Frequent Asked Questions on Executive Condominium
Section B： Finances
1. We are 2nd timer applicants, do we need to pay resale levy for ECs?
If yes, what is the amount and is it based on my first
direct purchase HDB flat that I bought and sold years ago or
on my last resale flat.
2nd timer will need to pay
resale levy from the Westwood Residences launch (30 May 15) onwards. The resale levy is based
on the first subsidised flat (direct purchase from HBD or first resale with CPF Housing Grant) sale. See
the Table below for a summary of resale levy based on when the subsidised flat was sold.
For seller who opted to defer the payment of resale levy when their subsidised unit was sold between
19 May 1977 to 2 March 2006, there will be a compunded accrued interest onto the levy amount
that need to be paid before you can collect the keys to the EC unit.
2. Can we pay the 5% cash first for downpayment and pay the
remainder 15% with the CPF refund only after selling our flat?
No, the developer cannot wait indefinitely for you to sell your flat (see related Qn 3).
In general, you need to do your financial planning before you book an EC unit. Assuming you are
able to secure 75% bank loan, a quick rule of thumb is a minimum of 29% of purchase price in cash/CPF is
needed (see related Qn 4).
3. I have
just sold my existing HDB flat and I need to use the CPF from the sale to pay for the 15%
downpayment. When is the earliest timing that is safe for me
to book an EC without forfeiture worry?
HDB resale appointment, it is advisable to set aside 2 weeks for the fund to be returned into CPF account before
it being used again for your next purchase.
Since the earliest timeline to pay
the 15% downpayment is 9 weeks from the booking date or 3 weeks after HDB approved your application and the SPA
delivered, you can book an EC if you know your HDB resale
appointment date is not more than 7 weeks away..
are first timer applicants, both SCs, currently 32 year old, with combined household income of
$10.8k. How much cash/cpf do we need in order to buy an EC of $1.0
houehold income below $11,000, you are eligible for $20,000 CPF Housing Grant that can be used for the
- Your loan tenure eligibility is 30 years maximun; and at 75% LTV, maximum bank loan is $750,000
- Based on 30% MSR, assuming fixed monthly income stream and 30 years tenure, your estimated
bank loan is $720,000
of cash/cpf needed to purchase an EC of $1.0 million is as follows:
a. 5% booking fee
: $ 50,000 cash
b. CPF Housing Grant
: $ 20,000 CPF
(Dependent on total income)
c. Remainder 15% downpayment : $150,000 cash and/or CPF
d. Stamp Duty
: $ 24,600
(3% purchase price - $5400)
e. Legal Fees
: $ 3,000
Total within 9 wks from
OTP : $
207,600 cash/CPF (after CPF housing Grant
fund for stage payment : $ 80,000
cash/CPF (80% purchase price - bank
Total cash/CPF before bank loan : $ 287,6000 cash/CPF
5. We are first time home buyer interested in
EC. Both SCs, our age is 38, combine salary is 12k and we have about
$150K in CPF OA. So if the unit cost 1.1million dollars, and
if I max out our CPF, how much cash upfront that I need to prepare
before bank loan ?
- For houehold income up
to $12,000, you are eligible for $10,000 CPF Housing Grant that can be used for the downpayment
- At 38 years, your loan tenure eligibility is 27 years maximun; and at 75% LTV, the maximum bank loan is
- Based on 30% MSR, assuming fixed monthly income stream and 27 years tenure, your estimated bank
loan is $753,000
Do note that for cash upfront calculation, other than the CPF housing grant amount, the usage of CPF
monies is calculated backward from bank loan amount (not forward after 5% downpayment). I had done a
Excel worksheet program to help me compute these similar repititive iterations.
Below is a partial screenshot of the financing estimation report that I created for my
From the computation below, the cash needed upfront for the downpayment (exclude legal fee) is about $215,600.
Of the $150K in CPF monies, only $23,000 can be used at downpayment stage, the
remaining $127,000 had been reserved for the later stage payment.
6. I am 42 yrs and my wife is at 36 yrs old, our fixed monthly
income is 8K and 5k respectively. We bought our current 4 Rm HDB flat at
$350K and the outstanding housing loan is $100K. We have about
$120K in our CPF Ordinary Account and $150k cash. The CPF amount used
for our current housing with accrued interest is about $280K. We
looking at a EC unit that cost about $1.2 million. How is the payment
schedule and how we can afford it?
