This is largely because of BTO Apartments Recent Delays, but some buyers also associate BTOs with quality issues such as Weak soundproofing as a result of using non-concrete drywall.
However, the first step to owning a home is to pay cash for the down payment.
As you know, BTOs, resales, and ECs are priced completely differently and are subject to different rules. So find out here how much you need to save for your down payment for each type of HDB!
tl; DR: HDB advance payment for BTO, resale and EC
We’ve reduced the down payment cost chase on your first HDB apartment:
|HDB . loan||bank loan|
|HDB BTO||fifteen percent CPF or cash||Five cent cash + 20 percent CPF|
|HDB Resale||Fifteen cent CPF or cash||Five cent cash + 20 percent CPF|
|Executive Apartment||Unavailable||Five cent cash + 20 percent CPF|
All you have to do is double the percentage in the purchase price. For example, for an apartment of 400,000 BTO:
- If you take out a SCB loan, your down payment will be $60,000 (15 percent) into the Project Finance Fund (CPF)
- If you choose to take out a bank loan, your down payment will be $20,000 (five percent) in cash + $100,000 (20 percent) in CPF
Why are there two different types of payments made through HDB?
The down payment largely depends on the type of loan you get: a savings bank loan or a bank loan.
Most Singaporeans go for a savings bank loan because you can borrow 85 percent of the fixed rate, so the down payment is only 15 percent. But the interest rate is higher, at 2.6 percent.
Bank loans currently offer much lower interest rates ranging from 1.2 percent to 1.5 percent. But the down payment is much higher: 25 percent, of which at least five percent must be paid in cash.
So the basic things you need to know about HDB down payment are:
- Limit Loan to Value (LTV): The amount you can borrow from HDB (85 percent) or the bank (75 percent)
- Down Payment: The amount owed after deducting the borrowing limit, which you can use your CPF to repay in part or in full.
- Minimum cash payment: only applies if you get a bank loan
We’ll cover too Stamping fee (BSD and/or ABSD). This is a fee added to the purchase price, which you must pay in cash first and then request a refund from your CPF (so either way you’re still paying for it).
HDB Advance Payment for BTO Apartment
Picture this: you’re both a “newly” married and eager to get out of your parents’ place despite having tied the knot two years ago.
The two of you finally decided to build this beautiful three-room BTO condo in Tampines, a mature property, with easy access to amenities and attractions. It costs $400,000 – can you afford it?
Below are the down payment details for your HDB BTO Apartment:
|HDB . loan||bank loan|
|loan-to-value limit||85 percent ($360,000)||75 percent ($300,000)|
|down payment (CPF)||15 percent ($60,000)||20 percent ($100,000)|
|down payment (cash)||Without conditions||Five percent ($20,000)|
You’ll be glad to know that HDB offers an advance payment scheme. The conditions are:
- You’ve booked five rooms or a smaller apartment at any of HDB’s BTO launch
- You are married or are applying under the Fiancé / Fiancée system
- At least one of you is a first time applicant
- I applied for BTO before the youngest applicant’s 30th birthday
Under the tiered down payment system from the Savings and Credit Bank, the down payment will be divided into two parts:
|when do you pay||Bank Loan (75% Permanent Value Ratio)|
|When signing a new BTO apartment rental contract||7.5 percent ($30,000, CPF or cash)||Five percent ($20,000, cash) + five percent ($20,000, CPF or cash)|
|While receiving the keys||7.5 percent ($30,000, CPF or cash)||15 percent ($60,000, CPF or cash)|
HDB down payment for resale apartments
What if you don’t want to wait a lifetime to get a new BTO apartment? A lot of the conditions for buying a BTO apartment apply to a resale apartment as well.
For the sake of simplicity, let’s imagine buying a resale four-room apartment on a mature property like Bedok. At $600,000, it’s a lot more expensive than the BTO option, but hey, at least you can move through the year.
|HDB . loan||bank loan|
|loan-to-value limit||85 percent ($510,000)||75 percent ($450,000)|
|down payment (CPF)||15 percent ($90,000)||20 percent ($120,000)|
|down payment (cash)||Without conditions||Five percent ($30,000)|
|Stamp Duty (payable in cash, but can be paid from CPF)||
However, unlike BTO’s unfinished apartments, you will not be eligible for HDB’s Graduated Payment Scheme. This means that you will have to pay cash or money from your CPF when you sign the lease.
HDB Payment for the European Community
Executive condominiums are technically HDB apartments, but they are an entirely different animal than BTO and resale apartments.
Unlike BTO and resale apartments, you cannot apply for an HDB loan to purchase your EC. You will have to go to the bank for this, and your down payment is much higher. This process largely follows the down payment for the apartment.
This is a three-room, $1 million EC distribution in a decentralized neighborhood:
|loan-to-value limit||75 percent ($750,000)|
|down payment (CPF)||20 percent ($200,000)|
|down payment (cash)||Five percent ($50,000)|
The challenge arises from accumulating $200,000 in CPF and $50,000 in cash. The stamp fee is quite steep too, at $24,600 – and the fact that it’s payable from CPF OA means you need that amount initially.
In total, you and your spouse need at least $74,600 in your bank accounts.
Things to consider for permanent residents (PRs)
The above calculations were made with naturalized Singaporeans in mind. Singaporeans only need to pay the Buyer Stamp Duty (BSD) on their first property, so the stamp duty does not affect the down payment.
However, couples residing in PR need to pay the Additional Buyer Stamping Fee (ABSD). This is usually five percent of the property price.
If you are a PR and your spouse is a Singaporean, you do not have to pay for ABSD when making your HDB down payment.
Should I get a credit or savings bank loan?
|HDB . loan||bank loan|
|push down||15 percent (can be CPF)||25 percent (minimum five percent in cash)|
|Interest rate||2.6 percent||Currently about 1.2 per cent to 1.5 per cent|
|Does interest fluctuate?||number||Yes, every few years|
|Monthly fees||higher||Low (as long as interest rates remain low)|
|Required effort||practically nothing||You may need to refinance every two to three years|
|How is the tolerance?||more lenient||less lenient|
As you can see, your HDB down payment will vary greatly depending on whether you choose an HDB loan or a bank loan.
Cash-strapped Singaporeans will go for the ADB loan due to the much lower down payment (15 per cent). Although the interest rate is higher compared to bank loans, the rate is fixed for up to 25 years, which means there is little or no fluctuation in your monthly payments.
HDB is also more lenient in that you can choose to pay off your loan early or even switch to another provider without penalty. If you can afford the down payment, bank loans currently offer much lower interest rates than HDB.
However, these interest rates are only locked in for two to three years, which means you may need to refinance every few years to stay on top of the best interest rates. the MoneySmart Team It can help with this annoying part of the tax business.
Do I have enough money to make a down payment on HDB?
This is a question that only you can answer, but luckily for you, we have several tools for you to get you started on your first HDB advance. start with home loan tool, as well as many guides we have for you to buy your first HDB BTO flatbed, resell and EC.
While you save on HDB repayment, why not increase your savings with the best fixed deposit represent something low-risk, or choose one of the many listed lists Online brokerage For something with better returns, or do a little of both!
Failing that, find some ways to make some passive income or incentivize a high paying side business for something more urgent.
As profitable as it sounds, you probably don’t want to put your HDB down payment money into cryptocurrency. Cryptocurrency is highly volatile and can allow you to earn some extra cash quickly…but you can also lose your original capital on short notice, leaving you in a bind when you need to make that down payment.
Read more: How much do you really need to buy your first condominium in Singapore?