How to Buy a House in Singapore

How to Buy a House in Singapore: A Complete Guide (2021)

The latest research suggests that almost 88% of Singapore citizens own their own home. If you’ve found yourself reading this article, you probably want to become a proud property owner yourself, right? Well, the good news is that buying property here is a very attainable goal – but the bad news is that Singapore’s property market is complex and confusing, meaning there’s a lot to get your head around if you want the buying process to go smoothly.

From stamp duty rates and mortgage loan debt obligations to average price and market value expectations, we’ll walk you through everything you need to know about buying property in Singapore. 

Whether you plan on purchasing private condominiums, landed property or a HDB Resale Flat, Instant Loan is here to help. We can also ensure you gain exclusive access to competitive home loan quotes from licensed moneylenders using our loan comparison service, too. 

Types of Properties in Singapore – From HDB Flat to Private Properties

There are several different types of private properties that Singapore Citizens and foreign permanent residents living in our great city-state can choose from when it comes to buying property. 

House hunting can be great fun, but it’s important to remember that different kinds of private property in Singapore may attract different average price and stamp duty rates – and not all real estate variants will be available to every Singapore Citizen. The table below outlines everything you need to know:

Type of Property in Singapore Who Can Buy It? Average Market Value (Price) Average Size (sqft)
HDB Flat Singapore Citizen

Singapore Permanent Resident

Singapore Citizen with Non-Resident Spouse

Must Be At Least 21 Years Old

$532,768 1,067
Private Property (Condominium or Apartment) Singapore Citizen

Singapore Permanent Resident

Foreigners (may need approval if Private Landed Property)

Must Be At Least 21 Years Old 

Can Buy as Either Single or Joint 

$1,780,051 1,053
Executive Condominium  Singapore Citizen

Singapore Permanent Resident

Foreigners

$1,467,778 1,053
Landed Property Singapore Citizen 

Singapore Permanent Resident

Foreigners (with approval)

$5,063,507 4,244

 

As you can see, there are different rules governing which types of Singapore Citizens can purchase which types of property. The buying process will also differ depending on whether you are purchasing public housing, such as a Resale HDB Flat, or private property, such as a regular apartment or executive condominiums.

You should consult with a professional property agent throughout the entire homebuying process to ensure it runs smoothly and efficiently.

 

Purchasing a Property as a Foreigner – Do The Rules Differ? 

One of the most important things you’ll need to be aware of is that the financial rules of Singapore’s property market differ depending on the type of buyer you are. For example, if you are a foreigner living in Singapore or you want to bring a home under foreign ownership, you will be required to pay different stamp duty rates to regular Singapore citizens. Singapore’s property market has two types of stamp duty you’ll need to understand, which are:

1. Buyer Stamp Duty or “BSD”

This applies to anyone who chooses to purchase property, regardless of nationality and/or Permanent Residents status. Buyer Stamp Duty or “BSD” comes at a tiered rate which is based on the market value of the property you are buying. The latest rates can be viewed here.

2. Additional Buyer Stamp Duty for Foreigners and Second Home Buyers

If you are a foreigner living in Singapore, or a citizen who intends to purchase a second or subsequent property in Singapore, you will need to pay an additional stamp duty rate on the purchase price. For foreigners, this additional rate is currently set at 20% – but the Inland Revenue Authority (IRA) may update this at any time. You can access more information about subsequent stamp duty costs and foreign ownership here

 

How Much Can You Borrow? HDB Flat and Private Property Bank Loan Compared

The amount of money you will be allowed to borrow for purchasing property in Singapore is commonly referred to as the mortgage Loan to Value or “LTV” ratio. The maximum LTV a moneylender or bank loan is willing to grant you will differ depending on which type of loan you are applying for. The key differences between bank loans and HDB Property loans are as follows:

  • Bank Loan LTV

Under most circumstances, banks will allow you to borrow an LTV of up to 80% if you are borrowing to finance the purchase of property in Singapore. 15% of the remaining amount owed can be paid via a combination of your CPF Ordinary Account Funds and cash – but at least 5% needs to be paid in cash only.

  • HDB Concessionary Loan LTV

This type of mortgage loan will usually offer customers a maximum LTV of 90%. The remaining 10% of the property value is your responsibility to pay. You will be able to pay either in cash, using your CPF Ordinary Account, or by pooling cash and CPF funds together. 

So, what does this look like in practice? As an example, let’s say you are buying a private property worth $500,000 – which you have secured at an actual purchase price of $515,000. This scenario is quite common due to competitiveness in Singapore’s property market. Under these circumstances, the $15,000 difference between the home’s value and purchase price is known as a “Cash Over Valuation” or “COV”.

If you are buying the property using a bank loan, you will be able to borrow up to 80% or $400,000 worth of the home’s $500,000 total value. You are then free to use your CPF OA monies to fund up to $75,000 (or 15%) of the overall price – but at least $40,000 will need to be paid in cash.

