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Residential

Planning

Early and prudent financial planning for your flat purchase will make for an easier, more practical flat search. Here are the main considerations to take into account:

  • Amount of cash and CPF savings
  • Amount of CPF Housing Grant received
  • Housing loan quantum, and whether you can pay it off over the long term
  • Existing payments, fees, and other financial commitments

Cash savings

You will need sufficient cash savings for the payments of your flat or EC purchase. These include:

  • $10 administrative fee to be paid by credit card when you buy a flat from HDB. For DBSS and EC applications, please check with the developers on the amount that you need to pay when you submit an application
  • Option fee
  • Cash portion of downpayment
  • Cash proceeds from disposing the last flat to take on a second HDB loan

If you are taking a second HDB loan for the new flat, you will need to set aside part of the cash proceeds from the disposal of the existing or previously owned flat. That amount will be used to right-size the quantum for your second HDB loan.

CPF savings

The savings in your CPF Ordinary Account can be used to pay for your flat or EC unit. From 10 May 2019, the total amount of CPF that can be used for the property purchase will depend on the extent the remaining lease of the property can cover the youngest buyer to the age of 95. Details on the use of CPF savings for the flat purchase are shown below.

Flat applications received on or after 10 May 2019:

Remaining lease of property is at least 20 years and can cover youngest buyer until at least age of 95 CPF Usage
Yes

Buyer can use CPF to pay for the property up to the Valuation Limit

No

Use of CPF will be pro-rated based on the extent the remaining lease of the property can cover the youngest buyer to the age of 95. This will help buyers set aside CPF savings for their housing needs during retirement (e.g. a replacement property).

For information on the use of your CPF usage to buy a flat, you may use the online calculator at CPF Board’s website.

 

Flat applications received before 10 May 2019:

Remaining lease of property CPF Usage
60 years or more

Buyer can use CPF to pay for the property up to the Valuation Limit^ (VL)

30 years to less than 60 years
  • Buyer can use CPF if the remaining lease of the property covers the youngest buyer until at least the age of 80

  • Total amount of CPF that can be used is capped at pro-rated VL

^The VL is the lower of the purchase price or the property value at the point of purchase. Usage beyond the VL (up to applicable limits) is allowed if the property buyers have accumulated their Basic Retirement Sum.

For further enquiries on the use of your CPF to buy a flat, please contact CPF Board Service Line at 1800 227 1188.

Information on the remaining of an HDB block is available on the HDB Map Services under “Housing”.

CPF Housing Grant (if eligible)

CPF Housing Grants are housing subsidies that the government gives to eligible Singapore Citizens, in the form of CPF OA savings. They can be used for a flat’s initial payment, thus reducing the housing loan amount.

You can find out about the different types of CPF grants here.

Housing loan (if required)

To help you finance your flat purchase, you may choose to get a housing loan from HDB or a housing loan from a financial institution (FIs) regulated by the Monetary Authority of Singapore. 

To get 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 booking a flat.

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.

For flat applications submitted to HDB on or after 10 May 2019:

Flat buyers will be able to take an HDB housing loan of up to the full 90% Loan-to-Value (LTV) limit, if the remaining lease of the flat can cover the youngest buyer to the age of 95.The LTV limit will be pro-rated if the remaining lease does not cover the youngest buyer up to the age of 95 at the point of the flat application. You can click on the following link to use the online calculator to compute the allowable CPF usage and the HDB housing loan:

If you do not meet the eligibility conditions for a housing loan from HDB or are buying an EC unit, you will need to obtain a housing loan from an FI if a mortgage loan is required. A Letter of Offer must be obtained from the FI before exercising the Option To Purchase or signing the Sale & Purchase Agreement. Similarly, for flat applications submitted to HDB on or after !0 May 2019, please note that there may be limits on the use of CPF savings and taking of a housing loan for the flat purchase if you are applying to buy a flat with remaining lease that does not cover the youngest buyer up to age 95 as at the date of the flat application.

Information on the remaining of an HDB block is available on the HDB Map Services under “Housing”.

Planning your finances

To help you work out and 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 standing and how much you can borrow for your flat purchase. 

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