BTO Flat Guide: Top 10 Tips for Buying an HDB BTO Flat in Singapore

Want to buy a HDB BTO flat but not sure how to start? This article is for you.

“Want to buy an HDB BTO flat together?” Some of us Singaporean millennials may be guilty of proposing to our partners in this way. In case you’re wondering, BTO stands for “Build to Order”. This means that HDB will only commence constructing these flats after the units have been booked.

Buying an HDB BTO flat can be one of the most exciting and important events of your life. In most cases, you will be applying for the HDB BTO flat with your fiance/fiancee.

Thus, the aim of this article is to help couples like you decide on the kind of BTO HDB flat to get and some important factors to consider. However, there will hopefully still be some useful takeaways that all readers can get from this article, even those applying as singles over the age of 35 or under the joint singles scheme. Without further ado, let’s dive in.

1. Eligibility for HDB BTO Flat

Citizenship and Age

Firstly, both you and your partner must be 21 years of age and fulfil some citizenship requirements. If both of you are Singapore citizens, then you would qualify.

But what happens if one of you is a Singapore citizen while the other is a Singapore permanent resident?

Not to fret, you can still qualify for a BTO flat in Singapore, as long as you pay a $10,000 premium at the time of the purchase of the flat. This may seem like a big amount initially. However, once your spouse gets his or her citizenship status or when you have a Singapore citizen child, you can apply for the additional $10,000 Citizen Top-Up Grant which reimburses you for the premium you paid initially.

For those of you who are Singapore citizens but are intending to marry a non-Singaporean and non-permanent resident (talking to those intending to cohabit with a foreign bride), you can still buy an HDB flat with your spouse. However, do note that you would only qualify for a new two-room flat in non-mature estates.

Qualifying Schemes

To buy a BTO HDB flat, you would have to fall within one of the qualifying schemes by HDB. HDB’s requires you to be part of a family nucleus and only certain kinds of relationships are recognised.

One way you can qualify is under the fiance-fiancee scheme. You and your partner simply need to furnish proof of your marriage to HDB in the form of your marriage certificate.

Interestingly, you would also fall within a family nucleus if you have a spouse (with or without children), if you have parents and/or siblings, or if you are divorced and have children under your legal custody, care and control.

Income Ceiling

There is an income ceiling, beyond which you cannot buy an HDB flat. Previously, the income threshold for families was $10,000. However, HDB, fortunately, raised the income ceiling to $12,000.

Thus, as long as you and your spouse earn less than $12,000 in total every month, you can qualify for a 3-room flat in mature estates and 4-room flats or bigger. For a 3-room flat in a non-mature estate, the income ceiling could vary. In fact, for such flats, the income cap can be $12,000 or be as low as $6,000 depending on the project.

For those of you thinking of getting a lower paying job just qualify for your HDB BTO flat, you may want to note that you have to submit your latest 3 months’ payslips to show proof of how much you are earning. If your income includes allowance, then HDB would need the latest 12 months’ payslips. Your income is determined at the time of your application for BTO and the months leading up to it.

Previous Property Ownership

New HDB BTO flats are aimed at helping couples without a property find a place to stay. Thus, there are some previous property ownership restrictions. You cannot buy an HDB BTO flat if you own a property (even if it is overseas), and have not sold this property within the last two and a half years.

Also, if you have bought a new HDB/DBSS flat or EC before or received a CPF housing grant before, you cannot buy a new flat unless you have only bought one of those properties or received one CPF housing grant thus far. In other words, a Singapore citizen can only buy an HDB flat twice in total and cannot go beyond that.

2. Balloting

Now, for one of the most important parts of the HDB BTO flat application process, the ballot. After getting more information about the new HDB flat such as the location, price, designs and number of units of flats offered from HDB InfoWEB, you can submit your flat application online using the HDB InfoWEB portal.

Following your application, HDB will conduct a ballot to determine who will successfully obtain their BTO flat. If you’re really lucky, you may get your desired BTO flat on your first bid.

Areas such as Bedok, Kallang and Bidadari (Toa Payoh) are especially hard to get. So if you manage to get a BTO flat at these places, good for you! If not, there is no cause for alarm. HDB imposes no limits on the number of times you can submit a bid. Thus, you can always keep trying.

Finally, upon getting a successful ballot, you will be invited to book a flat and to sign the agreement for lease. This is when you will actually have to pay the downpayment for your property. The actual amount differs based on the type of loan you take. For more details, please refer to the table under the section “Fees involved”.

