Home Loans

How To Save Money When Buying A Resale Flat

From choosing between an HDB loan or home loans, and doing proper financial planning for it, here’s your ultimate guide to getting a resale flat in Singapore.

Given the recent excessive demand for homes in Singapore, even first-time applicants are having a harder time securing a BTO flat for themselves despite the extra balloting chances given to them.

That’s when most couples, especially those who cannot wait any longer to have a home, would turn to resale flats.

Resale flats are pretty much perfect in everything — they are bigger than new BTO flats, already have well-established amenities nearby and incur a much shorter waiting time — except for one: they can be pretty pricey.

Increase in Prices Of Resale Flats in Singapore

Property prices in Singapore have always been on the rise due to the limited land space in Singapore, and this includes resale HDB flats.

Prices for resale flats saw a rapid increase from the third quarter of 2020 and they don’t seem to be coming down anytime soon.

HDB resale flat price
HDB Flash Estimate Resale Flat Price Chart

On average, the price index for resale flats increased by 2.88% over the past four quarters (2021 Q3 - 2022 Q2).

To illustrate the increase in real prices, the average price of a four-room resale flat in Ang Mo Kio was S$458,000 in Q3 2021. In Q2 2022, the average price of a same-sized flat in the same location increased to S$515,000.

Yes, we’re talking about a S$57,000 increase.

While that does not bode well for your upcoming resale HDB flat purchase, it doesn’t mean that there aren’t any substantial ways to save on your upcoming resale flat purchase.

With adequate research, careful selection of home and renovation loans, as well as adjusting your expectations, you can still save during the purchase process.

Some Ways To Save When Buying A Resale Flat

Know how long it’ll take to purchase a resale flat

Often, costs are incurred not just from the price tag of resale flats but bad planning as well.

You might be in a rush to get your loan approved because of an unexpected payment so you accept the first offer that comes along instead of the one with the best rates.

Or, you realised that you’ve sold your current residence prematurely and now need to pay more upfront costs to rent a home temporarily.

Whichever it is, the first thing you have to know is the process of purchasing a resale flat, how long it takes and when you’ll need to foot the bill.

Here’s an overview of the steps involved in the purchase of a resale flat.

StepRequirementAssociated Cost
1Register your intent to buy – you will need the particulars of all people who will stay in the flatN.A.
2Search for a suitable flat and obtain your OTP – you will need the details of the sellersN.A.
3Decide on the mode of financing – Housing Loan (HDB or bank) or full payment va CPF

If you’re taking up a HDB loan, you will need to obtain a valid HDB Loan Eligibility (HLE) letter before the seller can grant an OTP

N.A.
4Request for Value$120 (inclusive of GST)
5Submit resale applicationN.A.
6Acknowledge Resale documents – all buyers and sellersN.A.
7Pay feesLegal & Stamp-duty
8Wait for HDB ApprovalN.A.
9Attend Completion Appointment (Toa Payoh Hub)N.A.

Steps 5 to 9 can be completed in about eight weeks (two months), assuming all required documents are submitted accurately and properly.

For a quick and seamless transition, you can safely assume a three-month period required to complete the resale flat purchase from end-to-end, excluding the time required for renovation.

Don’t be too aggressive

When purchasing resale flats, there is a component every buyer should be aware of: Cash Over Valuation (COV).

When purchasing a resale flat, the buyer and seller have to come to an agreed-upon price. They will then obtain HDB’s valuation of the property.

Should the agreed-upon price be higher than HDB’s valuation of the property, the excess amount will be the Cash Over Valuation (COV) and cannot be paid for with the HDB Loan or your CPF.

Here’s an illustration of COV
Price agreed between buyer and sellerS$550,000
HDB valuation of the propertyS$500,000
Cash Over ValuationS$550,000 - S$500,000 = S$50,000

Since 2014, buyers and sellers can only obtain HDB’s valuation after obtaining the Option-to-Purchase (OTP) where the price is agreed upon.

This means that if you do not want to pay too much upfront cost, you should do your rese

Go small if location is of utmost importance

When getting a home, location might be of the utmost importance to you.

If you’re thinking of buying a resale flat closer to central Singapore, and it’s a non-negotiable, you might want to consider going small.

In a ValueChampion study conducted in March 2022, it was found that the price of 3-room resale flats have a lower variance in cost across all locations, while bigger flats, especially 5-room units, have a much bigger range.

