Mode of Financing

Plan your finances and work out your budget before you search for a suitable home.

To work out a financial plan, consider the following:

  • Payments that you need to make by using cash and CPF savings
  • The amount of housing loan
  • CPF housing grant(s)

You may use our calculators to estimate your finances and the amount of housing loan you may need for your flat purchase. Read financial planning for flat purchase for more tips on financing a flat purchase.

Cash and CPF savings

You will need to make payments at various stages of the transaction. When planning your finances, you should therefore account for the amount of cash required and the amount that you can use from your CPF savings.

Cash

You must use cash at the following stages:

Option to Purchase

Deposit to seller for Option to Purchase (OTP) You must pay the sellers a deposit ($2 to $5,000), which consists of the Option Fee and Option Exercise Fee, during the granting and exercising of the Option to Purchase respectively.
Processing fee for Request for Value If you intend to buy a resale flat using your CPF savings and/ or a housing loan, make a Request for Value to HDB to determine the flat’s value. You will need to pay a processing fee of $120.

Resale Application

Resale application fee You must pay an administrative fee of $80 (or $40 for 1- and 2-room flats), when you submit your portion of the resale application via the HDB Resale Portal.
Legal fees The amount payable will depend on the solicitor you appoint to act for you. Read more about the payments required.
Part of the initial payment You must pay part of the initial payment in cash if you are taking a housing loan from a financial institution (FI) or have insufficient CPF savings.
Others E.g. the administrative fee if you agree to the temporary extension of stay by flat sellers

Resale Completion

Amount not covered by CPF savings and eligible housing loan amount

You must pay the balance purchase price of the flat before or during the resale completion appointment, after factoring in:

  • Initial payment
  • Any CPF housing grant(s)
  • CPF Ordinary Account savings
  • Eligible housing loan amount

Read more about the resale completion appointment.
Cash proceeds from disposal of the last flat if you are taking a second HDB housing loan If you are taking a second HDB housing loan, you have to use part of the cash proceeds from the disposal of an existing or previous flat to pay for your flat purchase, so as to reduce the loan amount required, for financial prudence.
Others

E.g.:

CPF savings

The savings in your CPF Ordinary Account (OA) can be used for:

Legal fees The legal fees will depend on the solicitor you appoint to act for you.
Initial payment

You may use your CPF savings to pay for the initial payment.

If you are taking a housing loan from a financial institution (FI), at least 5% of the initial payment have to be in cash.

Balance purchase price You may use your CPF savings to pay for the balance purchase price.
Monthly payments of mortgage instalments The monthly payments will start after the resale completion.

Flat buyers taking a housing loan from HDB have the option of retaining up to $20,000 of the available CPF savings in each buyer's OA. The remaining balance in the CPF OA must be used to pay for the flat purchase, before they can take an HDB housing loan. If you need the CPF refund from the sale of your current property to finance the resale flat purchase, please ensure the amount has already been credited to your CPF OA, before you submit the resale application.

You should also take note of the following conditions for using your CPF savings:

  • There is a limit on the total amount of CPF savings that can be used for your flat purchase. Once that limit is reached, you will not be able to withdraw more of your CPF savings and have to pay the balance flat purchase price and/ or monthly mortgage instalments in cash
  • The total amount of CPF savings that can be used for your flat purchase and/ or paying monthly mortgage instalments will depend on the extent the remaining lease of the flat can cover the youngest buyer up to the age of 95. You can get the details of a flat's lease at HDB Map Services. Details on the use of CPF savings and the applicable limits are shown in the table below:
    Remaining lease of flat is at least 20 years and can cover the youngest buyer up to the age of 95 Applicable Limits for CPF Usage
    Yes The amount use is capped at the lower of the value of flat or price of the flat at the time of purchase.
    No The amount is pro-rated based on the extent the remaining lease of the flat can cover the youngest buyer up to the age of 95. When the allowed CPF amount is used up, buyers have to pay the balance flat purchase price and/ or monthly mortgage instalments in cash. This will help buyers to set aside CPF savings for their housing needs during retirement (e.g. buying a replacement property).

For information on the use of CPF savings, you may use the CPF Board's online calculator. For further enquiries on the use of CPF savings, please visit CPF Board’s website.

Housing loan

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

As the purchase of a flat is a long-term commitment and payment of the monthly instalments can stretch up to 25 years or more, it is important to exercise prudence so you can continue to pay the monthly payments.

Housing loan from HDB

If you wish to take a housing loan from HDB, you have to first obtain an HDB Loan Eligibility (HLE) letter. The HLE letter will inform you of the loan amount you can receive, based on your financial situation. Knowing the available housing loan amount will help you to estimate your budget. You should take note of the following:

Valid HLE letter

You will need a valid HLE letter at all of the following stages:

  • Before obtaining an Option to Purchase (OTP) from a flat seller
  • When you exercise the OTP
  • When you submit the resale application
Second HDB housing loan If you are taking a second HDB housing loan, the eligible loan amount will be reduced using the CPF refund and part of the cash proceeds from the disposal of your current or last owned flat.
Retaining up to $20,000 CPF savings in Ordinary Account (OA)

Those taking an HDB housing loan will have the option of retaining up to $20,000 CPF savings in each buyer's OA. The rest of the available CPF OA balance must be used to pay for the flat purchase.

Those taking a housing loan from FIs may check with the FIs for their conditions.
Remaining lease of flat

If the lease can cover the youngest buyer to the age of 95 and above, the Loan-to-Value (LTV) limit will be 80%^ of the lower of the resale price and value.

If the remaining lease is unable to do so, the LTV limit will be pro-rated from 80%.

^ For flat applications submitted on or after 30 Sep 2022.

Flat buyers who have submitted a resale application will be provided with a customised financial plan, which will include the applicable LTV limit at point of resale application (if they are taking an HDB housing loan), and the payments required at the various milestones of their flat purchase.
Refinancing to housing loan from financial institution (FI) When you take a housing loan from HDB, you may later refinance the loan with a housing loan from a FI.

Use the following online calculators to compute the allowable CPF usage and the HDB housing loan:

You can get the details of a flat’s lease using the HDB Map Services.

Housing loan from Financial Institutions

You may choose to finance your flat purchase with a housing loan from the FIs regulated by Monetary Authority of Singapore (MAS). View and compare the housing loan packages offered by participating FIs.

Check the key terms and considerations in taking up a housing loan from the FIs before making a decision. You may use our calculator to obtain housing loan estimates from the FIs.

Apply early for an In-Principle Approval (IPA) from an FI for a preliminary assessment of your housing loan eligibility before you start searching for a flat, as knowing the available housing loan amount will help you estimate your flat budget. You should also take note of the following:

Valid Letter of Offer (LO) You must have a valid LO before exercising the OTP.
Refinancing to housing loan from financial institution (FI) When you take a housing loan from the FI, you cannot refinance the loan with a housing loan from HDB. You may refinance the FI loan with a housing loan from another FI.

CPF housing grants

You may be eligible to receive a housing subsidy to help with the purchase of your resale flat.

Read our eligibility conditions to find out if you are eligible for any CPF housing grants, which are housing subsidies given by the Government to eligible Singapore Citizen buyers.

The housing grants can be used for the initial payment and to reduce the required housing loan amount.