Finding the HDB down payment money you need to make your first HDB down payment isn’t always easy, which is why many Singaporeans turn to a HDB loan, moneylender home loan or bank loan to make it work. Whether you’re buying a HDB BTO flat, a resale flat or an executive condo, there are numerous factors that affect your down payment breakdown – and you’re going to want to be aware of them.
First up, every would-be property owner needs to know that the purchase price, and therefore the HDB down payment cost, will vary on different types of home. If you’re looking for a HDB BTO flat, it’s also worth noting that HDB’s BTO launches have experienced numerous delays of late, spurred on by the COVID-19 pandemic and record flat application numbers.
Regardless of the type of HDB flat you desire, Loan Advisor’s HDB down payment guide contains everything you need to know. You can also read this guide on how to get a HDB loan to buy the desired HDB flat.
HDB Down Payment for BTO Flat, HDB Resale Flat & EC
The typical cost of a HDB down payment largely depends on several factors, including purchase price, type of property, the level of stamp duty you’ll incur, and whether you’re funding the purchase through a HDB or bank loan. With a HDB loan, however, you’ll always pay a minimum of 15%.
Let’s look at the different types of housing loans available and how you might be able to use your CPF Ordinary Account or CPF OA savings to lessen your upfront financial burden.
HDB Loan – Down Payment Costs
If you’re using a HDB loan to fund your purchase, then depending on whether you’re buying a smaller flat, a BTO flat, resale flat or executive condominiums, how and when you will need to pay your minimum down payment varies. This is demonstrated in the table below–
|HDB Down Payment on HDB Loan
|When You’ll Usually Need to Pay
|When You’ll Need to Pay if Using HDB’s Staggered Down Payment Scheme
|Can You Use CPF Savings?
15% of purchase price
When you sign your lease agreement
5% when signing your lease and 10% when collecting your keys
Yes, but from your CPF Ordinary Account only
15% of purchase price
Upon confirming your financial plan via the HDB Resale Portal, or at your resale completion appointment
Yes, CPF OA savings only
HDB loans cannot be used
HDB loan N/A
HDB loan N/A
HDB loans cannot be used
So, a HDB loan is a good option for Singaporeans purchasing a BTO flat or resale flat but cannot be used to fund the purchase of executive condominiums – which instead require a bank loan. But what’s the difference?
HDB Loan Vs. Bank Loans Down Payment – What’s the Difference?
- There are two different HDB down payment methods and the ultimate cost of your down payment will depend on whether you decide to take out a HDB loan or bank loan.
- A HDB loan enables you to borrow a loan to value of up to 85% of the flat price, putting up a 15% advance payment. You can potentially pay the whole thing with your CPF OA funds if you have enough money. Conversely, a bank loan requires a larger down payment, of which 5% must be paid in cash – though bank borrowers may enjoy lower interest rates.
- You can use your CPF to fund a portion of your down payment – but only if those CPF funds come from your CPF OA account. With a bank loan, you can usually make up your 25% down payment using 20% CPF OA funds and 5% cash.
When to Pay Your HDB Flats Down Payment
- As we have already demonstrated, with a HDB loan, when you’ll need to pay your minimum down payment varies depending on the type of property you’re purchasing.
- With every HDB BTO flat applies a rule that you must settle payment at the point of signing your lease. Conversely, a resale flat requires you to pay either when confirming the sale via your Resale Portal (if using your CPF OA funds), or at your resale completion appointment (if using a Cashier’s Order).
Interest Rates – HDB loan Vs. Bank Loan
If you opt for a HDB loan, you will be able to borrow a loan to value of up to 85% of the flat price, meaning your down payment can be as low as 15%. At first glance this is very attractive, but there is a downside – most HDB loan products tend to have a high interest rate of around 2.6%, whereas bank loans typically offer an interest rate of around 1.6% to 2.2%, depending on what kind of mortgage or financial plan you go for.
Bank loans generally have lower interest rates but higher downpayment requirements (usually 25%, of which 5% must be paid in cash), whereas a HDB loan offers more loan to value flexibility, but with a higher interest rate charge.
If you don’t quite have enough money for the down payment required, another alternative might be to take out a loan from a licensed moneylender instead. These loans come with competitive interest rates and faster approval times than bank loans.
HDB Down Payment for BTO Flat – is the Staggered Down Payment Scheme Worth it?
Using a HDB loan can allow you to borrow a loan to value of 80% and fund your 15% down payment through either cash or your CPF OA.