1R2R3R4R5RExecMulti-Gen
Ang Mo KioN.A.$233,242$339,311$494,537$685,887$913,941N.A.
BedokN.A.$252,802$333,087$493,370$623,492$791,800N.A.
BishanN.A.N.A.$382,515$589,319$824,825$979,548$895,200
Bukit BatokN.A.N.A.$326,235$457,919$632,793$713,299N.A.
Bukit Merah$201,428$277.323$414,914$713,572$816,485$785,666N.A.
Bukit PanjangN.A.$276,154$344,076$456,776$566,548$686,606N.A.
Bukit TimahN.A.N.A.$412,230$636,241$863,859$1,060,937N.A.
Central AreaN.A.$273,518$435,283$866,802$1,053,599N.A.N.A.
Choa Chu KangN.A.$270,153$365,126$456,278$543,857$632,060N.A.
ClementiN.A.$335,841$385,335$649,349$757,822$863,368N.A.
GeylangN.A.$218,965$326,560$591,006$719,225$834,455N.A.
HougangN.A.$264,000$349,032$476,695$606,325$757,031N.A.
Jurong EastN.A.$273,222$337,560$446,175$567,137$758,319N.A.
Jurong WestN.A.$267,421$316,664$446,206$519,507$619,680N.A.
Kallang/WhampoaN.A.$254,833$397,117$662,765$792,819$846,000N.A.
Marine ParadeN.A.$240,000$393,496$498,802$810,222N.A.N.A.
Pasir RisN.A.$311,750$437,803$496,580$584,898$710,523N.A.
PunggolN.A.$283,077$396,238$501,268$585,119$610,369N.A.
QueenstownN.A.$276,394$405,763$762,004$925,680$1,110,000N.A.
SembawangN.A.$272,489$349,533$434,392$504,491$577,415N.A.
SengkangN.A.$289,958$392,725$486,683$556,843$627,906N.A.
SerangoonN.A.$251,666$349,527$497,239$646,846$850,604N.A.
TampinesN.A.$294,416$376,470$496,012$613,820$750,791$760,861
Toa PayohN.A.$237,568$319,987$612,014$811,606$878,432N.A.
WoodlandsN.A.$279,750$321,468$424,074$505,115$699,713N.A.
YishunN.A.$264,333$340,111$436,059$562,709$694,797$827,857
Prices accurate as of 11 Mar 2022

This means that cost-conscious couples might benefit from going small if they wish to stay in a prime location.

Check out available grants & subsidies

To purchase a resale flat in Singapore, there are a few grants available for you to utilise depending on your status.

For first-timer couples who have not enjoyed housing subsidies or taken up any grants before, they can enjoy up to S$50,000 Family Grant.

There is also a top-up grant where recipients of the Singles Grant who got married after purchasing their flats can qualify for. The caveat is they must not have enjoyed any other housing subsidies.

You can toggle open the table below for details on the Family and Top-Up Grant.

CriteriaFamily GrantTop-Up Grant
Who is it for?
  • Couples or families who are first-time applicants buying HDB resale flat
  • First-Timer Singaporean with a partner who has received housing subsidy before
  • Recipients of Singles Grant who got married after their flat purchase
  • Those who bought a 2-room or 2-room Flexi flat from HDB under the Single Singapore Citizen Scheme or Joint Singles Scheme and have been married after the flat purchase
  • Recipients of a Singles Grant who bought an HDB resale flat under the Non-Citizen Spouse Scheme and whose spouse or child has obtained Singapore citizenship or Singapore Permanent Resident (SPR) status
Citizenship
  • 1 Singapore citizen
  • 1 other Singapore citizen or Singapore PR
  • Be a Singapore citizen
  • Include your spouse or child who is a Singaporean or Singapore PR
AgeAt least 21 years oldN.A.
Household statusAt least one applicant is a first-timer who hasn’t taken a housing subsidy before
  • A recipient of Singles Grant
  • Does not have any other housing subsidies
Monthly household income ceiling
  • Not exceeding S$14,000
  • Not exceeding S$21,000 if applying with multi-generation or extended family scheme
N.A.
Ownership/ interest in property in Singapore or overseas other than HDB flat
  • Must not own or have an interest in any local or overseas private property;
  • Must not have disposed of any private property in the last 30 months before the flat application to buy a flat from HDB or resale PLH flat on the open market; and
  • Must not be buying an HDB flat that has been announced for SERS.
Flat type2-room or biggerN.A.
Remaining lease of flatMore than 20 years
TimeframeN.A.Application must be submitted within 6 months of your marriage registration or spouse/ child becoming an SC/ SPR
AmountFirst Timer Household:
  • 2-4-room resale flat: S$50,000 (Both SC) / S$40,000 (1SC+1SPR)
  • 5-room or bigger resale flat: S$40,000 (Both SC) / S$30,000 (1SC + 1 SPR)

First-Timer and Second-Timer couples:

  • 2-4-room resale flat: S$25,000 (Both SC) / S$20,000 (1SC+1SPR)
  • 5-room or bigger resale flat: S$20,000 (Both SC) / S$15,000 (1SC + 1 SPR)
The Top-Up Grant amount is the difference between the prevailing Family Grant and the Singles Grant that you have previously received.

Other grants available include the Enhanced Housing Grant and the Proximity Housing Grant.

Couples planning to live with or near their parents and purchasing a resale flat can also utilise the Proximity Housing Grant (PHG) where they can enjoy up to S$30,000 grant if they are planning to live with their parents, or S$20,000 if they are living within 4km of their parents’ home.

