Buying Your First Home
Starting out and planning for the future
1. Understand your finances
1. Understand your finances
Work out | Why? |
1. Savings in cash and CPF OA | This will help you decide how much downpayment you can put down |
2. Total monthly income | This will help you decide how much you can afford in terms of monthly mortgage. |
3. Outstanding debts |
2. Work out a budget
Check that your savings (cash and CPF OA) make up at least 30% of the home purchase price.
2. Work out a budget
Check that your savings (cash and CPF OA) make up at least 30% of the home purchase price.
This is for your downpayment, miscellaneous fees such as legal fees and stamp duty, as well as for renovations and furnishings.
2.1 Fees
Option Fee:
BTO flat: $2,000 for 4-room and larger flats , $1,000 for 3-room flats, and $500 for 2-room flexi flats.
Resale flat: Initial Option Fee payable to sellers who grant you an Option To Purchase (OTP) their flat is between $1 and $1,000. When you decide to exercise the OTP, you need to pay the seller an additional option exercise fee. The combined total of the option fee and option exercise fee is capped at $5,000. This forms the deposit of the purchase.
- Buyer Stamp Duty is computed based on the purchase price or market value of the property.
Example: If you purchase a HDB flat for $400,000, the stamp duty will be ($180,000 x 1%) + ($180,000 x 2%) + ($40,000 x 3%) = $6,600. - Legal Fees:
Also known as conveyancing fees, can range from a few hundred (HDB conveyance fees) to over $3,000 (if you engage a private lawyer). You can get an estimate of the HDB legal fees here.
2.2 Housing Grants
- Enhanced Housing Grant:
Ranges from $120,000 (if your combined income is less than $1,500) to $5,000 (if your combined income is between $8,500 to $9,000). - Proximity Housing Grant:
Resale flat buyers may also receive the Proximity Housing Grant of $20,000 when they choose to live near their parents, or $30,000 if you are staying with your parents.
2.3 Keep monthly mortgage within 30% of your combined gross salaries:
For example: If you and your partner earn a combined $7,000 a month, you should keep the monthly mortgage payment to $2,100 or lower. If you have other debt (e.g. student loans or car loans), try to keep all monthly debt repayments to be 35% of your monthly gross salaries.
2.4 Emergency Funds
Ensure you have an emergency fund of 6 to 9 months of expenses – including mortgage payments – to meet large and unexpected expenses or temporary job loss.
If you are taking a HDB housing loan, you can retain a maximum of $20,000 in your CPF OA, which helps meet the equivalent emergency fund of 6 to 9 months of mortgage payments from your CPF OA. If you are taking a bank loan, there is no restriction on how much you choose to retain in your CPF OA.
3. Choose between BTO and resale flat
Which option suits your needs and finances better?
3. Choose between BTO and resale flat
Which option suits your needs and finances better?
BTO | Resale | |
Price | Generally lower | Generally higher |
Waiting time | Longer (3-5 years) | Shorter (~6 months) |
Location | Restricted to new launches | Island-wide |
Renovation | Additional outlay, fully customised by you. | Depends on condition. |
Length of lease | 99 years | Varies, shorter than 99 years |
Financing Options | Choice of HDB or bank loan. More details below.
| Choice of HDB or bank loan. Units with shorter leases may affect how |
Minimum Occupation Period | 5 (Standard) or 10 years (for Plus and Prime)
| |
(a) If you have decided to get a BTO, choose from BTO Standard / Plus / Prime:
Standard | Plus | Prime |
Locations across Singapore. Form bulk of BTO supply so most options. | Better locations e.g. near MRT stations and town centres | Best locations in prime and central district |
Standard subsidies | More subsidies | Most subsidies |
No subsidy recovery | Subsidy recovery upon resale of flat | Higher subsidy recovery upon resale of flat |
Minimum Occupation Period (MOP) is 5 years | MOP is 10 years | MOP is 10 years |
Private property owners need to fulfill 15-month wait-out period before they are eligible to purchase the flat. | Private property owners need to fulfill 30-month wait-out period before they are eligible to purchase the flat. | Private property owners need to fulfill 30-month wait-out period before they are eligible to purchase the flat. |
b) Apply for HDB Flat Eligibility (HFE) Letter to find out:
- Whether you are eligible for new or resale HDB flat
- Whether you qualify for CPF housing grants and how much
- How much HDB loan you can take.