3. Housing Loan for BTO flat in Singapore

To finance the purchase of your new flat, you are probably going to take up a loan. This is excluding those of you whose parents are sponsoring your house or you have an obscene amount of savings. For most of us though, taking a loan will help us finance the purchase of our HDB BTO flat. This will also likely be one of the biggest financial commitments of your life so it’s good to compare the options out there before making a decision.

There are 2 main options, which are an HDB loan and a bank loan, each with its own set of pros and cons. We will examine these below.

Interest Rates

The interest rates are what you will be paying each month on the loan. HDB usually requires you to pay a higher rate of interest at approximately 2.6%, as compared to the interest rates for banks, which can range from 1.6% to 2%.

How do you determine this interest rate?

For CPF, the interest rate is pegged at 0.1% above the CPF Ordinary Account interest rate. On the other hand, for banks, the interest rates are based on the SIBOR (Singapore Interbank Offered Rate) and SOR (Swap Offer Rate). Therefore, the interest rates are variable and fluctuate according to market conditions, accounting for the range of interest rates.

While it may appear that HDB loans have higher interest rates, you may choose it if you want a relatively stable and certain interest rate. If you want a lower rate of interest in the near term, bank loans may be a better option.

Loan-To-Value Ratio and Downpayment

Loan-to-value ratio. Sounds cheem right.

Actually, the concept is very not difficult. It simply is the amount that HDB or the banks are willing to lend you based on the value of your property.

For HDB, they can lend up to 90% of the valuation of the property. Conversely, banks can provide a loan of up to 80% of your flat’s value.

As a result, for HDB loans, you would have to fork out the remaining 10% of the value of the HDB flat as downpayment for the BTO flat. Accordingly, for bank loans, you would need to provide a 20% downpayment. However, you don’t need to have the necessary funds at the time of application. This because you only have to pay the downpayment when you sign your agreement for lease and this occurs after your HDB BTO flat application.

Repayment of Loan

If you wish to repay your loan early, you may incur additional penalties. Under a bank loan, you may have to pay fees of up to 1.5 per cent if you provide early repayment within the lock-in period. The reason for this is that banks want to get a certain amount of interest out of the loan.

However, if you borrow from HDB, there are no early repayment fees. You simply have to send in a notice to HDB one month in advance to let them know you would want an early redemption or discharge of the loan.

On the other hand, what if you are late in your paying your monthly instalments? You will be charged 2% above the Ministry of Finance’s average Prime Lending Rate, based on the current HDB guidelines. This is currently at 7.5% per annum. For banks, they will charge a minimum of $50 for each late repayment and the late charges can amount to 24% per annum.

4. Fees Involved

There are quite a lot of fees and costs involved in buying an HDB BTO flat and it’s easy for one to lose track of all those fees. To help you better understand the costs involved, here is a summary of the fees that you have to pay:

No.Type of FeeAmountPayable by CPF
1Application Fee$10No
2Option Fee$500 for 2-room flexi flat, $1,000 for 3-room flat and $2,000 for 4 or 5 room flat and Executive flatNo
3Downpayment10% to 20% (Depending on whether HDB or bank loan)Yes
4Stamp Duty on Agreement for Lease1% for 1st $180,000, 2% for 2nd $180,000, 3% for remainder of purchase priceYes
5Stamp Duty on Deed of Assignment (Only if you take a bank loan)0.4% of the loan amount, subject to a maximum of $500Yes
6Registration Fees$38.30Yes
7Conveyancing/Legal Fees$0.90 per $1,000 for the first $30,000, $0.72 per $1,000 for the next $30,000 and $0.60 per $1,000 for the remaining amountYes
8Caveat Registration Fees$64.45Yes
9Survey FeesRanges from $150 to $375 (Depending on type of flat)Yes
10Fire InsuranceRanges from $1.50 to $7.50 (Depending on the type of flat)No
11Home Protection Scheme/InsuranceVariable (Depending on factors such as the insured member’s age, outstanding loan amount, interest rates and coverage sought)Yes
12Renovation CostsVariableNo

5. Grants available for HDB BTO Flat

With the rising prices of HDB BTO flats, I’m sure we will all be glad to get all the financial help we can get. If you’re a first-time applicant who hasn’t received a housing subsidy from HDB before, you’re in luck. You can make us of HDB grants to help subside the cost of your HDB BTO flat.

