How much do you need to set aside for your 800K property

For many young Singaporeans, the budget for their first property would be around SGD 800K. With a 75% bank loan and using an automatic calculation of 25%, it’s easy to assume that 200K is all you need to secure your first property costing one million or under. After all, 25% of 800,000 SGD will give you 200,000 SGD. Right?

But do you know that you do not have to give 200K SGD at once to secure your flat? or that the initial payment is actually only 23% (5% Booking Fee, 15% S&P Agreement and the stamp duty of 3% (if the property is at or under SGD 1 Million)) that has to be paid first. Or that all of this initial downpayment has to follow a certain pattern where by your cash is paid first, followed by the CPF and then by your bank loan?

Here’s some additional information you will need to know so you can prepare your Cash and CPF Reserves for your first condo or property

  • Booking or Option Fee: This payment of 5% has to be paid entirely by cash (This is payable immediately upon balloting to secure your unit)
  • S&P Agreement: This payment of 15% can be paid with either cash and/or CPF and should be paid within the first 8 weeks after the payment of the booking fee
  • Stamp Duty: 1% for the first 180K, 2% for next 180K and 3% for the remaining 640K for properties which cost 1 million or less. This payment must be paid within 2 weeks of signing the S&P Agreement
  • The last section where you need to use your cash would be the foundation where 5% of 120K can be used with either Cash and/or CPF

One good thing is that, depending on the developer, the foundation section can often take between 8 – 16 months from the day of the ballot. Which means that it’s usually a good length of time to build up your CPF and Cash reserve to complete the cash and CPF portion of your home loan. From then on, everything else can be paid by your bank loan.

My next few posts would be a list of items which the bank loan does not cover, how to calculate exactly how much cash you need to have on hand for the downpayment of your property and the complete breakdown of how much you would need to pay for your bank loan throughout the building, construction and completion phase of your property. Stay tuned for that!

Disclaimer: I have checked and made sure that my information provided has been correct and verified by all available sources from the internet. If there are mistakes found, they will be corrected and credited as soon as possible and is attributable to me alone. This disclaimer also informs readers that the views, thoughts, and opinions expressed in the text belong solely to me, and not necessarily to my employer, organization, committee or other group or individual.

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