If you’re a first-time homeowner who can afford to wait for a BTO flat, these highly subsidised, brand-new homes offer the best bang for your buck. Here’s what you need to know about applying for a BTO flat.

1. Check your eligibility

Applicants for BTO flats have to qualify either under the Public Scheme, the Fiance/ Fiancee Scheme or the Orphans Scheme. The Public Scheme requires you to form a family nucleus either with a spouse (and your children, if any); your parents (and siblings, if any); or for divorced or widowed applicants, with children under your legal custody, care, and control. Single Singaporeans can apply for a two-room BTO flat, after they turn 35 years old.

At least one applicant must be a Singapore Citizen, with at least one other Singapore Citizen or Singapore Permanent Resident (PR). First-timer households comprising only one Singapore Citizen and one or more PR family members must pay a $10,000 premium at the point of flat purchase. However, should the spouse get his or her Singapore Citizenship, or when they have a Singapore Citizen child in the future, they can apply for the additional $10,000 Citizen Top-Up Grant.

All applicants must be at least 21 years old and meet the Average Gross Monthly Household income ceiling for the flat you intend to buy. For three-room flats, this ranges from $6,000 to $12,000. For four-room flats or bigger, the income ceiling is raised from $12,000 to $18,000 if buying with extended family members.

2. Work out your budget

Some prefer a smaller flat or one in a non-mature estate where prices are lower. Others decide to maximise their shot at buying a subsidised new flat, by booking a bigger or more expensive home in a popular location and stretching their loan tenure to its limit (25 years for HDB’s concessionary loan; 30 years for private banks). Many assume that their salary will definitely increase over the years and may ambitiously plan for a bigger loan quantum.

Always be more conservative when considering future unearned income; you never know if unforeseeable circumstances – such as illness, retrenchment or even further studies – may affect your ability to finance your loan.

Sit down with your partner and list your combined income, and current and future foreseeable expenses such as student loans, car loans (or public transport costs), insurance premiums, food and other personal expenses. Be realistic in your expectations of maintaining a particular lifestyle. After doing your sums, you’ll have a better idea of which area, or how big a flat, to target.

3. Plan for future logistic needs

Do you need to live near your parents, whether to care for them in their old age or to tap into their babysitting help? What about your kids’ future schools?

One family found themselves in such a fix. Then childless, the couple bought their BTO flat in Jurong West. They decided to enrol their children in their alma mater, a primary school in central Singapore. They relocated a little closer when the eldest child started school, but the younger one still attended a childcare centre near their old home. Over the next few years, the couple spent a fair bit of time and money commuting daily, until both kids were finally in the same school.

More tips to come in our Part 2 series of A guide to buying an HDB BTO flat for first-time homeowners.