Housing Resale

How Much Cash Do You Need For Your Resale Flat?

Resale Flat Cash Upfront

Last updated on June 5th, 2021

If you’re considering to buy a resale flat instead of a BTO, the costs that you need to pay will be slightly different.

The amount that you’ll need to pay in cash may be higher for a resale flat!

So how much should you be saving up for if you want to buy a resale flat?

Here’s what you need to know.

How much cash do you need to buy a resale HDB?

Here are 6 payments that you’ll need to pay in cash when buying a resale HDB:

FeeAmount Required
Deposit to SellerUp to $5,000
Initial PaymentUp to 10% of purchase price
(depending on type of housing loan)
Balance
Purchase Price
Difference between resale
price and market valuation
Resale Application
Administrative Fee
$40 – $80
Processing Fee for
Request for Value
$120
House Fire
Insurance
Depends on flat type
Caveat and Title
Search Fees
Depends on flat type

There are other fees that you may have to pay, but you can use your CPF to pay for them. This includes the Conveyancing fee which forms part of the legal fees that you’ll need to pay.

How much do you pay upfront for resale HDB?

The first fees that you’ll need to pay upfront when buying a resale flat is the ‘Deposit to Seller‘. This fee amounts up to $5,000 and is paid in 2 stages: granting of OTP and exercising of OTP. The amount that you pay will be deducted from the resale price of the flat.

There are 9 main stages of buying a resale flat:

  1. Register intent to buy
  2. Get Option to Purchase (OTP) from Seller
  3. Choose mode of financing from flat
  4. Request value of flat from HDB
  5. Submit resale application
  6. Endorse resale documents
  7. Pay resale fees online
  8. Receive approval of resale application
  9. Attend resale completion appointment

The first fees that you’ll need to pay is the deposit to the seller, when you are negotiating the Option to Purchase (OTP).

This deposit will amount up to $5,000 in total, but it can be negotiated with the seller. You may be able to pay a lower amount, especially if you do not have enough cash at hand.

The deposit is split into 2 payments:

StageAmount
Granting of OTPUp to $1,000 (as option fee)
Exercising of OTPUp to $4,999, but capped at
$5,000 – option fee paid)

For example, you may have paid $500 as your option fee during the granting of OTP. When you exercise your OTP, the maximum that you need to pay is $4,500 ($5,000 – $500).

The amount that you pay in this deposit will be deducted from the resale price that you have agreed with the seller.

What is the downpayment for resale HDB?

The downpayment for a resale HDB flat is similar to the downpayment for a BTO flat. Depending on the type of loan that you’ve taken, you’ll have to pay between 10% – 45% of your purchase price as the downpayment. A portion of this downpayment has to be paid in cash if you are taking a bank loan.

HDB terms this as the ‘initial payment‘, rather than the downpayment that you’ll need to pay for the resale flat.

However, the amount that you’ll need to pay is similar to the downpayment for a BTO flat:

Type of LoanInitial Payment
HDB Loan /
Not taking any loan
10% of purchase price
(Cash or CPF)
Bank Loan (Loan
Ceiling of 75%)
25% (minimum 5% Cash,
remaining can be Cash or OA)
Bank Loan (Loan
Ceiling of 55%)
45% (minimum 10% Cash,
remaining can be Cash or OA)

Another thing you’ll need to take note is that there is no Staggered Downpayment scheme that you can take advantage of.

The Staggered Downpayment scheme is only available if you are purchasing a new HDB flat.

A resale flat is not considered to be a new flat. As such, you can’t use this scheme to split your downpayment!

When you are looking to buy a resale flat, you’ll need to have a larger sum of cash at hand.

This is especially if you’re taking a bank loan, where you’ll need to pay at least 5% of your flat’s value in cash!

As such, you’ll need to plan out the entire process to see if you would can afford the deposit and the initial payment!

When do I need to pay the downpayment for my resale HDB flat?

The period that you need to pay the downpayment depends on the type of loan, and the mode of payment:

Type of
Loan
Payment
Method
When To Pay
HDB loan
/ No loan
CPFAfter confirmation of Financial
Plan through HDB Resale Portal
HDB loan
/ No loan
CashResale completion
appointment
Bank loanCash
and CPF
Depends on payment
schedule of bank

The resale completion appointment will usually be around 8 weeks after your resale application is accepted.

You’ll need to pay the balance purchase price at the resale completion appointment too

If the price that you’re buying the resale flat at is higher than HDB’s valuation of the house, you’ll need to pay this difference in cash.

This will occur during the resale completion appointment if you’re taking a HDB loan.

For bank loans, this depends on the bank’s schedule.

As such, this is another amount that you’ll need to pay in cash! You’ll need to have this amount ready during the time when you are ready to complete your flat purchase.

Can I use CPF to pay for resale flat?

Here are some costs of a resale flat that you will be able to pay using your CPF:

  1. Remainder of the initial payment that is not paid in cash
  2. Conveyancing fees (as part of legal fees)
  3. Monthly repayments of your mortgage loan

If you are taking a HDB loan, it is possible for you to pay the initial payment entirely with your CPF OA funds. However, you’ll need to have enough funds in your CPF first!

It is still possible to use your CPF to pay for your resale flat purchase. However, you’ll need to pay the deposit to seller (up to $5,000) in cash.

As such, you may still need to pay a higher proportion of your flat’s price in cash, compared to a BTO!

Conclusion

If you are looking to buy a resale flat instead of a BTO, the upfront costs may be higher.

This is because you’ll need to pay both the:

  1. Deposit to Seller (max $5,000 in cash)
  2. Initial payment or downpayment (10% – 45% of flat value)

Furthermore, you can’t take advantage of the Staggered Downpayment Scheme when you are making the payment. This means that you’ll need to pay the full amount upfront!

If you are taking a bank loan, a portion of the downpayment needs to be in cash too!

Buying a resale flat requires you to have more cash upfront compared to buying a BTO flat.

As such, you’ll need to carefully consider the amounts you have to save up for!


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