Financing Guide: 8 Essential Steps for a Smart Purchase
Before you commit to a property, we encourage you to clarify three things: the monthly repayments you can comfortably sustain, the financing available to you, and the cash and CPF savings you will need.
Our approach is to help you understand these commitments early, so you can assess your options with a clearer budget.
Step 1: Set a comfortable monthly budget
We begin with your household income, regular expenses, existing debts, family commitments and savings goals.
Our view: A suitable property budget should leave you room for everyday living, unexpected expenses and changes in income. Your maximum approved loan may be higher than the amount you feel comfortable servicing.
Our starting question is: “What monthly repayment can you sustain comfortably?”
Step 2: Identify your available cash and CPF savings
We help you organise your potential funding into three categories:
Available cash.
CPF Ordinary Account savings eligible for housing.
Net proceeds expected from selling your existing property.
CPF housing usage is subject to applicable limits and conditions, including the property’s remaining lease. Your account balance alone does not establish how much you can use.
We encourage you to confirm your usable CPF amount with CPF Board before finalising your budget.
If your purchase depends on a sale, we also help you coordinate the timelines with your lawyer and lender. For planning purposes, we distinguish between money available now and proceeds expected later.
Step 3: Obtain an early financing assessment
For an HDB purchase, we recommend applying for your HDB Flat Eligibility (HFE) letter early. It sets out your eligibility to buy a flat, receive CPF housing grants and obtain an HDB housing loan, including the relevant amounts. You must have a valid HFE letter before obtaining an Option to Purchase for a resale flat.
For bank financing, we encourage you to seek an In-Principle Approval (IPA) before making a financial commitment. Ask your lender to explain its validity, assumptions and outstanding conditions.
Our approach: We treat an initial assessment as a planning reference. Before you proceed, confirm the financing available for your chosen property and the requirements for a formal loan offer.
Step 4: Understand the limits on your borrowing
We help you understand three key measures that affect housing financing.
Total Debt Servicing Ratio — TDSR
For bank property loans, the general TDSR threshold is 55% of gross monthly income. It includes the proposed housing loan repayment and other monthly debt obligations, subject to applicable assessment rules and exemptions.
Mortgage Servicing Ratio — MSR
The MSR cap is 30% of gross monthly income for HDB flats and Executive Condominiums where the EC’s minimum occupation period has not expired.
HDB housing loans are subject to MSR. Bank loans for properties within this scope are generally subject to both MSR and TDSR.
Loan-to-Value — LTV
LTV limits the loan amount relative to the property’s value.
For a residential bank loan, a borrower with no outstanding housing loans may qualify for an LTV limit of up to 75%. A lower limit can apply depending on age and loan tenure. Approval remains subject to the lender’s assessment.
Our view: These limits help establish your borrowing ceiling. We also consider whether the resulting repayments fit your household budget and longer-term plans.
Step 5: Work out the upfront funding required
Once you have an indicative loan amount, we help you estimate the remaining funds needed.
Our checklist includes:
Down payment, including any compulsory cash portion.
Buyer’s Stamp Duty and any applicable Additional Buyer’s Stamp Duty.
Legal and valuation fees.
Any purchase-price amount above the valuation used for financing.
Renovation and moving expenses.
An emergency reserve.
Illustration: Assume you buy a property for S$1,000,000, its accepted valuation is also S$1,000,000, and your bank approves a 75% loan.
| Component | Illustrative amount |
|---|---|
| Bank loan | S$750,000 |
| Balance of purchase price | S$250,000 |
| Minimum cash portion under the standard 75% LTV rules | S$50,000 |
| Remaining balance payable using eligible CPF savings and/or cash | S$200,000 |
The standard minimum cash down payment at 75% LTV is 5%.
This example excludes stamp duties and other expenses. A lower valuation, smaller approved loan or insufficient usable CPF savings would increase the cash you need.
Step 6: Compare the full loan package
We encourage you to compare the overall terms of each loan package alongside its advertised interest rate.
With your lender, review:
Whether the interest rate is fixed or floating.
How long any fixed rate applies and what happens afterwards.
The lock-in period.
Fees for early repayment, refinancing or cancellation.
Conditions attached to subsidies or rebates.
A fixed rate provides interest-rate certainty during the fixed period. A floating rate may change according to its reference rate and the package terms.
If you qualify for HDB financing, we also encourage you to compare it with bank financing. Once you take a bank loan for your flat, you cannot refinance that loan into an HDB housing loan.
Our view: The more suitable package depends on your cash flow, need for repayment flexibility and plans for the property.
Step 7: Test your monthly repayments
We encourage you to explore different loan amounts, repayment periods and interest rates using our Mortgage Calculator with Amortization Schedule.
The amortization schedule estimates how each payment is divided between interest and repayment of the amount borrowed.
Our approach: We suggest testing whether your budget remains manageable if interest rates rise or household income falls. For an investment property, we also consider periods without rental income.
Calculator results are estimates. Confirm your actual repayment schedule and loan terms directly with your lender.
Step 8: Confirm the payment timeline before committing
We help you organise the next steps with your lender and conveyancing lawyer.
Before you sign or pay, we encourage you to confirm:
Your approved financing and any outstanding conditions.
The cash and CPF amounts required at each stage.
Deadlines for deposits, stamp duties and completion.
When loan funds and CPF savings will be available.
Any insurance requirements.
How your sale and purchase timelines fit together, if you are upgrading.
Our aim is to help you understand both the total funding required and when each payment is due.
Let’s plan your next property purchase
Share your preferred property type, approximate budget and intended buying timeline with us. We can help you organise your next steps and identify the financing questions to confirm with your lender.
Disclaimer
This website is independently managed by Albert Leow (CEA Reg. No. R012699G), a registered real estate salesperson with Huttons Asia Pte Ltd, and is not the developer’s official website.
All information, including project details, prices, floor plans, images and availability, is provided for general reference only and may change without prior notice. While reasonable care is taken to ensure accuracy, no guarantee is made regarding the completeness or reliability of the information.
Images and illustrations are for reference only. Interested buyers should verify all details against the developer’s latest official information before making any purchase decision.
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