How Much Do I Have to Pay for HDB Downpayment? BTO, Resale and EC

Written by Shannon Wong on April 15, 2024

Key Takeaways

In Singapore, the downpayment for HDB properties, including BTO, resale, and ECs, varies by loan type and property. For HDB loans, the downpayment is 20% of the purchase price, payable via CPF or cash. Bank loans generally require a 25% downpayment, with at least 5% in cash. Additional costs include stamp duty and legal fees, with different interest rates offered by HDB and banks affecting the overall cost.

Stepping into the realm of homeownership in Singapore? The journey starts with one critical question: “How much do I need for an HDB downpayment?” 

Whether you’re considering a Build-To-Order (BTO) flat, a resale flat, or an Executive Condominium (EC), understanding the downpayment required is crucial.

This guide aims to demystify the complexities surrounding downpayments, offering a clear overview of the necessary commitments for different housing types and financing options. With precise information on HDB and bank loans, we equip you with the knowledge needed to achieve this significant financial milestone.

Read on to gain more clarity.

Understanding HDB Downpayment

A downpayment is the initial upfront portion of the total purchase price of a property, paid out of pocket by the buyer.

In Singapore’s context, whether you’re eyeing a BTO flat, a resale flat, or an EC, the downpayment is a significant factor that determines your ability to purchase a home. It acts as a commitment to the lender, be it HDB or a bank, securing the loan for the remainder of the purchase price.

The specific percentage of the downpayment required varies depending on the type of loan you opt for—HDB loan or bank loan—and the type of property you intend to buy.

Typically, downpayments in Singapore range from 10% to 25% of the purchase price, influenced greatly by your loan choice and eligibility.

Here are the downpayment costs for both the HDB loan and the bank loan:

Property TypeHDB LoanBank Loan
HDB BTO20% CPF or cash25% (minimum 5% in cash + remaining 20% using cash and/or CPF OA)
HDB Resale20% CPF or cash25% (minimum 5% in cash + remaining 20% using cash and/or CPF OA)
Executive CondoNot available25% (minimum 5% in cash + remaining 20% using cash and/or CPF OA)

Keep in mind that these figures serve as a basic framework – for a more tailored estimate, consulting with a financial advisor is advisable to understand the precise downpayment required.

Yet, the journey doesn’t end with the downpayment. Securing a home involves additional expenses, including stamp duty and legal fees, which are essential components of the overall cost.

Besides the downpayment costs, bank and HDB loans have different interest rates.

Bank vs HDB Loan Downpayment: What Are The Interest Rates?

When securing financing for your HDB property, a critical factor to consider is the interest rate associated with your loan choice. Here’s a closer look at how HDB and bank loans stack up in terms of interest rates:

HDB Loan Interest Rates

HDB loans are known for their stability, offering a fixed interest rate of 2.6%. This consistent rate provides buyers with peace of mind, ensuring predictable monthly repayments throughout the loan period.

As obvious, this interest rate is a little on the higher side.

Bank Loan Interest Rates

Conversely, bank loans tend to offer more competitive interest rates, generally ranging from 1.6% to 2.5%. However, these rates are not fixed and may fluctuate based on market conditions, potentially impacting the amount of your future repayments. This variability requires borrowers to stay informed about market trends and adjust their financial planning accordingly.

Important: Regardless of the loan type, you’ll also need to account for stamp duty fees, which would be calculated based on the purchase price.

Now that you know the interest rate in both cases, let’s see how much downpayment you’ll have to make for different property types (BTO, Resale and EC).

Detailed Breakdown of Downpayment by Property Type

HDB BTO Downpayment

Imagine you and your partner, having celebrated your second anniversary, are ready to leave your family homes behind. You’ve set your hearts on a charming 3-room BTO flat located in the vibrant Tampines area, known for its accessibility to various amenities. The flat is priced at $325,000, but the question remains: is it within your budget?

Let’s dive into the downpayment details for your dream HDB BTO flat:

HDB Loan

  • Loan-to-Value Limit: You can borrow up to 80%, which equals $260,000.
  • Downpayment (CPF): You’ll need to contribute 20% from your CPF savings, totaling $65,000.
  • Downpayment (Cash): There’s no cash requirement with an HDB loan.

Bank Loan

  • Loan-to-Value Limit: The borrowing limit is slightly lower at 75%, meaning you can loan $243,750.
  • Downpayment (CPF): Similar to the HDB loan, a 20% downpayment is required, which is $65,000.
  • Downpayment (Cash): However, with a bank loan, you must also provide 5% in cash, amounting to $16,250.

HDB Resale Flat Downpayment

If the idea of waiting years for a new BTO flat doesn’t appeal to you, consider the alternative: purchasing a resale flat.

Let’s say you’re looking at a 4-room flat in the well-established Bedok neighborhood. Priced at $700,000, it’s a step up in cost compared to a BTO, but the major advantage is the ability to move in much sooner, often within a year.

