Buying a HDB flat is a rite of passage for many first-time homeowners in Singapore. Whether it’s a HDB BTO flat, resale flat or executive condominium (EC), you’d need to have enough money first off to pay the downpayment.
While the prices of BTO flats, resale flats and ECs can vary, there’s no denying that they have all increased, and will take a significant chunk out of your savings and CPF.
But how much exactly do you need for this downpayment? How do you figure out how much it is for different type of flat? Here’s where we come in.
ALSO READ: HDB BTO Oct 2024 Review: Locations, Prices, and More
HDB Downpayment Guide 2024
-
- How much is HDB downpayment for BTO, resale, and EC?
- Why are there 2 different types of HDB downpayment?
- HDB downpayment for BTO flat
- So, when do you have to pay your BTO flat downpayment?
- HDB downpayment for resale flats
- HDB downpayment for EC
- Things to note for Permanent Residents (PRs)
- Should I get an HDB loan or bank loan?
- What determines the loan ceiling of my bank loan?
- Does the new Plus housing model change anything?
- How do I know if I can afford the HDB downpayment?
1. How much is HDB downpayment for BTO, resale, and EC?
We’ve cut to the chase on how much the downpayment will cost on your first HDB flat:
| HDB loan | Bank loan | |
| HDB BTO | 25% CPF or cash | 25% (minimum 5% in cash + remaining 15% using cash and/or CPF OA) |
| HDB resale | 25% CPF or cash | 25% (minimum 5% in cash + remaining 15% using cash and/or CPF OA) |
| Executive condo | Not available | 25% (minimum 5% in cash + remaining 15% using cash and/or CPF OA) |
All you need to do is to multiply the percentage by the purchase price. For example, for a $400,000 BTO flat:
- If you take an HDB loan, your downpayment would be $100,000 (25%) in CPF or cash.
- If you opt for bank loan, your downpayment would be $20,000 (5%) in cash + $80,000 (20%) in CPF.
If $100k sounds a lot, it’s because of new measures to cool the resale market. As of 20 Aug 2024, HDB announced the lowering of the loan-to-value (LTV) limit for HDB loans from 80% to 75%.
While it means you can borrow up to the same rate as banks, you can still offset the cost of your HDB flat with various housing grants, which have also been increased.
Do note that the table above shows the total downpayment amount you’ll have to fork out. This total downpayment is split into 2 payments—one during the signing of the Agreement for Lease, and the other during key collection. Read more about this below!
2. Why are there 2 different types of HDB downpayment?
Your downpayment largely depends on which type of loan you take: HDB loan or bank loan.
Most people used to go for HDB loans as you could borrow up to 80% of the flat price, so your downpayment is only 20% and you can pay for it in full through your CPF. However, now that the LTV is 75%, same as banks, you may want to think about your options.
There are still other factors to consider when taking a loan. HDB’s home loan interest rate is quite high at 2.6%. And depending on the interest rate environment, bank interest rates could be higher or lower than the HDB one when you apply for your loan.
So the key things you need to know about your HDB downpayment are:
- Loan-to-Value (LTV) Limit: The amount that you can borrow from HDB or the bank — both of which are now 75%, as of 20 August 2024
- Downpayment: The outstanding amount after deducting the borrowing limit, which you can use your CPF to pay partly or fully
- Minimum cash downpayment: Only applies if you take up a bank loan, in which case it’s 5%.
We’ll also cover Stamp Duty (BSD and/or ABSD). This is a fee (of up to 4%) on top of the purchase price, which you must pay in cash first, then request a reimbursement from your CPF (so either way you’re still paying for it).
ALSO READ: Additional Buyer’s Stamp Duty (ABSD): What Is ABSD In Singapore? What Are The Rates?
3. HDB downpayment for BTO flat
Imagine this: you’re a “newly” wedded couple eager to move out of your respective parents’ places despite tying the knot 2 years ago.
Both of you have finally decided on this beautiful 3-room BTO flat in Tampines, a mature estate, with easy access to amenities and attractions. It costs $400,000—can you afford it?
Here’s the downpayment breakdown for your HDB BTO flat:
| HDB loan | Bank loan | |
| Loan-to-value limit | 75% ($300,000) | 75% ($300,000) |
| Downpayment (CPF) | 20% ($80,000) | 20% ($80,000) |
| Downpayment (cash) | No requirement | 5% ($20,000) |
| Stamp duty | $6,600 (calculator here) | $6,600 (calculator here) |
4. So, when do you have to pay your BTO flat downpayment?
After you book an HDB flat and pay the option fee, the HDB will get you to show up within 9 months to sign the Agreement for Lease.
You will make the first portion of your downpayment at the signing of the Agreement for Lease. If you are taking out a bank loan, make sure you have obtained a valid Letter of Offer by then as you’ll have to bring it to your appointment.
After that, you wait until your flat is built and then you can collect your keys. The balance downpayment must be paid when you pick up your keys. If all of the balance is covered by a loan, the HDB or your bank will disburse the money at this point.
