Can you calculate the loans for purchasing a $4 million HDB shophouse?

To calculate the loan amount for a $4 million HDB shophouse, you need to consider the following factors:

Loan-to-Value (LTV) Ratio

In Singapore, the maximum LTV ratio for a property loan is typically 75% of the purchase price. This means you can borrow up to 75% of the $4 million.

Calculation

• Loan amount: 75% of $4,000,000 = $3,000,000

Down Payment

You would need to pay the remaining 25% as a down payment.

• Down payment: 25% of $4,000,000 = $1,000,000

Additional Costs

You also need to consider other costs such as Buyer’s Stamp Duty (BSD) and legal fees.

- Buyer’s Stamp Duty (BSD) for a $4 million property:
- 1% of the first $180,000 = $1,800
- 2% of the next $180,000 = $3,600
- 3% of the next $180,000 = $5,400
- 4% of the remaining $3,460,000 = $138,400
- Total BSD = $1,800 + $3,600 + $5,400 + $138,400 = $149,200

- Legal fees: These can vary but typically range from 0.3% to 0.5% of the purchase price. For simplicity, let's assume 0.4%.
- Legal fees: 0.4% of $4,000,000 = $16,000

Total Outlay

• Loan amount: $3,000,000
• Down payment: $1,000,000
• Buyer’s Stamp Duty: $149,200
• Legal fees: $16,000

Total outlay (excluding loan) = $1,000,000 (down payment) + $149,200 (BSD) + $16,000 (legal fees) = $1,165,200

So, to purchase a $4 million HDB shophouse, you would need to secure a loan of $3,000,000 and have $1,165,200 available for the down payment, BSD, and legal fees.