Here’s a breakdown of what the financials look like for this resale flat option:

HDB Loan

  • Loan-to-Value Limit: You’re allowed to borrow up to 80%, which in this case would be $560,000.
  • Downpayment (CPF): A 20% downpayment is required, equating to $140,000, which can be paid using your CPF funds.
  • Downpayment (Cash): There’s no cash downpayment needed when securing an HDB loan.

Bank Loan

  • Loan-to-Value Limit: The borrowing cap is set at 75%, allowing you a loan of $525,000.
  • Downpayment (CPF): Just like with the HDB loan, you’ll need to put down 20%, or $140,000, from your CPF.
  • Downpayment (Cash): Additionally, a cash downpayment of 5% is required, which amounts to $35,000 in this scenario.

One key difference to note when opting for a resale flat over a BTO is the eligibility for HDB’s staggered downpayment scheme, which lets you pay a reduced downpayment.

With resale flats, however, you’re expected to fulfil the downpayment requirements upfront when signing the lease. (More on this later.)

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HDB Downpayment For EC

Executive condominiums (ECs) stand apart from BTO and resale flats in several ways. One of the most notable differences is the financing aspect.

For ECs, securing a HDB loan isn’t an option. Instead, you must turn to banks for financing, which typically involves a higher downpayment, mirroring the process required for purchasing a private condominium.

Consider the financials for acquiring a 3-room EC valued at $1 million, situated in a suburb:

Bank Loan

  • Loan-to-Value Limit: You can borrow up to 75%, amounting to $750,000.
  • Downpayment (CPF): A 20% downpayment, or $200,000, can be made using CPF funds.
  • Downpayment (Cash): Additionally, a cash downpayment of 5%, which is $50,000, is required.

The real challenge lies in accumulating $200,000 in CPF savings alongside $50,000 in cash for the downpayment. The substantial stamp duty of $24,600 adds another layer of financial preparation needed.

So, you should have at least $74,600 available in cash to start this journey.

Now, let’s get you to learn about the Staggered Downpayment Scheme that we mentioned earlier.

What’s The Staggered Downpayment Scheme?

To understand the true benefit of a staggered downpayment scheme, you’ll first have to understand how HDB downpayment is made.

The process of paying your downpayment for a BTO flat unfolds in two main stages.

Initially, after you’ve selected your HDB flat and secured it with the option fee, HDB will invite you to sign the Agreement for Lease within nine months. It’s during this appointment that you’ll be required to pay the first segment of your downpayment.

Important: For those opting for a bank loan, it’s crucial to have a valid Letter of Offer from your bank by this time, which you’ll need to present during your meeting.

For all, however, the next step in the process occurs once your flat is ready and you’re set to collect your keys. At this juncture, the remaining portion of your downpayment is due. Should this balance be fully financed by your loan, either HDB or your bank will release the funds accordingly to cover this cost.

Here’s a simplified overview of the downpayment portions at each of these stages:

Payment TimingHDB LoanBank Loan (75% LTV ratio)
At the time of signing of Agreement for Lease for new BTO flat10% (CPF or cash)5% (cash) + 15% (CPF or cash)
At the time of key collection10% (CPF or cash)5% (CPF or cash)

This is where the staggered downpayment scheme eases things for you when buying a BTO flat.

It allows you to reduce the upfront payment at the time of signing your lease agreement.

So, now this is how your downpayment looks:

Payment TimingHDB LoanBank Loan (75% LTV ratio)
At the time of signing of Agreement for Lease for new BTO flat5% (CPF or cash)5% (cash) + 5% (CPF or cash)
At the time of key collection15% (CPF or cash)15% (CPF or cash)

This is also known as a phased downpayment. But it’s not for everyone.

To be eligible for the Staggered Downpayment Scheme tailored for first-time buyers, applicants must either be venturing into their first HDB purchase or be a mixed-status couple with one first-timer and one second-timer applicant.

Crucially, a valid Home Financing Eligibility (HFE) letter is required by the date the younger applicant turns 30.

Additionally, the scheme is accessible to those who commit to an uncompleted flat, up to five rooms in size, during any of HDB’s sales launches.

Your Path to Homeownership in Singapore

Buying a home involves a complex interplay of factors, including downpayment affordability, interest rates, and personal financial stability – all of which can be stressful.

However, the goal of homeownership should not lead to financial strain. Careful planning, leveraging available resources, and making informed decisions can make this journey rewarding and financially sustainable.

Feeling ready to take the next step towards owning your dream home but need financial assistance? At 1AP Capital, we’re here to help bridge the gap.

Whether you’re assembling funds for your downpayment or addressing extra costs associated with purchasing a home, our loan solutions are designed to meet your unique needs. Consider enhancing your new home with our bespoke home renovation loans, making it easy to add personal touches as you settle in. Apply for a loan with us today and take a significant step towards realising your dream home.

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