)

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Source: PropertyMeter (https://propertymeter.sg/glossary/ipa/). General information only, not financial, legal or tax advice.