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Purchasing a HDB resale flat in Singapore is a major financial milestone. With average resale prices remaining elevated across popular estates, navigating the open market requires strategic planning.
Here are some of the most effective ways to lower your expenses when buying an HDB resale flat.
Handle the purchase yourself
Buyer agents in Singapore usually charge a 1% to 2% commission fee on the flat’s agreed purchase price. (And you pay GST upon transaction, too.)
On an S$700,000 resale flat, a 2% agent fee comes up to S$14,000.
Engaging a buyer’s agent offers convenience and assistance with paperwork. However, if you are willing to manage property viewings and administrative checks yourself, skipping a buyer’s agent can net you immediate savings.
How to sell my HDB without a property agent? HDB’s streamlined HDB Flat Portal guides buyers step-by-step through the transaction process. As long as you perform your due diligence, verify past transaction data, and follow standard conveyancing timelines, managing the buying process on your own is straightforward.
Use CPF Housing Grants
First-time buyers of HDB resale flats are eligible for significant government subsidies.
CPF housing grants are credited directly into your CPF Ordinary Account (OA) to reduce your flat’s purchase price or required loan.
| CPF Grant | Grant Amount |
|---|---|
| Enhanced CPF Housing Grant | Up to $120,000 for first-time families, up to $60,000 for first + second timer |
| CPF Housing Grants for Resale Flats | Up to $80,000 for first-timer buying resale |
| Top-Up Grant for resale flats | For first + second-timer who has bought resale or 2-room from HDB before |
| Proximity Housing Grant for resale | $20,000 to live nearby (4km), or $30,000 to live with your parents/ child |
| Step-Up CPF Housing Grant for resale | $15,000 for second-timers upgrading from 2-room to 3-room |
Before viewing properties, ensure you have applied for your HDB Flat Eligibility (HFE) letter, which specifies your exact grant breakdown and maximum loan entitlement.
Choose the correct home loan
HDB Loan offers a stable interest rate pegged at 2.6% p.a. (0.1% above the prevailing CPF OA interest rate). It allows a maximum Loan-to-Value (LTV) limit of 75%, and 25% downpayment can be fully paid using CPF OA funds.
Taking a “bank loan” or “mortgage” - basically home loans from the bank involves floating and fixed bank mortgage rates that changes according to the economy. You will be renewing (refinancing) your bank home loan every two years.
Commercial bank loans capped at an LTV limit of 75% require a mandatory 5% cash downpayment, with the remaining 20% covered by CPF OA or cash.
Don’t incur Cash Over Valuation (COV)
Homes with fancy features such as point-block units above the 15th floor, unblocked views, loft double volume ceilings, or locations right next to the MRT station can command a higher selling price and often incur Cash Over Valuation (COV) - that means they price their house extra extra higher than what HDB values their house to be.
If possible, forgo the fancy features, and shortlist the sensible HDB resale units instead.
- Units located on the 3rd to 6th floors are often priced significantly lower than high-floor units
- Buy non-mature, mature estates that are older (old HDB categories)
- Buy Standard flats (new HDB category)
Choose a well-maintained house
Extensive home renovations can easily cost S$50,000 to over S$100,000. Finding a flat in move-in or semi-renovated condition will save you a lot in renovation money!
Look for HDB resale flats where structural elements (like flooring and layout) are neutral and in sound condition, allowing you to avoid expensive hacking and masonry work. Likewise, old built-in carpentry can be expensive to hack and dispose of during renovation.
Ensure the plumbing, electrical wiring, window seals, and ceilings are free of water seepage or concealed defects. Fixing underlying leakage or spalling concrete later is both costly and disruptive.