If you are considering taking a bank loan, you can also concurrently apply for an In-Principle Approval from the bank when you are applying for the HFE to get an indicative loan assessment.
Optional Steps
4. Decide between a HDB and bank loan.
MoneyOwl’s guidance (2025): Choose HDB Loan
4. Decide between a HDB and bank loan.
MoneyOwl’s guidance (2025): Choose HDB Loan
Comparison between choosing a HDB or Bank loan.
| HDB Loan | Bank Loan |
Interest rates | More stable rates (2.6% p.a.) | Offers fixed rates (limited period) and floating rates |
Downpayment | 25% of purchase price. Can be fully paid by CPF OA. | 25% of purchase price. At least 5% must be in cash. |
Maximum loan tenure* | 25 years | 30 years |
Flexibility for early repayments | More flexible | May incur costs or penalties. |
Choose HDB loan if you prefer more predictable and stable interest rates or if you like the flexibility of paying down your mortgage early without any penalty.
5. Decide between using CPF or Cash
When paying for your monthly mortgage repayment
5. Decide between using CPF or Cash
When paying for your monthly mortgage repayment
- Most of us would choose to use our CPF OA savings to pay the monthly mortgage, to free up our take-home pay for other expenses, and reach your life goals.
- But using cash for part or all of the mortgage payment allows you to grow your retirement fund using CPF, and you will have more flexibility in your sales proceeds if you decide to sell your flat later on. This is because you will get more of your sales proceeds in cash, as opposed to going into your CPF OA.
Do factor in an emergency fund amounting to 6 to 9 months of mortgage payments in either your CPF OA or cash in case of involuntary job loss.
6. Decide on your insurance protection for your home
Insuring against fire, content and theft etc.
6. Decide on your insurance protection for your home
Insuring against fire, content and theft etc.
(a) Home Protection Scheme (HPS)
Home Protection Scheme is available if you are using CPF or cash to pay for a HDB flat. It insures you until age 65, or when the housing loan is paid up. In the event of death, terminal illness or total permanent disability, the HPS will protect you and your loved ones from losing your home. Annual premiums are deducted from your CPF OA.
The total HPS coverage of all owners should be at least 100% of the outstanding loan by default. However, you and your co-owner(s) can increase the coverage share so that each owner is insured for up to 100% of the loan amount. That means if anything happens to any of the insured co-owner(s), the outstanding home loan will be fully paid for by the HPS.
(b) HDB Fire Insurance
HDB Fire insurance is mandatory for homeowners on HDB loans. It covers damage caused by fire to the buildings, structures, fixtures and fittings provided by HDB.
(c) Home content insurance
You can consider extending protection beyond the basic fire insurance to home content insurance. Such insurance plans are more comprehensive, and includes scenarios such as theft, burst pipes and flooding.
It also covers the cost of furniture, personal belongings, renovation, as well as costs of alternative accommodation (if your home becomes uninhabitable due to an insured event) and damages to third party property.
Such home insurance plans vary in type and provide differing levels of coverage so you can select one that is suited to your needs or preferences.
7. Work out a plan to re-build savings and long-term goals like retirement
A holistic plan considers not just the house you want today, but the life you want tomorrow
7. Work out a plan to re-build savings and long-term goals like retirement
A holistic plan considers not just the house you want today, but the life you want tomorrow
Buying a home is a major financial milestone, but it should not come at the expense of your overall financial well-being.
The first home you can call your own is important and close to your heart. It is tempting to channel most of your savings into your home, but you should consider other building blocks of financial security. This includes:
- Building an emergency fund of 6 months to meet large unexpected expenses or job loss.