If you’re worried you don’t have enough cash for a HDB housing loan downpayment, HBD’s Staggered Downpayment Scheme can break your payments down into more easily-manageable instalments. With the HDB Staggered Downpayment Scheme, you can pay your downpayment in two tranches – 5% during lease agreement signing and 10% when collecting your keys.
Conversely, you could use a bank loan and borrow between 55% to 75% of the purchase price of your home, paying 5% up front in cash. You would then need to settle the remaining sum upon key collection using CPF. So, if you bought a $800,000 BTO flat with a 75% loan to value of $600,000, you’d essentially need to find $200,000 as a combination of CPF Ordinary Account and cash funds.
HDB Down Payment for Resale Flats – What is the Cost?
With a resale flat, you also have two different HDB down payments options. You’d again be expected to make a 15% down payment if using a HDB loan, though you’d be able to pay this by online transfer or a Cashier’s Order during your resale completion appointment – using either cash or your CPF OA.
If opting for a bank loan, you’d need to clear a much higher downpayment, this time of around 25% to 45% of the purchase price. Again, you’re free to use your CPF OA savings if you wish. That said, if the value of your bank loan amount is anywhere up to 55%, you’d need to pay 10% in cash rather than just 5%. However, the 5% rate still applies on bank loans of up to 75% loan to value.
HDB Downpayment for Exec Condo – How Much?
With executive condominiums or “ECs” the situation is a little different in that such properties are currently ineligible for HDB loans. If using a bank loan, the payment structure will be the same, though you’ll only be able to borrow between 55% and 75% of the flat price – the remainder must be covered by your CPF Ordinary Account balance.
On bank loans up to 75% loan to value, you’ll pay a downpayment of 25% (with at least 5% paid in cash). Conversely, on a bank loan of up to 55%, you’ll need to pay a 45% downpayment with 10% cash.
Stamp Duty and Additional Buyer’s Stamp Duty
Everyone will need to pay Buyer’s Stamp Duty when purchasing a flat in Singapore – and this will naturally increase your upfront costs of buying a home. You’ll pay at rates of 1% on the first $180,000 of property value, 2% on the next $180,000, 3% on the next $640,000 and 4% on any remaining amount.
As for Additional Buyer’s Stamp Duty or “ABSD”, this extra charge only applies to Singapore Permanent Residents and foreigners. PRs need to pay ABSD at an extra rate of 5%, while foreigners pay 30%.
It’s possible to pay stamp duty using CPF savings stored in your CPF OA, but stamp duty is payable on a reimbursement basis only.
Frequently Asked Questions (FAQs) About HDB Down Payments
1. How Much is the Down Payment for HDB Loan?
A HDB loan in Singapore requires you to make a down payment of at least 15% of the property’s purchase price. This can be funded by cash, CPF OA, or both combined. For HDB loan amount, the maximum loan amount you can borrow is 90% of the total property value. You’ll need to provide a 10% down payment, 5% of which you can pay in cash.
2. How Much Do You Need to Pay Upfront for a HDB Resale Flat?
This depends on the type of loan you’re using. With a HDB loan, you’d pay 15% of the purchase price in either cash or CPF. Conversely, if using a bank loan, you’d need to pay between 25% and 45%, with a 5-10% cash payment required.
3. Can I Use CPF OA Savings as HDB Down Payment Money?
Yes, but the terms dictated by different types of loans vary. While you can use as much CPF as you like to fund a HDB loan down payment, a bank loan down payment usually requires 5% (or sometimes even 10%) to be paid in cash.
4. Can I Use CPF Savings From My CPF Ordinary Account For the Down Payment on HDB Resale Flats?
The rules for down payments on HDB resale flats are largely the same as those that apply to BTO flats. You can use your CPF Ordinary Account funds when making your down payment, but banks may require you to pay 5-10% in cash depending on your loan to value limit.
HDB Down Payment Guide Conclusion – Buy Your BTO, Resale or HDB Flat Today
From the ways in which property type affects the down payment process, to coming to terms with HDB’s Staggered Down payment Scheme and the ins and outs of bank loans, there’s a lot to keep in mind when purchasing a HDB flat.
Don’t forget that:
- How much down payment you’ll need to pay and when you’ll ultimately make your payments can differ depending on whether you’re buying a BTO flat, resale flats or an EC.
- The HDB Staggered Downpayment scheme can help you split your downpayments into two – 5% during lease agreement signing and 10% upon key collection.
- You can put money from your CPF Ordinary Account toward your down payment, but while a HDB loan may let you pay the entire sum using CPF, a bank loan will require a percentage to be paid in cash.