Housing Loan from Banks
 
Financial Planning

Buying an HDB flat is a long–term financial commitment that is likely to stretch more than 20 years. The HDB provides financial planning session to potential flat buyers. You can visit our Enquiry Counters at HDB Hub, Atrium 1st storey for advice.








Who has to take a bank loan?


If you are buying an HDB flat or a DBSS flat, and you are not eligible for an HDB loan, that is, when you and/or the essential occupiers:
  • have already taken 2 or more concessionary interest rate mortgage loans previously. This is regardless of whether the previous loans were for buying flats directly from HDB or from the open market;
  • have already taken 1 concessionary interest rate mortgage loan and 1 housing subsidy previously and the property you last disposed of is a private residential property;
  • own 2 or more owner-operated market/hawker stalls or commercial/industrial properties inside or out of Singapore;
  • own 1 market/hawker stall or commercial/industrial property but do not operate the business yourself.

then you will have to apply for a bank loan.

If your average gross monthly household income is more than $8,000 a month and you are buying a DBSS flat from the developer, you will have to apply for a housing loan from banks.

EC buyers will have to obtain loans from banks or financial institutions as the HDB does not provide housing loans for the purchase of EC.

You can check with the banks/financial institutions on the housing loan packages they offer.








What is the repayment period?

From 28 August 2013, the repayment period for bank loans to finance the purchase of HDB and Design, Build and Sell Flats (DBSS) flats is capped at 30 years.

Implementation Date

Transaction Type
Cut-Off Date
Purchase of HDB flatsDate of granting of Option to Purchase (OTP) (i.e. date of booking) on or after 28 August 2013 and sales exercise launched from July 2013
Purchase of DBSSDate of granting of Option to Purchase (OTP) (i.e. date of booking) on or after 28 August 2013





What is the loan ceiling?


The loan ceiling is based on the purchase price or valuation price, whichever is lower.

From 28 August 2013

Loan Tenure
No outstanding loan
≤ 25 years
80%
> 25 years or loan period extends beyond borrower's age of 65
60%


Between 12 Jan 2013 and 27 August 2013

Loan Tenure
No outstanding loan
With 1 outstanding housing loans
With 2 or more outstanding housing loans
≤ 30 years
80%
50%
40%
> 30 years or loan period extends beyond borrower's age of 65
60%
30%
20%

You will not be subjected to the lower loan ceiling when you obtain another housing loan for the purchase of an HDB flat if you are able to provide the financial institution granting the loan a copy of the signed undertaking to HDB committing to complete the sale of your sole existing property within the period stipulated in the undertaking.

Additional Measures to Ensure a Stable and Sustainable Property Market announced on 11 Jan 2013

Between 6 Oct 2012 and 11 Jan 2013

  • Repayment period up to 30 years
    Repayment Period + Buyer’s Age*
    No outstanding loan
    With 1 or more outstanding housing loans
    ≤ 65
    80%
    60%
    > 65
    60%
    40%
* The banks/financial institutions may continue to set their own lending guidelines on whether to use the average age of all buyers of a flat or the youngest buyer to determine the loan tenure.

  • Repayment period between 31 to 35 years#
    No outstanding loan
    With 1 or more outstanding housing loans
    60%
    40%
# Regardless of buyers’ age.

MAS's press release on 5 Oct 2012

Before 6 Oct 2012

  • No outstanding loan
    The loan ceiling is 80%.

  • One or more outstanding housing loans
    The loan ceiling is 60%.



When to Apply?


You must obtain a bank's Letter of Offer before you exercise an Option To Purchase or sign the Agreement for Lease.





Where to Apply?


You should consult any bank to find out the amount of loan which you can get based on your current income.

A list of all banks is available on the Monetary Authority of Singapore website:
Customer Information Sheet

If you are considering taking a bank loan, you can request a Customer Information Sheet. It is advisable to spend some time studying the different loan packages available from banks/financial institutions.




Useful information


These information would be useful if you are taking a housing loan from Banks:

    Hide details for CPF Withdrawal LimitCPF Withdrawal Limit

You can use the savings in your CPF Ordinary Account to service your housing loan. However, under the CPF Board's requirements, you are allowed to withdraw only up to a certain limit. Once the CPF withdrawal limit is reached, you will not be allowed to use your CPF money to pay for your flat.

To find out the maximum amount of CPF that can be used for the property, you may log on to the CPF Board's CPF Housing Withdrawal Limits Calculator (for flats with remaining lease of 60 years or more) (e-Service) or the Property with less than 60 Years Lease Calculator (for flats with remaining lease of less than 60 years, but at least 30 years) (e-Service).

If you are buying a flat with remaining lease less than 30 years, CPF monies cannot be used. This is applicable to flat applications received on or after 1 July 2013.

For enquiries on CPF withdrawal limits, you may call the CPF Board at 1800-2271188 or e-mail CPF Board.

    Hide details for Cash PaymentCash Payment

HDB flat buyers who are getting a mortgage loan from banks have to make a minimum cash payment of:

Loan Tenure
< 30 years
31-35 years
Age+Tenure < 65 years
Age+Tenure > 65 years
No outstanding residential property loans
5%
10%
10%
With one or more outstanding residential property loans
6 Oct 2012 - 11 Jan 2013
10%
10%
10%
From 12 Jan 2013
25%
25%
25%
  • The cash payment is computed based on purchase price of the flat.
  • You will not be subjected to the higher cash payment when you obtain another housing loan for the purchase of an HDB flat if you are able to provide the financial institution granting the loan a copy of the signed undertaking to HDB committing to complete the sale of your sole existing property within the period stipulated in the undertaking.

Additional Measures to Ensure a Stable and Sustainable Property Market announced on 11 Jan 2013



Before 6 Oct 2012

HDB flat buyers who are getting a mortgage loan from banks have to pay a 5% cash payment.

If you have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan from banks or financial institutions, the cash payment is 10%.


    Hide details for Priority of PaymentPriority of Payment

When an HDB flat financed with a bank loan is sold, the sales proceeds will be applied in the following manner:

1st – to discharge the outstanding mortgage loan with the bank.

2nd – to refund the CPF savings withdrawn for the purchase of the property.

3rd – to pay the interest on the mortgage loan (from the date of default in payment) if applicable, and the interest on CPF money withdrawn.



Legal Services


The HDB provides legal services to buyers of HDB flats.

If you are taking a bank loan for your flat purchase, we can act for you in the purchase or mortgage of the flat or both. Alternatively, you can appoint a law firm to act for you. However, if a personal guarantee is required by the bank to secure the housing loan, we cannot act for you in the mortgage.

You need to submit a signed Warrant to Act to us if you wish to engage HDB's legal services.

If you wish to engage a private solicitor, you will have to submit a letter from your solicitor to the HDB.





Articles Produced by the Association of Banks in Singapore (ABS)

The Association of Banks in Singapore (ABS) promotes and represents the interests of the banking community in Singapore.

The Association worked with major retail banks with CASE and MoneySENSE in producing the following articles. The aim is to help consumers understand money and debt management.

Articles
About Home Loans - Key Questions to Ask the Bank Before Taking a Home Loan
MoneySENSE Worksheet on Borrowing Money




Last Updated on 17 Oct 2013