Conversely, if you are using a HDB Concessionary Loan, you will be able to borrow 90% or $450,000 worth of the property’s value. This could then be followed by $50,000 worth of CPF OA funds – but you’d also need to cough up the extra $15,000 COV in cash. 

 

What Affects My LTV Ratio?

Another important thing to note is that moneylenders and banks are under no obligation to give you the maximum LTV you apply for. In some cases, they might lower their upper LTV limit if they deem such a course of action to be appropriate to your situation. Depending on your financial circumstances, a lower LTV might be more desirable to you – for example, if you have a lot of money stashed away in cash savings that you wish to put toward the purchase. Here are a few common factors that could lower your LTV:

1. Any Outstanding Home Loans You Have

If you already have another outstanding home loan, your second home loan will usually be automatically capped at 50% with most lenders. If you already have two home loans, it will be capped at 40%. You should be able to pay the remaining amount using a mix of CPF OA funds and cash – but percentage requirements may vary depending on your unique situation.

2. The Length of the Remaining Lease on the Property 

If you are buying a leasehold property and the remaining lease is between 36 and 40 years, there will be a maximum cap of 60% on the LTV. If the lease is 35 years or less, many lenders will not be willing to grant you a mortgage loan at all – and you may not be able to use your CPF funds, either, so be careful here!

3. The Location and Condition of the Property

Private properties or HDB Flats that are located abroad or in locations deemed “undesirable” may be ineligible for the maximum LTV limit with some lenders. The same applies to any properties suffering from defects or considerable damages which might require expert repair or further investment.

4. Your Age and Your Desired Loan Tenure 

If you are aged 65 or above, most banks will cap your LTV to a maximum of 60%. Similarly, any loan tenures of 30 years or more will also attract a 60% LTV cap.

5. Your Credit History 

Any home buying and application process will usually include a credit check – and a low credit score could affect the maximum LTV a lender is willing to offer you. If you have a poor credit history, a good way to improve this is by repaying any loans or credit card bills in a timely manner. Click here to read more on how you can achieve a high credit score in Singapore. 

Discussing Housing Contract

How to Save Valuable Time and Money when Buying a Private Property 

Buying properties in Singapore can be a long-winded and complicated process – but there are a number of things you can do to speed up that process. We would strongly recommend:

  • Using mobile apps and loan comparison tools to compare the mortgage market
  • Visiting property market comparison sites to find your perfect property 
  • Using a trusted, professional property agent like Property Digest
  • Comparing and trying to avoid any costly maintenance fees or legal fees
  • Familiarizing yourself with Housing Development Board and IRA rules

If you’re buying property in Singapore and you want to secure a competitive, affordable mortgage loan, save time today using Instant Loan’s quick and easy loan comparison service. 

 

Frequently Asked Questions about How to Buy a House in Singapore

1. What is the Legal Age to Buy a House in Singapore?

Singapore’s property market requires homebuyers to be at least 21 years old before they will be deemed eligible to buy private properties.

2. What Does the Singapore Housing Development Board Do? 

The HDB plans and carries out any construction, upgrading, management and maintenance work required to Singaporean properties. This organization also offers HDB Property loans to people who wish to purchase public housing, such as HDB Flats or any type of Resale HDB Flat.

3. How Can a Single Person Buy a House in Singapore? 

Single property buyers can use the Singles and/or Joint Singles scheme to buy HDB Property in Singapore. That said, you will need to be at least 35 years old and must meet Singapore’s EIP and SPR quota beforehand. You should always conduct thorough research and speak to specialists in the expert and agent community to determine what home buying options are available to you and which course of action might be the best fit for someone in your unique position.

4. How Much Should I Save to Buy a House in Singapore? 

If you want to buy a property in Singapore, you will need to have saved sufficient funds to do so. Naturally, the amount you need to have saved will differ depending on the property price, the type of mortgage loan and LTV you are applying for, as well as whether you are a Singapore Citizen or foreigner. It’s also important to remember that HDB Flats, private properties and landed property all have different requirements, as we outlined earlier in this guide. What’s more, the LTV you are entitled to can vary depending on remaining lease length, property condition and location, and your age at the point of applying for your mortgage loan.

 

Final Thoughts on How to Buy a House in Singapore

There’s a lot to get your head around when it comes to buying property in Singapore. If you want to become a proud property owner, you’ll need to familiarize yourself with all the different rules governing buying a house in Singapore – and what the buying process entails for a buyer in your unique situation. You should always:

  • Use property agent websites and loan comparison tools to find loans and properties matching your unique needs. 
  • Think carefully about what type of mortgage loan might be a good fit for you
  • Determine what kind of LTV, monthly mortgage payments and debt obligations are most suitable and/or realistic
  • Calculate the loan tenure, maintenance fees and legal fees you can afford
  • Remember that property market rules and stamp duty costs can differ depending on your situation 

Here at Instant Loan, we want to help homebuyers and flat buyers get their hands on competitive mortgage loan quotes. Gain exclusive access to the best loan quotes from licensed moneylenders now using our quick and easy loan comparison service. Simply fill in a straightforward form and receive up to three free quotes in a matter of minutes.

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