The Amount a Couple Should Earn Before Applying for a BTO in S’pore

Last Updated on 2021-01-16 , 2:26 pm

Are you ready to take the next step with your partner in life? Maybe you’ve been dating for a while, or you feel that the relationship is strong enough for you to proceed to the next step and you’ve decided that this is the one you want to spend the rest of your life with

So what else do you need to consider?

Getting an HDB flat together with your loved one.

Now, what is BTO and what are the things you should know before applying one? You’ll know more about watching this video to the end (and please subscribe to our YouTube channel for more informative videos!):

So how much do you exactly need to earn before applying for a BTO? When is the right time for you to even think of getting into your first big ‘debt’? Let us attempt to clarify on this matter with you.

For this article, we will only be talking about the amount you need to earn in order to get a $300,000 flat – the average price of a 4-room flat in a neighbourhood area like Jurong and a housing loan will be taken from HDB.

So looking at HDB policies, these are the significant amount that you’d need upfront. Let’s assume that you’d already secure the queue number and get the flat that you’ve been keeping an eye on.

Selection of flat: S$2,000 (In cash, returned to you once you have signed the sales agreement)

During the signing of the sales agreement, these are the following components you need to pay.

Selling price of flat: $300,000

Downpayment: $30,000 (10% downpayment in CPF or Cash)

Stamp Duty: $4,200 (According to Stamp Duty Calculator from IRAS)

Conveyance Fee: $218.95 (Inclusive of 7% GST, rounded up from $218.922)

Caveat Registration Fee: $64.45

Total payable (In CPF or Cash): $34,483.40

So before you even apply for a BTO, you must have $2,000 cash and $34,483.40 either in cash or CPF account. One thing to note is that the $2,000 will not be returned to you on the day you sign your sales agreement, but one month later, so make sure this $2,000 is spare cash and not something you really need to survive on.

Okay, now that we’re done with the gritty calculations, let us talk a bit about how much you really need to earn before going for BTO. Most people would think that you should only go for BTO once your job has stabilized and you have a substantial amount of money in your CPF and banks.

Is that true?

I would think so, except that you can actually take advantage of the grants given to couples who are getting their first flat.

Let’s take a look at the grants available to first-time couples – Additional Housing CPF Grant (AHG) and Special Housing Grant (SHG). Both grants operate on the basis of your monthly household income, which in this case, would mean the combined income of both you and your partner.

The amount of grant that you are eligible for will depend on the amount of income you and your partner is currently earning. Click here to check your eligibility for the housing grants.

The amount will be disbursed to you in your CPF Ordinary Account (so if you want to feel rich, just look at your CPF statements) and is extremely helpful in reducing the amount of money you need to earn before you’re able to go for BTO flats.

In my own opinion, if you or your partner is still in school, while the other has already worked for a year or more, you can also consider going for BTO if you and your partner are ready to take the next step.

There will be risks involved and it’ll be a tough few years for you and your partner but with only one income, this means that you are eligible for a higher amount of grants. Just be sure go for a flat that’s within your projected budget; meaning to say if you and your partner are only earning a total income of $4,000 per month, don’t go for Executive Condominiums or 5-room flats because you might just find yourself having a shortfall when it comes to key collection for your flat.

Last but not least, before you go for any BTO, be sure to read up on all HDB policies and make full use of the resources (calculators, Housing Loan Eligibility, Monthly Loan repayment calculator, etc) on their website before making any BTO applications.

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