How much do you need to buy your first home in Singapore?
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PUBLISHED ONAugust 13, 2020 3:18 AMByRyan Ong
We’ve simplified the 2020 prices fo a BTO flat, resale flat, executive condominium, and private condominium in Singapore.
If you’ve been thinking about buying a flat in Singapore, you might have felt confused and overwhelmed about the fees and costs involved. In this article, we get down to brass tacks. Here’s what you realistically need in the bank to buy your first house, and what other expenses to prepare for.
Be sure to also read up on the latest Enhanced CPF Housing Grants and higher income ceilings for both families and singles looking to qualify for housing grants, which took into effect on Sept 11 last year.
How much does it cost to buy a home in Singapore?
The costs of properties can vary significantly, based on factors such as location, facilities, surrounding amenities (like MRT station) and age or condition of the unit. There will always be the occasional neighbourhood or unit in which the price is much higher or lower than the norm.
2020 property prices in Singapore
| Type | HDB BTO Flats (Non-Mature Estates)* | HDB BTO Flats (Mature Estates)* | Resale Flats^ | Executive Condominiums^ | Private Condominiums ^ |
| Studio/One-Room | – | – | – | $420,000 to $560,000 | $600,000 to $700,000 |
| Two-Room | From $89,000 | From $90,000 | – | $640,000 to $720,000 | $800,000 to $900,000 |
| Three-Room | From $177,000 | From $351,000 | $350,000 to $380,000 | $776,000 to $960,000 | $970,000 to $1.2m |
| Four-Room | From $272,000 | From $395,000 | $420,000 to $550,000 | $1.12m to $1.4m | $1.4m to $1.8m |
| Five-Room | From $350,000 | From $400,000 (2019 Average) | $520,000 to $700,000 | $1.6m to $1.76m | $2m to $2.2m |
| 3-Generation | From $355,000 | – | – | – | – |
| Penthouse | – | – | – | Usually a minimum of $1.9mn | Usually a minimum price of $3mn |
*Prices for HDB BTOs listed above are based on February 2020’s HDB Launch price list, or otherwise stated. Prices for HDB Resale, Executive Condominiums and Private Condominiums are estimates based on 2019’s price list.
Why are resale flats more expensive?
A resale flat costs more because home prices tend to appreciate over time. A resale flat also means there is no wait time (you may have to wait 3 to 4 years for a BTO flat to be finished). There may be more amenities built up around the flat, as it has been around longer.
This is also a reason why BTO flats in mature estates are more expensive than those in non-mature estates.
For resale flats, there may be a premium on top of the actual flat price. This is called the Cash Over Valuation (COV). This varies significantly in different estates, from zero COV (no premium) to large amounts like $50,000.
In extreme cases, there have been ‘million dollar flats’ resulting from sky high COVs. The current record holder is a 5-room HDB flat at Pinnacle@Duxton, which sold for a record $1.23 million in March 2020 — its COV would’ve cost at least a couple hundred thousand.
Private condominiums vs executive condominiums
The prices we listed above are for private condominiums in general. Prices will be significantly higher for condos close to Orchard (District 9), as those would be considered luxury properties.
As a general guideline, a new Executive Condominium (EC) is about 20 per cent cheaper than an equivalent private condo. This price difference falls to around 9 per cent after the Minimum Occupancy Period (MOP) of 5 years and narrows further to 5 per cent afterwards.
In short, deduct 20 per cent off the equivalent private condo price for a new EC, and 9 per cent for an EC that is at the 5-to 10-year mark.
How much cash do you need to save for your first flat?
- 5 per cent down payment in cash if you are using a private bank loan
- Legal fees
- Home Insurance premiums
- Renovation and furnishing costs
- Maintenance fees
- Property taxes
- Mortgage repayments
We can work this out in steps, using a 3-room BTO flat priced at $180,000 and a 2-bedroom private condo priced at $900,000 as our examples.
In addition to these costs, we suggest you build an emergency fund that can cover 6 months of your mortgage payments if your CPF is not already sufficient for such a provision.
