Buying a condo in Singapore is complicated. How much cash you’ll need for your condo downpayment can depend on several factors, such as your loan to value ratio, the purchase price you agree with the seller, buyer’s stamp duty, and more.
Ultimately, there’s a lot to think about when purchasing private property such as a condo in Singapore. Whether it’s your first property purchase or a second or third condominium unit you are buying to expand an existing property portfolio, it’s important to understand these factors, as well as the various ways in which you can fund your total condo downpayment.
Once upon a time, purchasing a HDB BTO flat was the Singaporean dream – particularly when buying your first property. But residential property trends can and do change, and in today’s post-pandemic world of HDB BTO project delays, more and more Singapore citizens, permanent residents, and foreigners are looking for a condo unit instead. In this article, Loan Advisor reviews everything you need to know about making your downpayment for condo.
Factors That Influence Condo Downpayment Costs
The total downpayment amount you’ll need to pay when making a downpayment for condo can be influenced by numerous factors, including stamp duty, loan to value, the minimum downpayment required, legal and real estate costs and the amount of CPF you are able to use. Let’s review how each of these factors affects your situation when making a downpayment for condo:
Buyer’s Stamp Duty BSD
Stamp duty is effectively a tax charge which you’ll need to clear in cash before you make a downpayment for a condo. Buyer’s stamp duty applies to all residential property purchases.
That said, how much stamp duty you’ll need to pay varies depending on the purchase price of your desired condo unit, the number of second, third and subsequent properties you own (if any) and whether you are a Singapore citizen, permanent resident, or foreigner.
Additional Buyer’s Stamp Duty ABSD
Permanent residents (PRs) and foreigners are required to pay extra stamp duty charges known as Additional Buyer’s Stamp Duty ABSD. On your first property purchase, ABSD will cost PRs an extra 5%, while foreigners will be charged 30%. For all home buyers, your CPF ordinary account can be used to pay ABSD and BSD, but only on a reimbursement basis.
Loan to Value LTV
When you take out a home loan, the LTV limit is as critical as loan tenure or bank interest rates. Ultimately, your LTV limit determines how much a bank or moneylender is willing to let you borrow and will influence what your minimum cash down-payment will be relative to the purchase price of your desired home purchase.
For example, if you are buying an $800,000 private property with a 75% LTV limit on your home loan (worth $600,000), your downpayment (of 25%) will cost you $200,000 – though this may be separated into a minimum cash downpayment and an outstanding condo downpayment.
Minimum Cash Downpayment
When it comes to paying the downpayment for condo itself, you’ll need to make a minimum cash downpayment directly from your bank account. The amount you’ll need to pay will be dependent on the condo’s price and your agreed LTV limit. So, in our $800,000 condo example, which requires a total condo downpayment of 25% or $200,000, your upfront cost would equate to a minimum cash downpayment of 5% or $40,000.
Legal Fees and Costs Related to Real Estate Agents
Buying a private condominium isn’t quite as straightforward as getting loan approval, putting down a condo deposit and simply moving straight in. Your upfront cost will also include the likes of legal fees and any commissions charged by the real estate agent you use. Look for lawyers and agents that offer an efficient service or very good service at a reasonable price.
Your CPF and the Level of Funds You Have
Singapore citizens and permanent residents can use their CPF ordinary account to fund their private condo or home purchase, but only within certain limits. In our $800,000 condo unit example, as an SG citizen, you would need at least $160,000 in your CPF OA and $58,600 cash in hand to make a condo downpayment. We’ll explore how this works later in this article.
If you wish to pay stamp duty with your CPF, this is available on a reimbursement basis only and your ordinary account must therefore have a sufficient balance for making the payment.
What Does a Condo Downpayment Cost for a Condo in Singapore?
