How Much Do I Have To Pay For HDB Downpayment? BTO, Resale & EC
by CashOctopus • June 30, 2022
Did you know that 81% of Singaporeans live in HDB flats?
The others live in private properties which could be condominiums or landed properties. Yes, while some might be struggling with their finances, there are Singaporeans with better properties.
For most couples in Singapore, the best way to get their first home in Singapore is to apply for a HDB BTO.
However, due to Covid 19, many BTO projects have been delayed. Previously, it took only 4-5 years for a HDB BTO to complete. Now, homeowners are expected to wait 6-7 years for their BTO to be ready.
Aside from waiting, couples need to make financial planning for home repayment as well. Are we able to afford the HDB downpayment? How much is the HDB downpayment? What about resale flat downpayment?
Furthermore, couples will need to factor in the cost of home renovations after the purchase. Getting the money for home renovations can be done here.
As you probably know, different properties have varying regulations. In this guide, we shall explore the money you need for an HDP downpayment, how to get a personal loan, and valuable details to keep in mind.
Let’s jump straight in!
How Much HDB Downpayment For BTO, Resale And EC?
The amount you need for a downpayment for BTO, resale, and EC depends on multiple factors.
– Do you have money to fund the downpayment?
– Do you have a savings plan?
– What options do you have to get a loan?
– What type of property are you purchasing? Is it a HDB, a condominium or a landed property?
– Do you need help with debt repayment?
To get down to the basics, we shall illustrate the downpayment payable for an HDB BTO, HDB resale, and Executive condo where you have a bank or HDB loan.
Here is a summary;
|Loan From Bank||HDB Loan|
|HDB Resale||5% cash payment and 20% CPF||15% Cash payment or CPF|
|HDB BTO||5% cash payment and 20% CPF||15% Cash payment or CPF|
|Executive Condo-EC||5% cash payment and 20% CPF||n/a|
HDB BTO Downpayment
To get the HDB BTO downpayment amount, you only need to have the cost of the property and multiply it with the rate.
For example, let’s assume that Mr and Mrs Leong would like to buy a HDB flat whose market value is S$500,000.
How much will the downpayment be?
Here there are two scenarios as highlighted in the table above. The first option is to get an HDB loan, and the second is to go for a bank loan.
A bank loan vs a HDB loan, which one should you and your partner consider? How much does each cost? Can you use your CPF for the downpayment?
Here is a table to summarise the total downpayment payable.
|Options||HDB loan||Bank Loan|
|Loan-to-value Limit||85% (S$425,000)||75% (S$375,000)|
|Downpayment (CPF)||15% (S$75,000)||20% (S$100,000)|
|Downpayment (Cash)||No requirement||5% (S$25,000)|
As you can see, the downpayment payable with a bank loan is higher than an HDB loan. As earlier mentioned, the amount to pay for the downpayment depends on the availability of funds and the financing option.
It means that the downpayment payable depends on the loan type which can be cash or an HDB option. Additionally, the downpayment amount is pegged at the rate of 25%. Of this amount, you must pay 5% in cash.
From this illustration, a few things stand out that you must keep in mind when choosing a favourable mortgage provider.
– The Loan-to-Value Limit, or the LTV, is 85% for HDB and 75% for banks. This is what you must borrow or have in cash to purchase the property.
The HDB introduced a set of measures on 16th December 2021, whereby the LTV ratio was adjusted to 85% for new flat applications. Subsequently, the downpayment increased to 15% from a low of 10%.
– The downpayment with an option to pay using your CPF or cash.
– The minimum cash amount in the case of bank loans.
– You’ll also need to pay statutory charges such as the Stamp Duty, currently at 4% of the property’s market value. This amount is payable in cash; however, you can claim from the CPF.
In either way, because it’s going towards payment for the property, you don’t have to get a reimbursement.
Most young Singaporeans, especially newlyweds wishing to own a home, may have little or no capital to pay for the HDB downpayment.
What Are the Advantages of a HDB Loan?
The advantage of HDB loans is that you can pay the downpayment in installments, provided you meet the following condition.
– You are a newly-married couple or want to apply under the Fiance Scheme.
– You or your spouse are first-time applicants.
– You are below 30 years old.
– You book a small unit during HDB’s flat launches or have opted for an incomplete 5-room house.
Under the staggered payment, your instalment will depend on the funding option(Bank or HDB loans).