- Making sure you have sufficient coverage in case of premature death or if you are diagnosed with a critical illness and can’t work. (Tip: Spend no more than 15% of income on insurance protection)
- Consistently contributing towards your retirement or long-term fund through a Pay Yourself First model, starting with at least 15% of your gross salary.
- Keep debt ratios healthy. We recommend keeping your total debt servicing ratio – or the percentage of your gross monthly income used to pay off monthly repayments including for your home – to 35%, and your non-mortgage debt ratio – the percentage of take-home income used to service all loans excluding your mortgage – to 15%.
If you find yourself “short” in any of these areas of financial health after your home purchase, re-build them as soon as possible.
8. Decide whether to take a smaller home loan or pay down on your home loan if you have excess cash
8. Decide whether to take a smaller home loan or pay down on your home loan if you have excess cash
We generally do not recommend taking a smaller home loan or paying down on your home loan if you have excess cash.
This is because housing loans are generally considered as a type of ‘good debt’. They typically come with some of the lowest interest rates in the market, are used to finance an asset that is relatively stable in value, and in many cases, appreciate over time. Owning a home early reduces the risk of having to pay more in future with housing or rent inflation.
If you have excess cash, we instead recommend maintaining your housing loan repayments and investing the cash to earn a potentially higher return.
However, if you very much prefer to be debt-free and have no intention of investing, then paying down the housing loan partially or fully may make sense for personal peace of mind – as long as you have sufficient cash or other sources of income to fall back to in case of adverse situations.
9. Estate Planning
9. Estate Planning
(a) Joint Tenancy
If you and your spouse bought the HDB flat under joint tenancy, then the right of survivorship applies. This means that when any joint owner passes away, their interest in the flat would be automatically passed on to the remaining co-owners.
(b) Tenancy-in-common
On the other hand, if you had bought the HDB flat under tenancy-in-common, each co-owner holds a separate and distinct share in the flat. When a co-owner passes away, their interest in the flat will be distributed according to their Will or to the beneficiaries in accordance with the provisions of the Intestate Succession Act. Write a simple will for free with MoneyOwl.
Growing Families
Upgrading your home
1. Assess readiness to upgrade
Check to see whether you are ready to upgrade your property
1. Assess readiness to upgrade
Check to see whether you are ready to upgrade your property
Reasons for upgrading
Growing family, better location (school zone or closer to extended family), lifestyle goals (better facilities, freehold and potential for asset appreciation).- Evaluate your financial health
Check that you have emergency funds of at least 6 months of expenses and the outstanding loans you have. - Check your property value
If you currently own a HDB, you can check the recently transacted prices of HDB flats in your area.
- Check for eligibility to sell
Whether you have met the minimum occupation period (MOP), and whether you are eligible for the next purchase – BTO, resale, executive condominium or private.
2. Do Your Sums
Consider your Total Debt Servicing Ratio and the fees/costs involved
2. Do Your Sums
Consider your Total Debt Servicing Ratio and the fees/costs involved
Budget for your new property: set a price range based on sales proceeds, CPF and cash savings, and loan eligibility.
(a) Include all costs:
Option fee:
BTO flat:
$2,000 for 4-room and larger flats , $1,000 for 3-room flats, and $500 for 2-room flexi flats.Resale flat:
Initial Option Fee payable to sellers who grant you an Option To Purchase (OTP) their flat is between $1 and $1,000. When you decide to exercise the OTP, you need to pay the seller an additional option exercise fee. The combined total of the option fee and option exercise fee is capped at $5,000. This forms the deposit of the purchase.Private property
Ranges between 1% and 5% of the purchase price.
Buyer Stamp Duty
Computed based on the purchase price or market value of the property:
Purchase price or market value of the property
Buyer Stamp Duty rates for residential properties
First $180,000
1%
Next $180,000
2%
Next $640,000
3%
Next $500,000
4%
Next $1,500,000
5%
Remaining amount
6%
So if you buy a HDB flat for $400,000, the stamp duty will be ($180,000 x 1%) + ($180,000 x 2%) + ($40,000 x 3%) = $6,600.
