Resale HDB buying financial Plan

October 9, 2022
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Before you purchase your next home, it is always prudent for you to know what all the cost are in the purchase including the down payment, stamp duty, legal fees etc. On top of that, you need to know if you are eligible for the housing loan for the house you will be buying and if the loan amount is sufficient. In addition, do consider the final monthly instalment that you will need to commit to after purchasing the property. 

I have created a HDB financial plan template here to assist you in planning for your next flat purchase: 

(Do read the notes below to understand more on how to fill up your financial plan)

Buying Financial Plan

Buying Price 
Less Option Fees$
Less Exercise Fees$
Less COV$
Less Down Payment$
Less Grant$
Loan$

Transaction Costs

Stamp Duty$
Additional Stamp Duty$
Legal fees$
Balance property tax$
HDB valuation$
HDB registration fees$
Renovation cost$

Calculation for instalment

Loan Amount$
Loan Tenure/ yrs 
Interest Rate 
Instalment amount$

Option fees

After negotiation on the purchase price, you can place the deposit for the purchase of the flat. This deposit is called the option fees. In HDB resale transaction, the maximum amount of option fees that the seller can request from the buyer is $1,000. 

Exercise fees

This is the deposit that you need to give to the seller when you exercise your option to purchase. This deposit is called the exercise fees. The option fees and the exercise fees cannot exceed a total of $5,000. 

What is COV

COV is cash over valuation. This is the price amount above the HDB valuation amount. 

For example:

Purchase price of the flat: $500,000

HDB valuation amount: $450,000

COV (cash over valuation) : $500,000 – $450000 = $50,000

Down payment requirements

For the purchase of HDB resale flat you will be required to have the minimum of down payment for your flat. There are different type of requirements for the different kinds of loan that you are taking.

For HDB Loan: 20%

For Bank Loan: 25% (of which, 5% in cash)

Instalment calculations table

You can you calculate the amount of your monthly instalment using a mortgage calculator. 

How to know your loan amount

We strongly advice that you should find out how much loan you are eligible for before buying any HDB resale flat. You can either apply for a HLE or request for a bank loan assessment before any purchase.

SD and ABSD amount

Stamp duty and additional buyer stamp duty are cost that you must factor into your purchase. You can check out the stamp duties rate here. 

Buyer stamp duty:

https://www.iras.gov.sg/quick-links/tax-rates/stamp-duty

Additional buyer stamp duty

https://www.iras.gov.sg/taxes/stamp-duty/for-property/buying-or-acquiring-property/additional-buyer%27s-stamp-duty-(absd)

Grant

When purchasing your flat, there are housing grant available that you can use to finance your purchase. For example, family grant, proximity housing grant, enhanced CPF housing grant etc. make sure you check them out!

Upgrading fees

Do note that you may be liable to pay for HDB upgrading fees if the flat you are purchasing is undergoing Home Improvement program, lift upgrading program etc. make sure you are aware of them before putting down your deposit so you will not be shocked to find out this before the completion of your purchase. It may be too late then to back out of the purchase. Also, upgrading fees amount can be a huge difference between a citizen household and a PR household

Renovation costs

The kind of design on the flat that are purchasing may not suit your style. Most likely you may need to renovate the flat. Do account for this cost. One simple way is to check out with a renovation contractor on the estimated costs. 

Sometimes, you may think that the flat you are intending to purchase is already quite renovated, so you don’t need to prepare for this amount. However, do consider that the flat you are buying is not a brand new one, you may need to set aside some money for repairs or replacement of items, for example the replacement of Aircon, change of toilet wares etc. Plus, you may want to purchase new furniture for your new flat. All these can add to the cost of purchasing your next flat

Payment for property taxes and other costs

Before the completion of your flat purchase, you may need to repay the balance property tax for the year to the seller. Also do account for HDB registration fees and valuation fees too. Do take note of it. 

Final Note: do set aside some buffer funds 

You can add the amount of your monthly family expenses/ financial commitment together with the estimated monthly instalment of the flat you are buying. You should have at least 6 months of this total amount in your bank account. Do note that the 6 months I think should be the minimum amount. So, you may consider setting aside more.