Downpayment for Condo – 5 Facts That Affect Your Purchase

Congratulations on taking the leap into purchasing private property! This is where the excitement of real estate begins.

Nonetheless, if you are buying for investment or your own stay, the process of downpayment for condo in Singapore is the same for all big-ticket purchases. 

It is important to be aware of the costs involved and have a financial plan ready when you pay the cash downpayment for condo.

This article is to help you understand how much is typically needed in the minimum down payment for Condo.

Based on various scenarios that are common to first-time homeowners or upgraders.

Please note that this is not in any way financial advice and homeowners should do their due diligence to assess their finances.

To understand the payments involved in the downpayment for Condo in Singapore, there are several factors to look at.

We will first understand the general structure of payment, explore the buyer’s residency status, and finally, look into the borrower’s loan eligibility which determines the variations of the downpayment scheme.

Generally, purchasing private property can be loosely categorized into resale and a new launch. In our first scenario, we will be basing calculations on:

• A resale property is valued and transacted at $1.5 million, bearing in mind that taxes are also based on the purchase price or valuation price, whichever is higher
• A new launch condominium selling at $1.5 million
• Singaporean homeowners in their early 30s can take up full-tenure loans of up to 30 years.

Downpayment for Condo Breakdown	Resale Condo	Building Under Construction (BUC) Condo
Option fee  Exercise Fee	1% Cash $15,000 4% Cash $60,000	5% Cash $75,000 –
Down payment for Condo	20% Cash or CPF $300,000	20% Cash or CPF $300,000
Balance Payment	75% Loan	75% Loan
Buyer’s Stamp Duty for Condo (BSD)	4% Cash first, CPF reimbursement of $44,600	4% Cash first, CPF reimbursement $44,600
Legal Fees	$2,500 to $3,000 Cash or CPF	$2,500 to $3,000 Cash or CPF
Valuation Fees	$200 to $300 Cash	N.A.
Downpayment Required (CPF + Cash) 20% deposit + BSD	$344,600	$344,600
Cash outlay 5% deposit + BSD	$119,600	$119,600

Do take note that for the simplicity of calculations, we have not included legal and valuation fees in the cash component as we assume that the sum will be easily deducted from CPF or can be easily afforded in cash.

This also does not include monthly maintenance fees which the condo’s MCST charges as it varies according to the project.

Another thing to note, these sums do not include your CPF contributions. 

If your CPF OA has, for example, S$150,000, there is a shortfall of $150,000 in the 20% down payment which must be made up in cash, bringing your cash outlay to $269,600.

In other words, your cash outlay will increase if you do not have enough in your CPF OA to cover the 20% minimum downpayment for Condo.

The payment structure for a resale or BUC is relatively similar and does not have major differences that would inconvenience a buyer.

Additional Buyer Stamp Duty (ABSD) is a stamp duty paid on your property. The cost is the higher percentage of the property’s price or valuation.

The amount of ABSD payable depends on:

• Your Citizenship or Residency
• Number of properties owned  
• Whether you are an Individual, an Entity, or a Developer

Let’s take a look at the table again, but include Singapore Permanent Residents and Foreigners.

Please note that the table is on the assumption that all buyers are purchasing their first property.

	Singapore Citizen	Singapore PR	Foreigner
Option fee	5% Cash $75,000	5% Cash $75,000	5% Cash $75,000
Down payment for Condo	20% Cash or CPF $300,000	20% Cash or CPF $300,000	20% Cash or CPF $300,000
Buyer Stamp Duty for Condo (BSD)	4% Cash first, CPF reimbursement of $44,600	4% Cash first, CPF reimbursement of $44,600	5% Cash first, CPF reimbursement of $75,000
Additional Buyer Stamp Duty (ABSD)		5% Cash first, CPF reimbursement $75,000	30% ABSD $450,000
Balance Payment	75% Loan	75% Loan	75% Loan
Total Initial Cash + CPF Outlay	$419,600	$494,600	$869,600

If you are a Singaporean Citizen and have not sold your home but purchased a second property, you need to add a 20% ABSD cash outlay into your calculations.

The additional stamp duty for Condo can be remitted if you:

• Sell off your first property within 6 months
• The second purchase is also under the same name as the first property

If you do not have intentions to sell your first home but intend to purchase a second property for investment, the above table would not apply to you.

You can also use our Additional stamp duty calculator to calculate how much ABSD you need to fork out quickly.

LTV ratio is the amount financial institutions are willing to lend to finance your property.

The higher the LTV ratio, the lesser the cash component the borrower needs to fork out.

Several factors affect LTVs but we can delve into them separately. For simplicity’s sake, LTV can be as low as 55% due to the borrower’s age.

For example, if you are 50 years old this year, in 30 years when you have finished paying the loan, you would be 80 which is past 65.

In this case, the LTV ratio is lowered, and therefore your cashout outlay and downpayment for condo are increased.

	Singapore Citizen Aged 30	Singaporean Citizen Aged 50
Option fee	5% Cash $75,000	10% Cash $150,000
Downpayment for Condo	20% CPF or Cash top-up $300,000	20% CPF or Cash top-up $300,000 15% Cash $225,000
Balance Payment	75% Loan to valuation	55% Loan to valuation
Buyer’s Stamp Duty (BSD)	4% Cash first, CPF reimbursement $44,600	4% Cash first, CPF reimbursement of $44,600
Downpayment Required (CPF + Cash) Including BSD	$344,600	$569,600
Cash outlay Deposit + BSD	$119,600	$419,600

It is more beneficial to start investing in properties as soon as you can afford them to enjoy higher loan benefits.

Below is a table to illustrate the LTV ratios when you take up subsequent housing loans:

In the gist of all these calculations, there is still a considerable sum of money to save up when purchasing a condo. 

It is more beneficial to a younger individual given the LTV limits and minimum downpayment for condo required.

Purchasing a condo is not a light decision and many homeowners pivot this decision on prudent financial planning and a forward-thinking mindset. 

We hope this article gives you a little insight into how much you should start saving up if you would like to enjoy the perks of owning private property in Singapore.

We would like to reiterate that this is not financial advice in any way and we strongly encourage readers to take into account their financial status before making any hasty decisions.