Legal fees
Also known as conveyancing fees, can range from a few hundred (HDB conveyance fees) to over $3,000 (if you engage a private lawyer). You can get an estimate of the HDB legal fees here.
(b)Total Debt Servicing Ratio
- Check what your Total Debt Servicing Ratio (TDSR) would be after the new mortgage. TDSR is how much of your gross monthly income is used for debt repayment.
- We recommend that you take a mortgage that allows your TDSR to be within <=35%.
(c) Loan Planning
Get an In-Principle Approval for bank loan.
(d) Use cash proceeds wisely:
For renovation or reserve a portion for longer-term goals. Also plan for CPF refunds and the impact of accrued interest.
Our TDSR guideline of <=35% is more conservative than banks, which use a maximum 55% TDSR (based on a medium-term interest rate of 4% for the mortgage for modelling). This way, you have more buffer in case interest rates go up in future.
3. Decide between upgrading to larger HDB flat or private property
3. Decide between upgrading to larger HDB flat or private property
HDB flat | Private property |
Price range generally lower – Housing grants available | Price range typically much higher – No housing grants available |
Lower monthly maintenance cost | Higher monthly maintenance cost |
May be able to choose between HDB loan and bank loan. | Only eligible for bank loan. |
99-year lease | 99-year lease or freehold |
Communal facilities | Typically includes facilities such as security, pool, gym, BBQ |
More restrictions in terms of selling and renting | Less restrictions in terms of selling and renting |
May enjoy more subsidies from Government | Possibly receive lesser government subsidies and grants |
Limited capital appreciation due to HDB policies | Higher potential for capital gain |
Review your financial situation before deciding to upgrade.
Optional Steps
4. Coordinate the sale and purchase (Buy-Sell vs Sell-Buy)
Plan the timing well
4. Coordinate the sale and purchase (Buy-Sell vs Sell-Buy)
Plan the timing well
- If you sell first, there will be lower financial stress but you may need temporary accommodation before your new home is ready.
- If you buy first, it will be a more comfortable move, but you may incur additional buyer stamp duty if you do not sell your first home within 6 months. You may also need a bridging loan to cover the gap between buying your new property and selling your existing one.
5. Review your new home loan
HDB Loan VS Bank Loan
5. Review your new home loan
HDB Loan VS Bank Loan
You can only choose a HDB loan if you are buying a HDB flat and your gross monthly household income does not exceed $14,000 for families.
MoneyOwl’s guidance (2025): Choose HDB Loan
| HDB Loan | Bank Loan |
Interest rates | More stable rates (2.6% p.a.) | Offers fixed rates (limited period) and floating rates |
Downpayment | 25% of purchase price. Can be fully paid by CPF OA. | 25% of purchase price. At least 5% must be in cash. |
Maximum loan tenure* | 25 years | 30 years |
Flexibility for early repayments | More flexible | May incur costs or penalties. |
6. Balance home upgrades with other financial goals
Avoid overspending on renovation or mortgage
6. Balance home upgrades with other financial goals
Avoid overspending on renovation or mortgage
It’s natural to be excited to plan for the renovation of your new home.
But don’t overspend: balance this spending it with longer term goals such as for your children’s tertiary education and also retirement.
Refer to MoneyOwl's rubrics on Paying Yourself First. Save or invest at least 15% of your gross salary for your longer-term goals.
7. Protection
7. Protection
With a new and potentially larger home loan, review your life insurance coverage to ensure that the sum assured is sufficient to cover the outstanding mortgage in case you pass away prematurely
You can create a MoneyOwl Account to use our Insurance Needs Analyser to get an accurate calculation of the insurance coverage based on your needs.
8. Retirement planning
8. Retirement planning
Review your retirement savings in your CPF, cash, insurance policies, and Supplementary Retirement Scheme (SRS) to ensure that you are on track for in terms of planning for your retirement finances. Be aware of how the new property will affect your cash savings for retirement.