To give you a better idea of what a typical downpayment for a condo might look like for Singaporeans, PRs, and foreigners, we’ve put together a comparison table below based on a condo unit with a purchase price of $800,000 if using a home loan with a 75% LTV limit of $600,000:
| % Of Condo’s Price | Singapore Citizen | Permanent Residents (PRs) | Foreigners | |
| LTV Limit | 75% | $600,000 | $600,000 | $600,000 |
| Outstanding Condo Downpayment | 25% | $200,000 | $200,000 | $200,000 |
| Minimum Cash Downpayment | 5% | $40,000 | $40,000 | N/A |
| Stamp Duty (BSD + ABSD Combined) | N/A
| $18,600 | $58,600 | $258,600 |
| Total Condo Downpayment (Cash + CPF) | N/A | $218,600 | $258,600 | $458,600 |
| How Much Cash You Need to Hand (Upfront Cost) | N/A | $58,600 | $98,600 | $458,600 |
As you can see, while a minimum cash downpayment is not required of foreigners, the 30% rate of Additional Buyer’s Stamp Duty means the overall straight-up cost for foreigners purchasing a property is much higher. PRs must pay ABSD too, but the 5% rate charged makes it a little easier for PRs to maintain housing affordability. That said, if you’re a Singapore citizen, you will pay Buyer’s Stamp Duty BSD only, and therefore get to enjoy the best property BSD rates.
Can I Use CPF to Pay My Condo Down Payment?
Yes, it’s perfectly okay to use your CPF funds toward downpayments. That said, you’ll need to be very understanding of the fact that these funds must only originate from your Ordinary Account or “OA”.
As we have briefly already mentioned, SG citizen condo buyers will need at least $160,000 in their CPF OA as well as $58,600 cash in hand in order to purchase our hypothetical $800,000 private condo. Let’s take a look at how this would work.
Paying for a Condo Downpayment Using Cash in Hand + CPF
So, funding a downpayment for a condo can be achieved via a combination of CPF OA funds and hard cash, but how?
Our scenario requires a $200,000 total downpayment, $40,000 of which must be paid as a minimum downpayment – which you would need to pay in cash. Despite this, you are completely free to pay the remaining 20% (or $160,000) using your CPF OA if you have amassed enough in CPF savings to do this.
If not, however, you will need to pay for your resale condo downpayment or executive condominium downpayment using an alternative payment method which, in theory, would need to be cash.
Typical Home Loan Monthly Repayment Costs
Home loans are the predominant way Singaporeans tend to fund the purchase of a new home or property because, let’s face it, with the market value of city state residential properties always on the rise, few of us have enough spare cash set aside to buy an executive condominium outright.
Home buyers should familiarize themselves with the loan process and what they’ll need to pay monthly in terms of repayment costs and interest. Once your downpayment for a condo has been settled, you’ll need to handle any outstanding home loans payments, which could look something like this for a typical first-time buyer, assuming you are using a mainstream bank loan:
| Bank | Monthly Repayment Cost | Bank Interest Rates (For the First Year) | Home Loan Lock-In Period |
| Standard Chartered 3M SORA | $2,750 approx. | 0.93% | 2 years |
| DBS 3M SORA | $2,750 approx. | 0.93% | 3 years |
| Maybank 3M SORA | $2,750 approx. | 0.93% | 1 year |
| HSBC 1M SORA Smart Mortgage | $2,752 approx. | 0.97% | 2 years |
| OCBC 1M SORA | $2,752 approx. | 0.97% | 2 years |
One alternative to taking out a traditional bank loan is to instead borrow from a licensed moneylender in Singapore. Licensed moneylenders offer a range of competitive home and personal loans, which can help you out with the purchase price of a condo, or even fund your initial condo deposit if you need extra cash up front for your condo downpayments.
Moneylenders also typically offer faster approval processes than banks, meaning you can access the money you need much more quickly, too. Try out Loan Advisor’s moneylender loan comparison service now.
Other Costs Besides Condo Downpayment – Purchase Price, Buyer’s Stamp Duty and More
As you should already be aware by now, your condo downpayment isn’t everything when it comes to buying a condo in Singapore – you also need to think about the various other costs and expenses involved, from eventually covering your property’s entire purchase price via your home loan repayments, to making sure you’ve settled your stamp duty and other bills before making your downpayment.
The key costs you’ll need to cover, include:
Your Minimum Cash Downpayment
Don’t forget that this needs to be paid upfront in cash from your bank account – and is one of the biggest expenses you’ll need to cover from the outset.
Your Outstanding Condo Downpayment
This remaining amount can be covered using a combination of CPF funds and cash, making it a little less of a financial shock for those who’ve been saving for a long time.