1. At least 5 per cent down payment in cash
If you are using an HDB Concessionary Loan, you will need to make a down payment of 10 per cent of the purchase price or valuation, whichever is higher. The down payment can be paid from your CPF Ordinary Account (OA), in cash, or through a combination of both.
If you qualify for HDB’s Staggered Downpayment Scheme, this down payment can be split into two installments: 5 per cent to be paid during signing of agreement and another 5 per cent when collecting your keys.
If you are using a private bank loan, you will need to make a downpayment of 25 per cent of the purchase price or valuation, whichever is higher.
At least 5 per cent of this downpayment must be in cash and the remaining 20 per cent can be paid with the monies your CPF OA, in cash, or a combination of both. Note that you must use a private bank loan for ECs.
Note that this total down payment is inclusive of the option fee. The option fee is a non-refundable deposit that must be put down 2 weeks before the sale of the house. This deposit is counted as part of the down payment, once you exercise the option.
| Flat type | Option fee |
| 4/5-room and Executive flat | $2,000 |
| 3-room | $1,000 |
| 2-room Flexi flat | $500 |
For example:
In the case of a 3-room BTO flat with a price of $180,000, the down payment is $18,000. This can be from your CPF OA, in cash, or a combination of both.
In the case of a 2-bedroom private condo at a price of $900,000, the down payment is $225,000. Of this $225,000, at least $45,000 must be paid in cash.
The remaining $180,000 can be paid through your CPF OA, or a combination of your CPF OA and cash. With some discipline and careful planning, you can save money for your flat’s down payment before you turn 35.
2. Legal fees
There are legal services involved in processing the paperwork for property ownership. Examples of legal fees include:
- Stamp duty for Agreement for Lease
- Conveyancing fees
- Caveat registration fees
Stamp duty for Agreement for Lease is calculated as follows:
- First $180,000: 1 per cent
- Next $180,000: 2 per cent
- Next $640,000: 3 per cent
- Remaining amount: 4 per cent
You can also use the Stamp Duty Calculator from the Inland Revenue Authority of Singapore website to calculate the stamp duty payable for your flat purchase.
For new HDB flats, conveyancing fees are calculated as follows:
- First $30,000 of property value: $0.90 per $1,000
- Next $30,000 of property value: $0.72 per $1,000
- Remaining Amount: $0.60 per $1,000
There is no need to calculate this manually. Just enter the price of the flat in the HDB legal fee calculator.
In addition, there is a Caveat Registration Fee of $64.45 that must be paid to the Singapore Land Authority.
For our sample 3-room BTO flat with a price of $180,000, the conveyancing fee would be $121. Inclusive of the Caveat Registration Fee, this would be $181.45.
For the 2-bedroom private condo, the conveyancing fees can range between $1,100 to $3,000 depending on the bank loan rate. Note that this price varies between law firms, and you can request to use a cheaper law firm than the bank’s default choice.
If you use a mortgage broker, they will usually try to find a cheaper law firm for you.
If you use HDB’s default law firm, the conveyancing fees can be paid from your CPF. If you are using another law firm (such as one chosen by the bank), you will have to ask the firm whether fees can be paid via CPF or in cash.
For our sample condo, we will assume conveyancing fees of about $1,500.
3. Home insurance premiums
The basic fire insurance for HDB flats comes from Etiqa, and is not a significant cost ($1.50 to $7.50 depending on the size of your flat for a five-year premium).
Basic fire insurance is mandatory but only covers damage to ‘internal structures, fixtures and areas built and provided by the HDB’ due to fire, smoke and water. For a 3-room BTO flat, it is just $4.50 for 5 years.
We strongly recommend that all homeowners get a comprehensive home insurance. This insures you against damage to furniture, renovations and personal belongings.
It also covers temporary accommodation and storage costs (you will need both in the event of fire), and third-party coverage (if the fire is your fault and your neighbour’s house burns down, they might be able to hold you liable for damages).
Although the risk of damage or theft is small, you will also have to repair and refurbish the house after any disaster, and the financial cost of that is considerable.
