You have been dating your partner for recent years and today it looks like the time to settle down. In addition to the proposals and wedding preparations, most couples will obtain a HDB BTO level even before they get married. That is to ensure they have their house ready for them to move around in by enough time they get married.
This is the dream of owning a home of your for many young families. Everyone knows that property prices have risen by a considerable amount over the past few years. Young people are receiving more and more concerned about not having the ability to afford a HDB smooth. Getting a flat may be the very first time you’ll be getting into debt.
The term “debt” scares many people and the idea of paying a regular monthly instalment for another 20-30 years is a burden. How much income should you buy a flat? Just how much loan can you take? These are some relevant questions which many young families would like to know.
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So can someone really afford a HDB smooth in Singapore? 300k. This is usually the price of the BTO 4-room level. If you can get yours at a cheaper price because of the various grants, you’ll be able to expect a lower monthly payment. If yours is more expensive, you can accordingly adjust.
30,000 in your CPF accounts, prepare to pay some in cash. You will need this amount to negotiate the first part of your property. However, you can pay 5% first when you apply for the BTO and 5% later when it is completed before you move in. This gives you more time to save up that amount. Period of loan from HDB is bound to 25 years currently.
You can’t get more than that. Previously it was 30 years but it was brought down during the cooling steps last year. HDB loan interest is fixed at 2.6% presently. Banks provide a lower interest rate however they are floating. This means the interest rates of banks changes depending on economic conditions.
A maximum of 30% of your gross regular income can get into home loan repayments currently. 900 can be used to pay for your housing loan. This is known as the Mortgage Servicing Ratio(MSR) Also take notice that housing loan repayments, after adding all your repayment commitments (student loans, credit card debts, car loans, unsecured loans, etc.), cannot surpass 60% of your earnings. This is actually the Total Debt Servicing Ratio(TDSR). All the above factors may change as the Federal government changes their casing guidelines. Info correct as at 24/02/14 as mentioned on HDB website.
4100. This is to meet the 30% requirements of the maximum gross regular monthly income that can go into a home loan repayment. Any income below that level and HDB may not grant you the loan you need. 30,000 for the deposit. 30,000. (computed based on regular monthly CPF contributions to ordinary account only.
Approximately 63.9% of total monthly CPF contribution goes to an ordinary account. 1225 regular monthly for another 25 years. 5500 to pay for all your housing loan by CPF and without cash. I hope the above information helps you in likely to purchase your first home. Disclaimer – The above calculations are based on estimation and computed using tools on HDB website. It does not reflect the actual loan that you’ll qualify. When in doubt, check with HDB or a certified financial institution. I’ve links to 16 different banks and financial institutions in Singapore to provide you the best casing loan bundle at the cheapest interest rates. Refinancing enquires are welcomed too.