Executive Condo in Singapore: How Much Downpayment Do You Need?

When buying an Executive Condominium (EC) in Singapore, a downpayment is required. Unlike an HDB flat, where you only need to make a downpayment of as little as 10%, you will need to make a downpayment of 25% when buying an EC.

According to the Monetary Authority of Singapore, the minimum cash downpayment for a condo is 5% of the purchase price, which can be paid from the CPF Ordinary Account. However, for ECs, the downpayment can only be financed by bank loans, and the Loan-to-Value limit (LTV) is 75% of the property valuation or price (whichever is lower). This means you need to fork out at least 25% from your own pocket for your EC down payment.

It’s important to note that the downpayment for an EC can be a hefty amount, especially for first-time homebuyers. This is why it’s crucial to plan and save up for the downpayment in advance. In this article, we will explore the downpayment requirements for ECs in Singapore and provide tips on how to save up for it.

How much down payment for executive condo?

The downpayment for an Executive Condominium (EC) in Singapore is typically 5% to 20% of the purchase price, depending on the stage of the purchase and the financing options chosen. The downpayment can be paid using a combination of Central Provident Fund (CPF) monies, cash, and/or bank loans. For example, the cash needed upfront for the downpayment (excluding legal fees) for an EC purchase may be around SGD $215,600, with only SGD $23,000 of the CPF monies being available for the downpayment.

First-time homeowners who are Singapore citizens or Singapore permanent residents may be eligible for a CPF grant of up to SGD $30,000, which can be used to offset the purchase price and the downpayment. It is recommended to consult with a financial advisor or a real estate agent to determine the best approach for financing an EC purchase in Singapore.

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What is an Executive Condominium?

An Executive Condominium (EC) is a type of public-private housing hybrid that is built and sold by private developers to eligible Singaporean households. ECs are designed for middle-income Singaporean families who cannot afford private condominiums but do not meet the income eligibility for Build-to-Order (BTO) flats due to the income cap.

ECs are regulated by the Housing and Development Board (HDB) and are subject to certain eligibility conditions and ownership restrictions in the first five years. After the five-year Minimum Occupation Period (MOP), ECs can be sold to Singaporeans and Permanent Residents (PRs) on the open market, just like private condominiums.

ECs offer a range of facilities and amenities that are similar to those found in private condominiums, such as swimming pools, gyms, and function rooms. They are also built to a higher standard than HDB flats and offer larger living spaces and more luxurious finishes.

However, ECs are more affordable than private condominiums, as they are sold at a lower price and are eligible for government subsidies and grants. They also offer a good investment opportunity, as their value is likely to appreciate over time, especially after the MOP has been fulfilled.

Downpayment for Executive Condo in Singapore

Buying an Executive Condominium (EC) in Singapore is a popular choice for those looking for a private condominium at a lower cost. However, purchasing an EC comes with its own set of financial considerations, including the downpayment. This section will cover the various aspects of downpayment for an EC purchase in Singapore.

Cash Downpayment

Unlike HDB flats, ECs can only be financed by bank loans. This means that the downpayment for an EC purchase must be paid in cash. The minimum cash downpayment required is 5% of the purchase price for a Loan-to-Value (LTV) limit of 75%. However, for larger units, the minimum cash downpayment required may be higher than the typical 25% ratio for a 75% LTV limit. This means that EC buyers may have to pay a larger downpayment upfront since the maximum loan amount might not be enough for the housing purchase.

Minimum Cash Downpayment

The minimum cash downpayment required for an EC purchase depends on the LTV limit and the number of properties owned by the buyer. The table below shows the minimum cash downpayment required for different LTV limits and number of properties owned:

Number of Properties OwnedLTV LimitMinimum Cash Downpayment
175% or less5%
More than 75%25%
2 or more55% or less10%
More than 55%25%

Additional Buyer’s Stamp Duty (ABSD)

EC buyers who are not Singapore citizens or permanent residents (PRs) are subject to Additional Buyer’s Stamp Duty (ABSD). The ABSD rates for EC purchases are the same as those for private condominiums. The ABSD rates are:

  • 5% for the first property
  • 15% for the second property
  • 25% for the third and subsequent properties

Home Loan

EC buyers can obtain a home loan from a financial institution, such as a bank. The loan amount is subject to the LTV limit, which is 75% of the purchase price or property valuation (whichever is lower). The interest rate for the home loan varies depending on the financial institution and the prevailing market rates.

Stamp Duty

EC buyers are subject to Buyer’s Stamp Duty (BSD) and/or ABSD. The BSD rates for EC purchases are the same as those for private condominiums. The BSD rates are:

  • 1% for the first $180,000 of the purchase price
  • 2% for the next $180,000 of the purchase price
  • 3% for the remainder of the purchase price

Buying Process

The buying process for an EC purchase is similar to that of a private condominium purchase. EC buyers must first check their eligibility and submit an application to the developer. Upon approval, the buyer must pay the option fee and sign the Option to Purchase (OTP) within 14 days. The buyer must then pay the downpayment and stamp duty within 14 days of exercising the OTP. The remaining balance can be paid through a home loan.

Conclusion

EC purchases require a significant amount of cash downpayment and stamp duty. However, they are still a popular choice for first-time home buyers and nuclear families looking for a private condominium at a lower cost. It is important to carefully consider one’s financial situation and options before making a purchase decision.