Here is a simple illustration:
Assuming a Singaporean couple gets married and would like a favourable downpayment staggered plan to purchase a S$300,000 HDB. Two options are available, as shown in the table below;
|Options||HDB Loan||Loan from Bank|
|During application for a new BTO flat||5% (S$15,000 with CPF or Cash||5% (S$15,000, cash)+5%(S$15,000 CPF or Cash)|
|When collecting the house key||10% (S$30,000 with CPF or Cash)||15% (S$45,000 with CPF or Cash)|
What Is The HDB Downpayment For Resale Flats?
Some people may opt to purchase a resale flat instead of complying with the BTO flat ownership requirements. A resale flat may cost more than a BTO; however, you can still get a loan option from the bank or HBD.
The requirements for the downpayment are different from the BTO flat ownership.
Here is a simple example to illustrate.
Assuming Mr Tan wants to buy a three-bedroom resale flat in a mature estate area. The flat goes for S$700,000.
|HDB Facility||Loan from Bank|
|Downpayment (By CPF)||15% x 700,000=S$105,000||20% x 700,000=S$140,000|
|LTV Limit||85% x 700,000=S$595,000||75% x 700,000=S$525,000|
|Downpayment (By Cash)||Not applicable||5% x 700,000 =S$35,000|
Notably, the stamp duty depends on the following factors;
– Buying price of the house,
– Purchase type
– Type of property
– Property status
– Citizenship or permanent residency status.
Therefore, the figure in our example is just a tentative amount for illustration purposes.
The downpayment staggering option is unavailable for buyers under the resale flats option. Therefore, you must pay the full amount in cash or utilise your CPF account.
What are the Interest Rates For HDB Loan vs a Bank Loan?
The majority of Singaporean citizens prefer HDB loans, thanks to the lower downpayment amount. However, the major drawback is the interest rate which is 2.6%.p.a which most people find unfavourable.
Worth noting that this rate is higher than what banks currently offer. Most banks’ rates range between 1.2%-1.5%, with fixed rates reaching a maximum of 2.2%.
Here is a table illustrating the different interest rates for HDB and bank loans.
|HDB Loan||Bank Loan|
|Downpayment amount||15%( Either CPF or Cash)||25% with 5% Cash|
|Interest rate||2.6%||1.6% to 2.5% for fixed rates|
|Interest fluctuations||Not applicable||Interest floating|
|Monthly installments payable||High||Can be low depending on the interest rates|
|Refinancing option||Not applicable||Refinancing option available every 2-3 years|
From the illustration, the amount of HDB downpayment differs depending on the financing option. If you are on a tight budget, you can opt for an HDB loan because the downpayment is lower. However, the interest rate is higher than a bank financing option.
Another thing to note is that the interest rate is locked for a period of 25 years and doesn’t fluctuate depending on market factors.
It can be a good option if the interest rates rise, but if they fall, you may not enjoy the benefit.
As with the case of bank loans, a fall in interest rates means your repayment period will be significantly reduced. On the other hand, in an environment of high inflation and interest rates, bank loans may not be favourable.
HDB has more friendly terms for borrowers because you can repay your credit early. As well, you can choose a different provider during the loan tenure.
However, it’s important to note that bank loan interest rates are locked for 2-3 years, after which you can seek a refinancing option. Floating interest rates have their own pros and cons as well.
HDB Downpayment for a Condo in Singapore
Buying a private property in Singapore is no easy feat.
The smallest condominium in Singapore costs at least $1 million. That does not include the costs for home renovation, processing fees and other buy stamp duty.
You can’t finance the purchase with an HDB loan. The only option available is to apply for a credit facility from a bank. In this case, the downpayment amount may be higher.
Here is an example to illustrate.
Assuming the Ong family wants to buy a S$2 million condo in a prime neighbourhood.
Here is the amount payable;
|LTV limit||75% x 2,000,000=S$1,500,000|
|Downpayment: CPF||20% x 2,000,000=S$400,000|
|Downpayment: Cash||5% x 2,000,000=S$100,000|
As you can see, the amount you can get from your CPF of S$200,000 is higher. Additionally, the cash figure of S$50,000 and stamp duty is pretty high when buying an EC.
In the case of permanent residents, the amount may vary because you may have to purchase an extra stamp duty known as ABSD, which is capped at 5% of the house’s market price.
The downpayment for condominiums is definitely higher.
Paying for your Home Downpayment: HDB, Resale & More
Buying a home in Singapore is a big decision.
For Singaporeans who are single, they are only eligible for their own HDB when they’ve reached 35 years old. Those HDBs are designed for singles who are 35 years old and above.
To ensure that you can make your HDB downpayment or secure a HDB/bank loan, you need a good credit score as well as good financial health.
This means paying off all of your debts.