Here’s a breakdown of how much downpayment you’ll pay at the 2 different stages:
| When to pay HDB downpayment | HDB loan (75% LTV ratio) | Bank Loan (75% LTV ratio) |
| When signing of Agreement for Lease for new BTO flat | 10% (CPF or cash) | 5% (cash) + 15% (CPF or cash) |
| During key collection | 15% (CPF or cash) | 5% (CPF or cash) |
| Total downpayment | 25% | 25% |
5. How much is my HDB downpayment under the staggered downpayment scheme?
You’ll be happy to know that HDB also offers a staggered downpayment scheme. Under this scheme, you pay the same total amount of downpayment, and the downpayment is still split into 2 parts. However, you pay a smaller proportion upfront during the signing of the Agreement for Lease.
| When to pay under the Staggered Downpayment Scheme | HDB loan (75% LTV ratio) | Bank Loan (75% LTV ratio) |
| When signing of Agreement for Lease for new BTO flat | 5% (CPF or cash) | 5% (cash) + 5% (CPF or cash) |
| During key collection | 20% (CPF or cash) | 15% (CPF or cash) |
The conditions to be eligible for the staggered downpayment scheme are:
- You are both first-timer applicants, or you are a couple comprising a first-timer applicant and a second-timer applicant.
- You obtained a valid HFE letter on or before the younger applicant’s 30th birthday.
- You have booked a 5-room or smaller flat.
OR
- You are downsizing to a smaller flat.
- You have booked an uncompleted 3-room or smaller flat in a non-mature estate.
- You have not sold or completed the sale of your existing flat at the time of your HFE letter application.
HDB will inform you if you are eligible for the staggered downpayment. There’s no need to apply for it.
6. How much is my HDB downpayment if I’m eligible for deferred income assessment?
From the Jun 2024 sales exercise, young couples eligible for deferred income assessment will pay an even smaller portion of the downpayment during the signing of the Agreement for Lease. Here are the eligibility requirements:
- Students/NSF: Both of you must be be either full-time students or National Servicemen (NSF) or have just completed full-time studies or National Service (NS) within the last 12 months before the HFE letter application.
- Age: At least one of you must be aged 30 or below at the point of the HFE letter application.
- Marital status: You must be married or be applying for a flat under the Fiancé/ Fiancée Scheme.
- Household status: At least one of you must be a first-timer.
| When to pay under deferred income assessment (for students and NSFs) | HDB loan (75% LTV ratio) | Bank Loan (75% LTV ratio) |
| When signing of Agreement for Lease for new BTO flat | 2.5% (CPF or cash) | 2.5% (cash) |
| During key collection | 22.5% (CPF or cash) | 22.5% (CPF or cash) |
7. HDB downpayment for resale flats
What if you don’t want to wait a whole lifetime for a new BTO flat? Many of the conditions when buying a BTO flat apply to resale flats as well.
For simplicity’s sake, let’s imagine you’re buying a 4-room resale flat in a mature estate like Bedok. At around $600,000, it’s more expensive than new BTOs in non-mature estates, but hey, at least you can move in within the year.
| HDB loan | Bank loan | |
| Loan-to-value limit | 75% ($450,000) | 75% ($450,000) |
| Downpayment (CPF) | 25% ($150,000) | 20% ($120,000) |
| Downpayment (cash) | No requirement | 5% ($30,000) |
| Stamp duty (pay in cash, but reimbursable from CPF) | $12,600 (calculator here) | $12,600 (calculator here) |
However, unlike uncompleted BTO flats, you will not be eligible for HDB’s staggered downpayment scheme. This means that you will have to cough up the $150,000 in cash or from your CPF when you sign the lease.
8. HDB downpayment for EC
Executive condominiums are technically HDB flats, but they’re a whole different beast from BTO and resale flats.
Unlike BTOs and resale flats, you cannot apply for a HDB loan to purchase your EC. You’ll have to go to the bank for that, and your downpayment will be much higher. The process largely follows that of the downpayment for a condo.
Here is the breakdown for a $1 million 3-room EC in a non-central neighbourhood:
| Bank loan | |
| Loan-to-value limit | 75% ($750,000) |
| Downpayment (CPF) | 20% ($200,000) |
| Downpayment (cash) | 5% ($50,000) |
| Stamp duty (pay in cash, but reimbursable from CPF) | $24,600 (calculator here) |
The challenge arises from accruing $200,000 in your CPF and $50,000 in cash. Stamp duty is quite steep too, at $24,600—the fact that it’s reimbursable from your CPF OA just means that you need that amount to begin with.
In total, you and your spouse need at least $74,600 in your bank accounts.
9. Things to note for Permanent Residents (PRs)
The above calculations were made with Singapore citizens in mind. Singaporeans only need to pay buyer’s stamp duty (BSD) for a first property purchase, so stamp duty does not affect the downpayment.
PR couples, however, need to pay additional buyer’s stamp duty (ABSD). This is usually 5% of the property’s price for a first home.
If you are a PR and your spouse is a Singaporean, you do not have to pay ABSD when making a HDB downpayment.
