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Residential

Planning

This information can guide you on how to better manage the financial planning for your resale flat purchase. This will help you to decide on suitable flat choices within your affordability, which makes for an easier flat search.

Also, do note that you will likely need to finance the flat purchase with a housing loan. This is a long-term financial commitment, and you should also factor in the monthly instalments for your housing loan and other housing related expenses into your planning.

To work out a comprehensive financial plan, be sure to consider the following:
  • Cash and CPF savings
  • Housing loan
  • CPF Housing Grant Scheme
  • Payments involved
For further guidance and details, please refer to our information on financing a flat purchase.
 

Cash and CPF savings

You will probably use both cash and CPF savings for the flat purchase. Your resale flat financial planning should therefore cover:
  • How much cash is required
  • Amounts that can be paid using CPF savings

Cash savings

You must use cash for the following payments:
  • Deposit to seller (a maximum of $5,000, paid in 2 stages: the option fee, and the deposit)
  • Part of the initial payment (if you take a bank loan, or have insufficient CPF savings)
  • Amount not covered by CPF savings and eligible housing loan amount
  • Cash proceeds from disposing the last flat if you are taking a second HDB loan*
*If you are taking a second HDB loan to buy the resale flat, you will need to set aside part of the cash proceeds from the disposal of the existing or previous flat. That amount will be used to right-size the loan amount for your second HDB loan.

You will also need to set aside cash savings for other expenses such as furnishings, renovation, and some other costs.

CPF savings

The savings in your CPF Ordinary Account (OA) can be used for:
  • Initial payment in whole or in part (depending on whether an HDB or bank housing loan is used)
  • Partial or full payment for the flat purchase
  • Monthly mortgage instalments

However, do take note that the CPF withdrawal limit may only allow you to use a certain amount of your CPF savings for your flat purchase. When that limit is reached, you will not be able to use any more CPF savings to pay for your flat.

Please also note that there may be limits on the use of CPF savings and taking of a housing loan to buy a flat with a balance lease of less than 60 years. Do find out the maximum amount of CPF savings you can use for a flat purchase using these CPF Board services:

CPF Housing Grant Scheme

You may be eligible for CPF housing grants, which are housing subsidies that the government gives eligible Singapore Citizens. CPF grants are given in the form of CPF OA savings. They can be used for a flat’s initial payment and for reducing the housing loan amount.

Housing loan 

To help you finance your flat purchase, you may choose to get a housing loan from HDB or a housing loan from financial institutions (FIs) regulated by the Monetary Authority of Singapore . To take on a housing loan, you need to meet the eligibility conditions and credit assessment criteria.

If you take on a housing loan from HDB, you must obtain a valid HDB Loan Eligibility (HLE) letter before you exercise the Option To Purchase. The HLE letter will inform you of the loan amount you can get from HDB. Do exercise prudence and take on a loan amount that you can service comfortably over the loan tenure. You can apply for an HLE letter here.

If you do not meet the eligibility conditions for a housing loan from HDB, you will need to obtain a housing loan from a FI if a mortgage loan is required. A Letter of Offer must be obtained from the FI before you sign the Option To Purchase.

For flats with a remaining lease of less than 60 years, do note that there may be limits on the use of CPF savings and taking of a housing loan for the flat. Information on the remaining of an HDB block is available on the HDB Map Services under “Housing”.

Planning your finances

To help you plan your finances, we have put together information on financing a flat purchase.

For a start, you can use our financial tools to determine your current financial position and how much you can borrow for your flat purchase. 

If you intend to take a housing loan from HDB, do check out our interactive financial planning e-Services to help you estimate your loan amount, monthly instalments and other payments:

 

Housing loan from HDB

If you intend to get an HDB housing loan, you must first apply for an HLE letter. As a best practice, please do so as soon as possible; ideally before you start searching for a flat.

The HLE letter is valid for 6 months. It gives information on:
  • Eligibility for an HDB housing loan
  • Maximum loan amount
  • Maximum loan repayment period
  • Monthly loan instalments
  • Amount of cash proceeds to be used to pay for the next flat (if applying for second HDB housing loan)
When taking an HDB housing loan, you can later refinance the resale flat with a bank loan.

If you are applying for a second HDB housing loan, the full amount of CPF proceeds and part of the cash proceeds from the disposal of your current/ previous flat will be used to reduce the HDB housing loan amount.

Buyers of flats with less than 20 years remaining on the lease are not eligible for an HDB housing loan. You can check a flat’s lease details using our HDB Map Services.

Housing loan from a bank

You can also consider a bank loan if you choose not to use, or are ineligible for, a housing loan from HDB. When choosing a housing loan from a bank, please review the different housing loan packages offered by the banks thoroughly and weigh your options carefully. Importantly, please take note of key terms and conditions such as lock-in periods, interest rates, and any other financial considerations.

When taking a bank loan, you cannot refinance the resale flat with an HDB housing loan.

Housing loan tools and e-Services

For easier financial planning, use these tools to get some cost estimates.

Payments involved

The main payments you need to make for a resale flat purchase are as follows:
  • Deposit to seller (option fee and deposit)
  • Cash payment for balance purchase price (if applicable)
  • Initial payment
There are also additional costs not mentioned here that you need to be aware of.
 

Deposit to seller

This amount can be negotiated with the seller and is taken off the resale price.
 
Amount to Pay
Payment Mode
When to Make Payment
$1 to $5,000 in total, paid in 2 stages.
Cash
1) Granting of OTP
$1 to $1,000 is paid as the option fee.
2) Exercising of OTP
A deposit of up to $4,999 (cap of $5,000 minus the option fee amount) is paid.
 

Cash payment for balance purchase price

The cash payment for balance purchase price only needs to be paid when the resale price is higher than the market valuation.
 
Amount to Pay
Housing Loan Type
Payment Mode
When to Make Payment
The difference between the resale price and the market valuation
HDB loan/ Not taking any housing loan

Cashier's Order

At the resale completion appointment
Bank loan Cash Please check with the bank for the bank loan payment schedule
 

Initial payment

You make the initial payment after the HDB First Appointment. The amount is based on the resale price or market valuation of the flat, whichever is lower, as well as whether you are:
  • Taking an HDB housing loan
  • Not taking any housing loan
  • Taking a bank loan
Housing Loan Type
Initial Payment
Mode of Payment
When to Pay
HDB loan/ Not taking any housing loan 10% of the purchase price

CPF

You can use your CPF OA savings (including CPF Housing Grant if eligible) to make the initial payment up to the full 10%. If your CPF OA amount is insufficient, the balance is to be paid in cash.

At the first appointment
Cashier's Order
 
At the resale completion appointment
Bank loan
20% of purchase price for loan ceiling of 80%

CPF

You can use your CPF OA savings (including CPF Housing Grant if eligible) to make the initial payment up to 15%. If your CPF savings is insufficient, the balance is to be paid in cash.

Please check with the bank for the payment schedule for your bank loan.
Cash (minimum of 5%)
40% of purchase price for loan ceiling of 60%

CPF

You can use your CPF OA savings (including CPF Housing Grant if eligible) to make the initial payment up to 30%. If your CPF savings is insufficient, the balance is to be paid in cash.

Cash (minimum of 10%)
 
Please refer to housing loans from banks for more information on the loan ceilings.

Resources for you

  • Financial tools – Use this set of tools and calculators to evaluate the financial payments and commitments you will need to make when buying an HDB resale flat
  • Resale Financial Plan – Use the Resale Financial Plan service to estimate your loan amount and monthly payments. This helps you to forward-plan better