What are the financing options for BTO?

When financing a BTO (Build-To-Order) flat in Singapore, you have several options to consider:

HDB Concessionary Loan

• This loan is offered by the Housing & Development Board (HDB) and is exclusive to Singaporean citizens purchasing HDB flats.
• Key features include a fixed interest rate of 2.6%, a loan tenure of up to 25 or 30 years, and a Loan-to-Value (LTV) limit of 85%.
• There is no early repayment penalty, and the late payment fee is relatively low at 7.5% per annum.
• You can use your CPF (Central Provident Fund) savings to pay the 15% downpayment.

Bank Housing Loans

• Bank loans offer competitive interest rates and flexibility in terms of loan packages.
• The LTV limit for bank loans is typically 75%, meaning you need to make a 25% downpayment, which can be split into 20% paid with CPF or housing grants and 5% in cash.
• Bank loans have varying interest rates and repayment terms, allowing you to choose a plan that suits your financial situation.
• There is usually a penalty for early repayment, and the interest rates can change over time.

CPF Savings and Housing Grants

• You can use your CPF Ordinary Account (CPF OA) savings to pay for the downpayment and monthly loan installments.
• There are various CPF housing grants available, such as the Enhanced CPF Housing Grant, which can help reduce the financial burden of purchasing a BTO flat.

Personal Loans

• While not recommended for the main purchase, personal loans can be used to cover additional expenses such as renovation or furnishings.
• These loans are unsecured and come with higher interest rates compared to housing loans.

Staggered Downpayment Scheme (SDS)

• For flat applications from 30 September 2022 onwards, the SDS allows you to pay the downpayment in two instalments, which can help manage your cash flow better.

It is important to evaluate your financial situation, consider the eligibility criteria, interest rates, and repayment terms before choosing the most suitable financing option for your BTO flat purchase.