This section gives you an overall understanding on how to do your budgeting when you intend to buy an EC. You can only use Bank Loan when buying an EC. No HDB loan is applicable here. We work with all major banks that tie up with EC.
Please contact 9846 9648 Irene Tan for more info.
With reference to the table below:
Scenario 1:
Young couple of average age 35 years old, with a combined earning income of $14,000 per month.
The estimated bank loan is $828,917 for a 30 years loan tenure.
(Note: For First Timers, they can apply for CPF Housing Grant which can be used in the budget calculation if they’re eligible for the CPF Housing Grant.)
Assuming they are buying a new EC pricing eg. $1,400,000 they can get up an estimated bank loan of $828,000.
Whatever is in the Ordinary Account of their CPF, they can be taken out to use for the Exercise fee of 15%.
Booking fee 5% = $70,000 (cash)
Exercise fee 15% = $210,000 (cpf and/or cash)
Buyer Stamp Duty = $40,600 (cash) *see formula below
The rest of the Progressive Payment is via Bank Loan’s monthly instalment which can be paid using CPF.
Note : Any shortfall from maximum bank loan and CPF usage amount will have to be paid in cash upfront when the payment is called for.
Scenario 2:
A Second-Timer buyer of average age 45 years old, with a combined earning income of $8,000 per month.
The estimated bank loan is $379,357 for a 20 years loan tenure.
They currently owns a 5-rm HDB flat that will fetch a resale value of $850,000 when they sell. They utilized about $300,000 CPF for this current flat. A few banks are able to grant them Deferred Payment Bridging loan.
Assuming they are buying a new EC pricing $1,500,000 (deferred payment pricing) they can get a bank loan of $370,000 plus they have about $150,000 CPF money.
Whatever is in the Ordinary Account of their CPF, they can be taken out to use for the Exercise fee 15%.
Booking fee 5% = $75,000 (cash)
Exercise fee 15% = $225,000 (cpf and/or cash)
Stamp Duty = $44,600 (cash)
The rest of the Deferred Payment is via Bank’s Bridging Loan and Bank’s Housing Loan. Upon TOP of the EC, so long as the couple sell off their current flat (by just showing the HDB Approval Letter and First Appointment Letter, the Bank can then disperse the Bridging Loan and the Housing Loan so that the couple can collect the keys from the developer for the EC. The couple can use their $300,000 CPF to pay off the Deferred Payment Bridging loan and CPF to pay the monthly instalment of the housing loan.
Scenario 3:
Young couple (First Timer) of average age 30 years old, with a combined earning income of $10,000 per month.
The estimated bank loan is $592,083 for a 30 years loan tenure. CPF Housing Grant of $30,000.
Assuming they are buying a new EC pricing eg. $1,400,000 they can get up an estimated bank loan of $590,000.
Whatever is in the Ordinary Account of their CPF, they can be taken out to use for the Exercise fee of 15%.
Booking fee 5% = $70,000 (cash)
Exercise fee 15% = $210,000 (cpf and/or cash)
Buyer Stamp Duty = $40,600 (cash)
The rest of the Progressive Payment is via Bank Loan’s monthly instalment which can be paid using CPF.
Note : Any shortfall from maximum bank loan and CPF usage amount will have to be paid in cash upfront when the payment is called for.
Above scenarios are common examples in terms of budgeting calculations.
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Hope this gives an understanding on how you should do a budgeting.
Please feel free to contact 9846 9648 Irene Tan for further discussion pertaining to your case.
Next Read: Resale Levy