10. Should I get an HDB loan or bank loan?
| HDB loan | Bank loan | |
| Downpayment | 25% (can use CPF to pay) | 25% (min. 5% in cash) |
| Interest rate | 2.6% | Currently about 2.95% to 3.4% fixed rates |
| Does interest fluctuate? | No | Yes, every few years |
| Monthly instalments | Lower at the moment | Higher at the moment but can go lower in future if interest rates fall |
| Effort needed | Practically none | May need to refinance every 2 to 3 years |
| How forgiving is it? | More lenient | Less lenient |
As you can see, your HDB downpayment will vary significantly depending on whether you opt for an HDB or bank loan.
Cash-strapped Singaporeans would go for the HDB loan because you can use CPF to pay for the downpayment and not have to fork out any cash. Even though there is a chance that the HDB interest rate will eventually be higher than that of bank loans if interest rates fall on the market, it is fixed for a tenure of up to 25 years, meaning there is little to no fluctuation in your monthly instalments.
HDB is also more lenient in that you can choose to repay your loan early or even switch to another provider without penalty. If you can afford the downpayment, bank loans currently charge higher interest rates than HDB but these rates could fall if the interest rates on the market fall in the future.
However, bank interest rates are only locked in for 2 to 3 years, which means that you may need to refinance your loan every few years to keep on top of the best interest rates. The MoneySmart team can help with this troublesome bit of legwork.
11. What determines the loan ceiling of my bank loan?
The HDB Loan-to-Value ratio (LTV) is currently 75%. That means you can borrow a maximum of 75% of the property price when you take out an HDB loan.
However, how much you can borrow depends on a couple of factors, including the following:
- Mortgage Servicing Ratio (MSR): Not more than 30% of your gross monthly income can go towards repaying all property loans, including the one you are applying for.
- Total Debt Servicing Ratio (TDSR): Not more than 55% of your gross monthly income can go towards repaying monthly debt obligations, including the loan you are applying for. This includes credit card debt, student loans and so on.
12. Does the new Plus housing model change anything?
From the Oct 2024 BTO sales launch onwards, a new class of BTO projects will come into existence.
Unlike “standard” flats, which are run-of-the-mill HDB flats with the usual subsidies and restrictions we all know and love, Plus flats will be in a new category.
Plus flats will be built in locations considered more attractive, such as in HDB town centres or new MRT stations. Such flats will be a bit pricier than the Standard flats, so the government will dish out more generous subsidies.
However, tighter rental restrictions will also apply, and you’ll have to return HDB some money if/when you sell your flat. For the Oct 2024 BTO launch, Plus flats come with a 6 – 8% subsidy clawback of the flat’s resale or valuation price, whichever is higher.
The idea will be similar to the Prime Location Public Housing (PLH) model, except that these flats will not necessarily be in central or city fringe areas. Plus flats will enjoy less generous subsidies than PLH flats and also come with less onerous restrictions.
As far as downpayment and loans go, there’s no change to the rules for Plus flats. These flats are just another type of BTO flat, and the usual BTO downpayment rules will apply.
13. How do I know if I can afford the HDB downpayment?
That’s a question that only you can answer, but fortunately for you, we’ve got many tools for you to get started saving up for your first HDB downpayment. Start with our home loan tool, one of our many guides for you to purchase your first HDB BTO flat, resale flat and EC.
Even if the downpayment seems a bit steep, the HDB housing grant has also increased so your flat can be cheaper. Check out our CPF housing grant guide for HDB flats.
Depending on where you are at in your property journey, home valuation tools such as HomerAI from property technology start-up OhMyHome might also help.
If you’re a total newbie, you may use its GPT function to answer all your burning property questions. There’s no judgement if you still need help understanding more about downpayments.
For those ready to sell your current home and start a new chapter in your life, you may use the platform to get an estimated home valuation and cash proceeds. You may even use it to see your neighbour’s transacted prices, as well as other properties in the area. These numbers are updated monthly, so you can track the upward/downward movement of your home value and property transaction prices in their area. Honestly, it’s pretty handy even if you’re not doing any property-related legwork and just feeling a little kaypoh.
Whilst you’re saving up for the HDB downpayment, why not make your savings grow with the best fixed deposit accounts for something low-risk, or choose one of the many listed online brokerages for something with better returns, or do a bit of both?
Failing that, find out some ways to make some passive income or hustle up a high-paying side gig for something a little more immediate.
Found this article useful? Share it with another prospective home-owner!
About the author
Audrey Ng is a bargain hunter who tries to sniff out the best deals possible whether it’s food, shopping or travel. She will out auntie the auntiest of aunties.
Related Articles
HDB BTO Oct 2024 Review: Locations, Prices, Application Rates, and More
Buying an HDB BTO Flat in Singapore: A Step-By-Step Guide (2024)
Guide to the HDB Flat Eligibility (HFE) Letter (2024): When You Need It, How to Apply, and More
HDB Sale of Balance Flats: Guide to SBF & Open Booking (2024)