9. Estate planning
Joint Tenancy VS Tenancy-in-common
9. Estate planning
Joint Tenancy VS Tenancy-in-common
(a) Joint Tenancy
If you and your spouse bought the new home under joint tenancy, then the right of survivorship applies. This means that when any joint owner passes away, their interest in the flat would be automatically passed on to the remaining co-owners.
(b) Tenancy-in-common
On the other hand, if you had bought the property under tenancy-in-common, each co-owner holds a separate and distinct share in the flat. When a co-owner passes away, their interest in the flat will be distributed according to their Will or to the beneficiaries in accordance with the provisions of the Intestate Succession Act.
Click below to write a simple will for free with MoneyOwl or update your will to reflect your new property.
Senior Home Owners
Monetising your home equity
1. Clarify your retirement housing goals
Stay put, downsize or unlock home equity
1. Clarify your retirement housing goals
Stay put, downsize or unlock home equity
Ask yourself if you want to :
- Stay put in your current home
- Downsize to a smaller home
- Move closer to your children
- Unlock your housing equity for retirement income
- Leave the property as a legacy for your children.
2. Assess your expenses needed in retirement and when you plan to retire
2. Assess your expenses needed in retirement and when you plan to retire
- Review your expenses to see how they compare to your expected retirement income.
- Keep track of how much you are spending each month and match it with your likely or expected retirement income, which may include your CPF payouts, retirement income insurance plan payouts and withdrawals from your savings and investments.
3. Review your CPF and cash savings, investments and drawdown plan
3. Review your CPF and cash savings, investments and drawdown plan
- As you near the CPF payout start age of 65, you can better estimate your monthly CPF LIFE payout amount and get a clearer picture of your retirement expenses.
- Use the CPF Monthly Payout Estimator to see if your CPF payouts meet your needs, and how your cash, investments and SRS savings can help provide for a higher level of retirement income.
You can also choose to delay starting your CPF LIFE payouts until age 70. For every year that you delay the start of your payouts, your CPF monthly payout increase by up to 7%.
4. Assess your home’s value
4. Assess your home’s value
Check the market value of your flat, if you have any outstanding loan, and the CPF to be refunded (including accrued interest) if you are planning to sell your home.
Click below to visit HDB site and check Resale Flat prices.
Optional Steps
5. Explore housing options
Save and invest your cash for additional retirement income
5. Explore housing options
Save and invest your cash for additional retirement income
Rightsizing
- You sell your current flat and buy a smaller one.
- If eligible, you can tap on the Silver Housing Bonus and receive a cash payout of up to $30,000 (or $40,000 from December 2025) if you top up your CPF Retirement Account with your sales proceeds and join CPF LIFE.
- Your right-sizing options include buying from the resale market, or opting for HDB’s short lease 2-room flexi flats, or community care apartments.
- Your right-sizing options include buying from the resale market, or opting for HDB’s short lease 2-room flexi flats, or community care apartments.
Lease Buyback Scheme
- You can opt for the Lease Buyback scheme if you wish to stay in your current flat but sell the tail end of your lease to HDB.
- You can sell part of your flat’s lease to HDB and choose to retain the length of lease based on the age of the youngest owner. The proceeds from selling part of your flat’s lease will be used to top up your CPF Retirement Account (RA), which will be used to provide you with monthly payouts for life under CPF LIFE.
- If eligible, you may receive an LBS bonus of up to $30,000.
Renting out a room
- If you have an alternative place to stay, or if you have unused rooms in your home, you could rent it out for rental income.
6. Estate Planning
6. Estate Planning
- In event of your untimely demise, the distribution of your assets will be determined by Singapore’s intestacy laws. This means that your estate may not be distributed according to your wishes.
- Writing a will ensures that your wishes are clearly stated and provides protection for your loved ones.
Craft your Will – consider MoneyOwl’s free Digital Will-Writing service.