Purchase Price of the Property
Remember, your LTV limit means that you’re initially only actually buying a percentage of your home. Over the course of your mortgage loan tenure, you’ll then be slowly paying off the full purchase price of your property until you’re eventually in a position where you can own your home mortgage-free. Obviously, if you’ve bought your condo in Singapore using cash in full from day one, this no longer applies.
Stamp Duty Costs
Whether you’re a Singapore citizen footing the bill solely for BSD, or a PR or foreigner who’s required to shell out a little extra for ABSD, everyone purchasing private property in Singapore is required to pay stamp duty – and you must clear this bill before paying your condo downpayment.
Other Charges and Fees
These include things like legal costs, real estate fees and any other charges home buyers might need to settle as part of the property purchasing process.
Frequently Asked Questions (FAQs) About Condo Downpayment
Let’s take a look at some common frequently asked questions (FAQs) regarding home purchases and condo downpayments in Singapore:
1. How is Stamp Duty Calculated in Singapore?
The amount you are charged in stamp duty is dependent on numerous factors, including your residency status and the market value or price of the property you are purchasing. For buyer’s stamp duty, Singaporean citizens will pay 1% on the first $180,000, 2% on the next $180,000 and 3% on the next $640,000. You can calculate what stamp duty costs might look like for you personally on the IRAS website here.
2. What Does an Average Condo Cost in Singapore?
Property prices in Singapore can vary considerably. While a two-room Flexi HDB BTO flat could cost as little as $90,000 to $100,000 if located on a non-mature estate, private condominiums can range anywhere from $700,000 to $2 million depending on size, location, and other factors.
3. Is a Condo Cheaper Than a HDB Flat?
At the time of writing, the average condo typically costs three times as much as a HDB flat in terms of price per square foot or “PSF”. That said, delays in the construction of HDB projects in Singapore caused by the COVID-19 pandemic have resulted in huge increases in condo popularity in recent years.
4. How Much CPF Can I Use When Buying a Condo in Singapore?
The amount of CPF you can use depends ultimately on how much you’ve saved. Singaporeans can expect to fund around 20% of the price of their condo using their CPF, but obviously this will differ on a case-by-case basis.
5. Is Renting Out a Condo a Good Investment?
Condos can be easily transformed into rental properties and if your apartment has a desirable location, it can be relatively easy to find a tenant and generate income through renting out your property.
6. What is a Good LTV Limit?
Here in Singapore, an LTV ratio of 80% or more is generally considered to be a high LTV, while LTVs above 95% might even sometimes be deemed “unacceptable”. Typically, an LTV of 75% or less is considered a good LTV.
7. What is the Stamp Duty Rate for Foreigners Buying a Condo in Singapore?
Foreigners need to pay higher stamp duty rates than citizens and PRs in Singapore, due to rules regarding Additional Buyer’s Stamp Duty or “ABSD”. The current corresponding tax rate for ABSD for foreigners at the time of writing is 30%.
8. How Much Money Can I Borrow from a Licensed Moneylender in Singapore?
If you’re looking to top up your financial reserves with a personal loan to help you pay your condo downpayment or cover any other costs, licensed moneylenders in Singapore can usually lend you up to 10 times your monthly salary.
Condo Downpayment – How Much Cash Do You Really Need?
Buying a condo in Singapore is complicated, and it’s important to do your research before you get started. The amount you’ll pay as a condo downpayment when purchasing a condo in Singapore is influenced by numerous factors, and it’s important to understand these before you start shopping around for a new home in the city state. Most importantly, home buyers need to keep in mind, that:
- How much downpayment and upfront cost you’ll need to cover will depend on your Singapore residency status, the purchase price of your desired property, your LTV limit, stamp duty, loan tenure and other factors.
- When purchasing residential properties, you can fund your downpayment for a condo using a combination of CPF savings and cash, though any CPF funds must come from your OA and important limitations apply.
- When determining affordability, it’s important to consider legal fees, real estate agent costs and the fact that you’ll ultimately need to pay off the full price of purchasing your property via monthly home loans repayments in the long run.
- Licensed moneylenders offer competitive personal loan packages and other financial products that can lend a helping hand in the form of fast cash if you need additional money to fund a condo downpayment.
Loan Advisor likes to keep readers updated on the latest financial and loan-related news. You can also use Loan Advisor to compare home loans and personal loans offered by trusted licensed moneylenders. Find a loan with efficient processing, good customer service, and affordable monthly costs now using our loan comparison service.
