The Building Blocks of Home – Intro / Purchasing a 3-Room BTO flat
A house is built brick-by-brick. Buying a
new home is a long term financial commitment. Do lay down the building blocks of your first
flat with care. So how do you decide what to buy as your first home? First, consider what to buy according
to your combined household income. For the various housing measures which have been implemented, a household earning $2000 can afford a 3-room flat.
Let’s take a typical 3-room flat in a non-mature estate which costs
$170,000. For this, you need a 10% down payment of $17,000, which can be financed by your
savings or CPF. Based on your household income of $2000, the Government provides an additional
CPF housing grant of $35,000. With the changes announced at the 2013 National Day Rally,
you will receive a total of $20,000 of Special CPF Housing Grant – $10,000 more than before.
In addition, NS men may also make use of their NS Recognition Award of $4,000 for their flat
purchase. The total grants and awards that you will now get is $59,000. For the remaining
amount, you require a mortgage loan of $94,000. If you decide to pay up the loan in 25 years,
your monthly instalment is $427, which can be fully paid with your monthly CPF earnings
of around $460. This means you do not have to pay any additional cash top-ups for your
flat. In short, a new house is well within your reach if you plan it right, choose a
flat within your budget and make use of the relevant Government grants. Start using these
building blocks today to realise your dream of owning a home. Visit hdb.gov.sg to find out more,
or check out the other income scenarios.