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Is This Property Affordable? Here’s How You Can Tell in Singapore


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With housing prices and living costs steadily rising, determining what one can realistically afford has never been more critical. Purchasing property in Singapore, be it a HDB resale flat or a condo, is a major long-term commitment that requires careful financial planning to account for both initial and future expenses.

But owning a home here is not impossible. This guide will outline key considerations that impact your ability to purchase property in Singapore, and by understanding these factors, you can evaluate your financial readiness and find a property that fits comfortably within your budget.

Upfront Costs

Option Fee

In Singapore, an Option to Purchase (OTP) is an agreement between the homebuyer and seller.

Usually, the seller gives the buyer the choice to buy the property according to the rules written in the OTP. In exchange, the buyer pays the seller a certain amount of money called the Option Fee.

Here’s an idea of what you can expect in terms of Option Fees:

HDB Flat

TypeOption Fee (Payable in Cash)
New 2-room$500
New 3-room$1,000
New 4-room and 5-room$2,000
ResaleUp to $5,000
Up to $1,000 before signing the OTPThe balance amount when exercising the OTP

Executive Condominium (EC) or Private Property

TypeOption Fee (Payable in Cash)
New EC or Private Property5%
Resale EC or Private Property5%
1% to obtain the OTP4% when exercising the OTP
New 4-room and 5-room$2,000
ResaleUp to $5,000
Up to $1,000 before signing the OTPThe balance amount when exercising the OTP


Several factors determine the down payment amount:

  • Price of the property
  • Type of property
  • Any existing home loan
  • Tenure of the new loan
  • Loan-to-value (LTV) limit of the property

These factors are also influenced by whether the loan taken is from HDB or the bank:

HDB Loan

TypeDownpayment in CPF and/or Cash
Build To Order (BTO) Flat20% of the property purchase price
Resale Flat20% of the property purchase price
New 4-room and 5-room$2,000
ResaleUp to $5,000
Up to $1,000 before signing the OTPThe balance amount when exercising the OTP

Bank Loan

Outstanding Home LoansLTV LimitMinimum Cash Down paymentRemaining Downpayment in CPF and/or Cash
None75% or 55%5% (for LTV of 75%)
10% (for LTV of 55%)
20% (for LTV of 75%)
35% (for LTV of 55%)
145% or 25%25% (for LTV of 45%)
25% (for LTV of 25%)
30% (for LTV of 45%)
50% (for LTV of 25%)
2 or more35% or 15%25% (for LTV of 35%)
25% (for LTV of 15%)
40% (for LTV of 35%)
60% (for LTV of 15%)

The lower LTV limit will be applied if the loan tenure exceeds 30 years (or 25 years for HDB flats). The same logic applies if the loan period extends beyond the borrower’s age of 65 years.

Valuation Fee

A valuation fee is a payment made to assess the value of a home, which banks use to determine loan eligibility. Some loan packages offered by banks may cover the valuation fee as a benefit. Typically, the cost of the valuation fee ranges from $350 to $500, depending on the type of property. This fee can be paid using either cash or CPF savings.

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Legal Fee

A legal fee is paid to the conveyancing lawyer who will act as the intermediary between the seller and buyer of the property transaction. The lawyer will handle all the paperwork and communicate with the various parties involved in the transaction, including the bank, buyer/seller, their lawyers, and government authorities. The legal fee can range from $2,000 onwards depending on the property type, and private lawyers’ fees may vary.

Stamp Duty

A Buyer’s Stamp Duty (BSD) is payable for all property purchases (including HDB flats) in Singapore. The amount of tax payable depends on a set of criteria such as your residency status, and the number of properties you own. Depending on whichever is higher between the purchase price of the property and its market value, it will be used to calculate the amount of tax payable.

Purchase Price / Market ValueRates for Residential Properties
First $180,0001%
Next $180,0002%
Next $640,0003%
Next $500,0004%
Next $1,500,0005%
Remaining amount6%

An Additional Buyer’s Stamp Duty (ABSD) is applicable under the following conditions:

  1. If you are a Singaporean who already owns a residential property and are looking to buy another residential property in Singapore
  2. If you are a Singapore Permanent Resident (PR) looking to buy a residential property in Singapore
  3. If you are a foreigner looking to buy a residential property in Singapore

This ABSD was implemented as part of the 2018 cooling measures.