Typical home insurance policies cost between $45 to over $700 per annum (the most expensive policies may also include accident plans, which cover you and your family in the event of an accident).
Policies for private homes cost more as compared to flats. We will assume our sample 3-room BTO flat has an insurance cost of $45 per annum, whereas our sample 2-bedroom private condo has an insurance cost of around $200 per annum.
If you are looking for a home insurance to protect your personal assets, the way to find the best home insurance is to use an insurance comparison tool. One such tool to help you find the most value-for-money home insurance is SingSaver’s latest home insurance comparison tool.
Search based on different criteria such as price, coverage and provider and say goodbye to the good old days of endless searching for price quotes from different insurers.
4. Renovation and furnishing costs
The maximum cap on most renovation loans is 6 months of your income, or $30,000. We will also assume this is the general amount spent on furnishing your unit, whether you pay it all in cash or take a loan.
Interest rates on renovation loans range from 3per cent to 5per cent per annum, so be sure to compare between banks before applying. The typical renovation loan tenure is between 3 to 5 years.
You could also consider getting a personal loan for renovations if it suits your needs better.
5. Maintenance fees
These are conservancy charges in HDB estates. You will have to check the rates with your town council, but they are generally in the range of $20 to $90 per month for Singapore citizens (reduced rates). Non-citizens pay a normal rate, which is notably higher (check with your town council for specific details).
We will assume our 3-room BTO flat has conservancy charges of $45 per month.
For condominiums, maintenance fees depend on the management council. These typically range from $200 to $350 per month, although there are cases when fees are even higher — for high-end developments with a concierge service or elaborate facilities, it is possible to see monthly costs of $400 or more.
We will assume our sample condo has maintenance fees of $250 per month.
6. Property taxes
Property taxes are determined by your home’s Annual Value (AV). The AV is the annual amount that you would get from renting out your property (check with the Inland Revenue Authority of Singapore to determine your home’s AV).
You do not need to work out the amount manually. Just use this online calculator to determine your tax rate.
For our sample three-room flat, we will assume an AV of $14,400. The tax payable would be around $512 per annum.
For our sample condo, we will assume an AV of $36,000. The tax payable is $2,240 per annum.
7. Mortgage repayments
For HDB flats, the mortgage interest rate is always 0.1per cent above the prevailing CPF OA rate. This is currently 2.6 per cent per annum.
For private property, the mortgage rate fluctuates. However, it is has been around 1.8 per cent per annum since 2008.
We will assume a 25-year loan for both our sample properties. The loan for the 3-room BTO flat is $162,000 (after down payment), and this comes to a repayment of $735 per month for 25 years.
The loan for the condo is $675,000 (after down payment). Assuming the rate stays at around 1.8 per cent, this comes to a repayment of $2,791 per month for 25 years.
Total initial cost required
| 3-Room HDB BTO flat | 2-Bedroom private condominium | |
| Selling price | $180,000 | $900,000 |
| Loan amount | $162,000 (assuming HDB Concessionary Loan and 90 per cent LTV) | $675,000 (private bank loan at 75 per cent LTV) |
| Cash and CPF downpayment | $18,000 | $225,000 |
| Legal fees | $181.45 | $1,500 |
| Home insurance premiums | $3.75 per month | $16.67 per month |
| Maintenance | $45 per month | $250 per month |
| Property tax | $512 per annum | $2,240 per annum |
| Mortgage | $735 per month | $2,791 per month |
| Monthly repayment over 25 years | $826.42 | $3,244.33 |
| Total initial cost required | $18,181 | $226,500 |
The calculations above are approximate and are subject to change without prior notice.
The initial cost of the 3-room HDB BTO flat, taking into consideration all of the above, is around $18,181 (including CPF funds used). The monthly cost you have to be prepared to pay is about $827 per month over 25 years.
The initial cost of the private condominium would be $226,500 (including CPF funds used). The monthly cost is about $3,245 over 25 years.
This article was first published in SingSaver.com.sg.
