Securing of Credit

If you need financing to buy a flat, you will have to secure a housing loan from HDB or a financial institution (FI) regulated by the Monetary Authority of Singapore before you commit to the flat purchase.

If you wish to apply for a housing loan from the FIs, do approach the FIs directly to check your loan eligibility.

If you wish to take an HDB Housing Loan, you will need to have a valid HDB Loan Eligibility letter when you:

  • Book a flat^ with HDB*#
  • Obtain an Option to Purchase from a resale flat seller and when you submit a resale flat application
  • Apply to take over the ownership of an existing flat (by way of transfer)

The HDB housing loan amount will depend on the extent the remaining lease can cover the youngest buyer till the age of 95. If the remaining lease does not cover the youngest buyer/ owner till the age of 95 at the point of flat application+, the loan amount will be pro-rated from the 90% LTV limit. HDB will not provide a housing loan if a flat has a remaining lease of 20 years or less at the time of the flat application+.

Use our calculators to work out your budget and find out the payments required to buy a new or resale flat at various milestones. The housing loan information on the calculators will help you estimate the loan amount and understand the terms and conditions in taking up a housing loan from HDB and the FIs. 

With a holistic view of your estimated budget and financial options, you can make an informed decision in your flat buying journey.

^ There is no mortgage loan financing for the purchase of a short lease 2-room Flexi flat. You will have to pay for the flat using your cash and/ or CPF savings.

* Eligible first-timer couples who are full-time students or National Servicemen, or have completed their studies or National Service in the last 12 months before their flat application may qualify to defer the income assessment for an HDB housing loan and the Enhanced CPF Housing Grant (EHG) till about 3 months before key collection. 

# Applicants without a valid HLE letter when they book a flat will not be eligible to apply for an HDB housing loan.

+ For flat applications received before 10 May 2019, the HDB housing loan may be reduced or disallowed if you are buying or taking over the ownership of a flat with a remaining lease of less than 60 years.

Important notes on housing loans

Taking a housing loan is a long-term financial commitment. The payment of monthly instalments can stretch up to 25 years, and this covers both the principal and interest amounts. It is important to exercise prudence by borrowing what you can pay back comfortably. 

Do not overstretch your budget

While it may seem tempting to borrow as much as possible if you can afford the current monthly instalments, this can be risky if, in the long run, you are unable to keep up with the monthly repayments.  You should borrow as little as possible and give yourself more financial flexibility to deal with emergencies and future expenses.

Cater for future changes in income and expenses

There may be changes in the mortgage loan interest rates, CPF contribution rates or the applicable limits for CPF usage. This means that you may need to use more cash to meet future loan instalments.

Choose a shorter repayment period

A longer repayment period means that the mortgage loan amount will be repaid at a slower pace and more interests will have to be paid. A shorter loan repayment period is more prudent as there is a shorter period of exposure to fluctuations in loan interest rates, incomes and expenses, etc. In addition, you can also save on the interest payments.

Be prepared for the unexpected

Unforeseen circumstances like retrenchment, business failure, or illness can lead to a reduction in income. Be prepared for these by setting aside some savings.