Your weighted income age is 40 yrs, and the allowable loan tenure is 25years. For $13K income at 75%
LTV and 30% MSR ruling, the estimated bank loan is $779K.
For homeowners who had not sold their exisitng HDB unit, there are 3 possible options to buy an EC
1) Buy under Normal Payment Scheme (NPS)
2) Sell existing flat before booking under NPS scheme
3)) Buy under Deferred Payment Scheme (DPS) with a Bridging Loan where the future sales proceeds from existing HDB
need to be "earmarked" against the loan shortfall.
In the first scenario,
The estimated loan shortfall to 75% LTV
limit = (75% x 1,200,000 - 779,000) = $121,000
Addtional 5% for 1st stage construction payment = (5% x
Total Additional fund needed after downpayment = $(121,000 +
60,000) = $181,000
In this case, the whole CPF monies ($120K) and partial cash ($61K) will
be reserved for the later stage payment. Hence this option can be ruled out as there are insufficient
cash on hand to pay for the downpayment of the $1.2 smillion unit.
In the second scenario, assuming the exisitng 4 Rm HDB has been
sold at $600,000 before booking. After minus the $100k outstanding loan and $40K resale
levy, there will be an addtional fund of $170K in cash and $280K in CPF for
use. The available fund after resale:
- Total Cash Available = $(150 + 210)K = $360k.
- Total CPF Available = $(120 + $280)K = $400K.
From the worksheet below, the $400K CPF monies will
be enough to cover the balance downpayment ($212,600) and the later stage payment ($181,000)
before bank loan. The cash needed will be for the option fee of
$60,000. So if the existing home was sold before booking and its sales procceed being
used, it will be enough to cover the 1.2 million unit payment at 75% bank
However, not all homeowners may be comfortable to sell their unit
beofre booking as they need to factor rental cost in the interim period before key
In the third scenario, for buying under the Deferred Payment Scheme with a Bridging Loan, there are
qualifying conditions that need to be met before Bank will help finance the purchase with a
Bridging Loan. In general, the cashfflow from future sales of existing HDB unit must not be negative
and/or the returned CPF (including accrued interest) is greater than the loan shortfall. It is best to checkout
this Bridging Loan arrangement before any booking as different Banks may have different assessment
crtieria and timeline to sell the exisiting HDB
Typically there will be a 3% cost differential between Deferred Payment Scheme (DPS) and
Normal Payment Schme (NPS) and the same $1.2 million unit will cost $1.236 million under
Assuming the current market value of existing 4 room HDB unit is $600,000,
and the Bank recognised only 80% of its value in future sales, The cashflow from future resale is as
Sale Value = 80% x $6000,000 = $480,000
Levy $ 40,000
minus CPF usage (incl accr int) $280,000
- Total Casflow from future
$70,000 >> Not a negative sales
Loan shortfall @75%
= $148,000 (75% x 1236K - $799K bank loan)
= $280,000 >> Greater than loan shortfall
From the above, the qualifying conditions (positive sales and returned CPF
greater than loan shortfall) for a Bridging Loan are met. The Bank may even extend a bigger Bridging Loan
to cover the addtional 5% ($61,800) stage payment if there are sufficient returned CPF to cover it.
In the above case, a total of $209,800 ($148,000+61,800) Bridging Loan may be extended, which will enable
the homeowner to use his existing CPF monies for the 15% downpayment stage.
From the screenshot below, with $209,800 "earmarked" to the bank, the
current $120,000 CPF monies can be used for the downpayment. In such situation, the cash component needed
to complete the booking is $158,880. This is close to the available $150,000 cash on hand. This is a
probable solution if homeowner can just stretch a little bit and prefer to sell their home closer
to TOP. .
To sum up, you can choose to book an EC unit under option 2 or 3. While option 3
cost more under the DPS, it appeal to homeowner who are not comfortable with
renting another unit in the interim period before key collection.
Our combined salary is about $9K per month. Based on current 30% MSR, we can probably stretch for a
2 Br EC unit around $800K. We have some fixed deposits, can these be pledged to increase the loan so that we
can afford a bigger unit.
In general, the loan quantum can be
increased if you have assets to pledge to the bank. The ball park estimate for a 30 years loan tenure,
every $100K incremental in loan quantum will need a secured pledging of $77K or $255K for unsecured
It is best that you speak to a bank
officer with regards to the type of assets that can be pledged and how much the loan quantum can be increased.
Back: Home Next
Next : Gallery/News