CitizenBuying 1st Residential PropertyBuying 2nd Residential PropertyBuying 3rd and Subsequent Residential Property
Singapore Citizen (SC)0% (no change)20% (up from 17%)30% (up from 25%)
Singapore Permanent Resident (SPR)5% (no change)30% (up from 25%)35% (up from 30%)
Foreigners buying any residential properties60% (up from 30%)60% (up from 30%)60% (up from 30%)
Entities buying any residential properties65% (up from 35%)65% (up from 35%)65% (up from 35%)

Ongoing Costs

Apart from the monthly home loan instalment which is an ongoing cost, there are some other ongoing costs you will need to take note of and factor into planning.

Maintenance fees and conservancy charges

HDB property owners will need to pay monthly service and conservancy charges to their town councils for the maintenance of their estates. The larger the flat, the higher the charges.

Private property owners of condominiums and apartments will pay monthly maintenance fees. The fees will vary for condominiums and apartments.

Property Tax and Utility Bills

The yearly property tax you need to pay is calculated using a percentage of your residential property’s annual value. The annual value represents the estimated yearly rent your residential property could generate, regardless of whether you decide to rent it out or not.

The tax payable is lower if the residential property is owner-occupied as compared to renting it out.

Mortgage Insurance

This insurance is to allow the outstanding home loan to be fully paid off in the event that the homeowners pass away or become permanently disabled.

For HDB property owners, you will be asked by HDB to purchase the Home Protection Scheme (HPS) on your HDB loan or bank loan for your property if you are using your CPF Ordinary Account (OA) savings to pay for the monthly instalments. However, exemption from this scheme is possible if you can prove to HDB that you have a separate insurance arrangement with a private insurance company.

For private property owners, you can purchase a mortgage-reducing term insurance or level term insurance with a private insurance company for this purpose.

Home Insurance

This insurance is to insure your home against fire and other insured perils.

For HDB property owners, this is compulsory as HDB has their appointed insurer to provide this low-cost fire insurance.

For private property owners, this is usually provided by the condominium’s MCST.

However, to have comprehensive home insurance, you can consider getting home contents insurance which will provide more extensive coverage such as for movable and immovable contents. Some examples are fixtures and fittings such as air-conditioning, sofa, television and refrigerator.

Read More: How To Make Your First Property Purchase

Tips to manage your ongoing costs

Refinance/reprice your home loan

If your home loan is with a bank, after the lock-in period, you can consider looking into refinancing or repricing your outstanding home loan. This can potentially save you some cost for the monthly instalments.

Review your mortgage insurance

When considering whether to refinance or reprice your home loan, you can also review your mortgage insurance to check if there are ways to bring the costs down.

Utility bills

You can consider switching providers to lock in certain tariff rates. This can potentially help to save some costs on your utility bills.

In conclusion, determining property affordability in Singapore requires a comprehensive assessment of several key factors. These include an individual’s financial capability, taking into account their income, savings and existing financial obligations. Additionally, considering the current property market trends, interest rates and loan options is crucial. Affordability also relies on the individual’s long term financial goals, such as retirement plans and potential future expenses. Ultimately, a prudent approach to property affordability involves balancing personal financial circumstances with market conditions to ensure a sustainable and suitable investment.

Should you sell your current home now and buy a new property?

Sell HDB Agent Ohmyhome

Everyone’s situation is different, so the answer to this varies. To find out whether it IS a good time for you to start a property journey, drop us a message on WhatsApp to reach any of our Super Agents.

To get an idea of your potential selling price, you can also check how much your home is valued with Homer AI. You’ll also be able to find your estimated cash proceeds and affordability for your next home.

This article was originally published on Planner Bee, your handy financial planning app! Learn more about managing your money, investments and insurance on Planner Bee’s blog.

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