For HDB grants, there is the Additional CPF Housing Grant (AHG) and Special CPF Housing Grant (SHG). Each of these can be up to $40,000. The actual amount you can receive depends on your average monthly household income and the timing of the sales launch. In this regard, you will be entitled to the full amount of the AHG if your household has an income of $1,500 or less a month.

On the other extreme, you may only get $5,000 of AHG if both of you earn a total of $4,500 and above monthly. The SHG would depend on the timing of the sales launch, in addition to your monthly household income. For example, applying for the sales launch after November 2015 entitles you to a higher amount of SHG than if you applied prior to that.

Some of you may be thinking of applying for an HDB BTO flat when you are still studying. But do note that either you or your partner must have worked continuously for 12 months before the BTO application. Also, that person must still be employed at the point of flat application. Thus, the ideal time to apply is if one of you has just started working while the other is studying. Then, both of you would maximise the amount of AHG and SHG subsidies that you can get.

6. Type of HDB BTO Flat to get

Should you get a 3, 4 or 5 room flat? This would ultimately be a balancing of many factors. You would have to consider if, for example, you want to have more space or would be willing to have less space for a cheaper option. Here is an extract from the HDB website about the sizes and details of the different types of flats:

7. MOP Period

For those who intend to sell their HDB in the future, you have to consider the minimum occupation period (MOP). The MOP for your HDB BTO flat is currently five years. Thus, you must stay in your BTO flat for a period of at least five years. This starts when you have collected the keys to the flat and excludes periods for which the whole flat is rented out. During the MOP, you cannot sell your unit or purchase any kind of new residential properties.

Of course, there are some exceptions. In some extreme and special cases, HDB may grant special approval for the owners to let go of their flat within the MOP. However, don’t count on this. HDB is generally strict with such approvals and will not allow homeowners to abuse the system. Nonetheless, if you are facing serious financial difficulties or are undergoing divorce proceedings, you may apply to HDB to waive the MOP.

8. No Second Thoughts

Buying an HDB BTO flat is a decision you shouldn’t take lightly. If you decide to withdraw from the purchase of your BTO flat, you’ll incur some sunk costs. The amount of charges you have to pay depends on the stage you are at for the BTO application process.

If you’ve been given an option to purchase your HDB BTO flat and you’ve paid the requisite option fee, you will forfeit your option fee. You will also be disallowed from applying for another HDB flat. This starts from the date of cancellation of your BTO and ends after a year.

However, you stand to lose even more if you’ve already signed the agreement to lease. At this point, you would likely have paid your downpayment. Thus, you would have to forfeit this amount and be banned from applying for a new flat for the next year. In addition to that, if you’ve also taken up a bank loan, you may face cancellation penalty fees as well.

There are clearly significant costs of withdrawing from your BTO completion. Thus, you and your fiancé/fiancée should be really committed to each other before applying for a new BTO flat together.

9. Investment Potential of HDB BTO Flat

Some of you may be thinking of buying a new BTO flat for its investment potential. If you intend to sell your BTO flat in the future, you will incur a resale levy. You have to pay a resale levy if you sell your subsidised flat and then buy a second subsidised flat from HDB. However, you won’t have to pay the resale levy if your subsequent purchase is a resale HDB flat, DBSS flat or private residential property.

If you still insist on selling your HDB BTO flat, it is best to do it earlier rather than later. This is because potential buyers may not be able to qualify for a bank loan if the HDB tenure is 60 years or less. Also, the government has made it clear that for most flats, the Selective En bloc Redevelopment Scheme will not apply.

This means that upon the expiry of the 99-year lease term, the government will not buy back the property from you. In other words, the value of the leasehold flat will drop to zero and the land will return to the state. Thus, potential buyers will be wary of buying flats left with shorter leases.

Read Also: 7 Things to Know for Real Estate Investing Using an Investment Property

10. Collecting Your Keys

Now, all that’s left for you to do is to wait for HDB to notify you to collect your keys. Generally, there is a waiting period of three to four years. That’s a long time. So you should start planning for your HDB BTO flat early on, especially if you intend to get married or start a family anytime soon.

Once you’ve collected your keys, it’s time to move in! And you finally get to enjoy living out of your very own HDB BTO flat.


Buying your new BTO flat in Singapore doesn’t have to be difficult. If you’ve read this article thoroughly, you’ll now know the eligibility criteria, grants available and other useful information about buying a BTO flat.

Hopefully, with this newfound knowledge and tips, you can go ahead to apply for your very own BTO flat more confidently and assuredly.


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