First-timer applicants who qualify for the CPF Housing Grants for resale flats can also apply for the Enhanced Housing Grant (EHG). First-timer families can enjoy up to S$80,000 grant while first-timer and second-timer couples can enjoy up to S$40,000 grant.

All in all, first-timer families/couples who purchase a resale flat can enjoy up to S$150,000 in grants.

Get a good home loan

Researching and getting the best home loan have never been as essential as they are now, what with rising mortgage rates.

As interest payments are all increasing, it becomes even more evident and crucial that you pick a suitable home mortgage loan that is suitable for you and your financial needs.

Different housing loans have different requirements and features. For example, fixed interest rate home loans may be fixed for tenures of two years or five years, also known as the lock-in period of the fixed home loan. This could play an important role when you make a decision on which home loan to choose, as housing loans which have fixed interest rates for a longer lock-in period could ensure that you enjoy more stability and certainty. However, a longer lock-in period may also indicate less flexibility for you.

There are also banks that offer preferential home mortgage loan rates for existing customers, as well as housing loans that have certain features and benefits such as attractive introductory or first-year rates.

For individuals who are looking for the best fixed-rate mortgage home loans, here are a few options you can look at.

BankCheck Rates1st Yr InterestMonthly InstalmentLock-In
DBS Fixed
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4.25%S$2,7092 years
DBS Fixed
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4.25%S$2,7093 years
DBS Fixed
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4.25%S$2,7094 years
Assuming a S$500,000 loan with a tenure of 25 years (Sorted by total interest cost)
BankMonthly Instalment1st Yr InterestLock-In Period
DBS FixedS$2,7094.25%2 years
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DBS FixedS$2,7094.25%3 years
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DBS FixedS$2,7094.25%4 years
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DBS FixedS$2,7094.25%5 years
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Assuming a S$500,000 loan with a tenure of 25 years (Sorted by total interest cost)

For individuals who are looking for floating rates, you can check out the following options.

BankCheck Rates1st Yr InterestMonthly InstalmentLock-In
DBS Board
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2.60%S$2,2683 years
SCB 3M SORA
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3.57%S$2,5212 years
OCBC 3M SORA
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3.67%S$2,5482 years
Assuming a S$500,000 loan with a tenure of 25 years (Sorted by total interest cost)
BankMonthly Instalment1st Yr InterestLock-In Period
DBS BoardS$2,2682.60%3 years
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SCB 3M SORAS$2,5213.57%2 years
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OCBC 3M SORAS$2,5483.67%2 years
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SCB 3M SORAS$2,6023.87%2 years
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DBS 3M SORAS$2,6023.87%2 years
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Assuming a S$500,000 loan with a tenure of 25 years (Sorted by total interest cost)

Planning ahead and taking into account refinancing options can be a way to get some great savings in the long run.

Read Also: Banks vs Mortgage Brokers: Which One Should I Use to Refinance My Home Loan in Singapore?

Minimise renovation

Renovation can be a big ticket purchase. If you’re a first-timer couple with tight pockets, looking for a resale flat that doesn’t require much work might be a good idea.

renovation interior design
starryhomestead.com

On average, renovation costs in Singapore range from S$46,000 to S$89,000, depending on the style and how extensive the renovation works are.

By looking for resale units that can be moved into immediately without carrying out extensive renovations, the extra cost of the renovations can be factored into the selling price of the resale flat which can be covered by your home loan.

For individuals who already have a concept in mind and are determined to give your new home a makeover, you can save by choosing the best renovation loan for yourself.

You can check out our specially-curated guides on the various renovation loans in Singapore available for homeowners here.

Compromise on expectations

For many, there are several “must-haves” for a resale flat purchase.

This could include:

  • Location
  • Amenities nearby
  • Schools
  • Distance from parents
  • Distance from the workplace
  • Value Appreciation
  • And more

While it’s logical to have all these, it comes with a cost – a higher price tag. For individuals who might not be able to afford all of the must-haves, you can tick less critical factors off the list to shave down on the price tag.

For example, if you’re someone who wants to live close to the CBD because it’s nearer to the workplace, ask yourself if it’s still important given that you’re no longer required to work in the office that often anymore.

Conclusion

While the prices of resale flats have increased, and first-timer families would need to fork out more if they are looking to purchase an open flat on the market, there are still ways to minimise the costs during the purchase process.

With adequate research, careful selection of home and renovation loans, as well as adjusting your expectations, you can still save during the purchase process.

You can read more about home and loan-related content below.

Tan Boon Hun

Boon Hun spent over five years in the content marketing space as the managing editor of Goody Feed creating interesting and relevant content for the social media generation. In 2022, he moved to the FinTech space while remaining true to his roots, intending to bring financial literacy to more people in Singapore. When not doing his work, he can be found watching people build homes on YouTube.

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