Initial downpayment to be slashed to 2.5% of BTO flat price for eligible young couples
- National Development Minister Desmond Lee unveiled measures to make it easier for some young couples to make a downpayment on a BTO flat
- He told Parliament that young couples eligible for the deferred income assessment under HDB will now need to pay a downpayment of only 2.5 per cent of their flat price
- This will apply whether they opt for an HDB loan or a loan from a financial institution
- The 2.5 per cent downpayment is a reduction from 5 per cent for HDB loans and from 10 per cent for bank loans
- It will be implemented at the next sales launch in June
BY
AMANDA YEAP
Published March 5, 2024Updated March 5, 2024
WhatsAppTelegramFacebookTwitterEmailLinkedIn
SINGAPORE — From June, young couples eligible for the deferred income assessment under the Housing and Development Board (HDB) will need to fork out an initial downpayment of only 2.5 per cent of the flat's purchase price, said National Development Minister Desmond Lee.
The change, aimed to alleviate the financial burden for young couples, is an enhancement to the staggered downpayment scheme, and will take effect from the next Build-to-Order (BTO) sales launch in June, Mr Lee said in Parliament on Tuesday (March 5).
It will apply to both an HDB housing loan or a loan from a financial institution.
"So for those taking HDB loans, (this is down) from 5 per cent to 2.5 per cent. For those taking loans from banks, from 10 per cent to 2.5 per cent.
"These couples will pay the balance downpayment at key collection when they are in a better position to do so," Mr Lee said during a debate on the ministry's plans for housing on Tuesday (March 5).
Under the deferred income assessment, eligible couples — full-time students or National Servicemen (NSFs), and those who have completed full-time studies or National Service within the last 12 months before applying for HDB flat eligibility (HFE) — may have their income assessed at a later date before flat completion.
Other eligibility criteria include the couple being married or applying for a flat under the Fiancé/Fiancée scheme, and at least one party must be a first-timer and aged 30 or below at the point of the HFE letter application.
Buyers can make the downpayment in two instalments under the staggered downpayment scheme, firstly, at the signing of the agreement for the lease and secondly, at key collection.
Mr Lee said the ministry wants to do more to lighten the financial burden for such young couples, who may find that HDB's current 5 per cent initial downpayment under the scheme a significant financial barrier.
To illustrate his point on the enhanced scheme, Mr Lee gave an example of a young couple taking an HDB loan to buy a 4-room BTO flat in Bedok, priced at S$480,000 before grants.
As one of them is a full-time student and the other an NSF, they are eligible to tap on the deferred income assessment.
"Today, should they tap on the (scheme), the 5 per cent initial downpayment is S$24,000. With our enhancement... this will be further reduced to S$12,000, which is much more affordable.
"For couples who are ready to purchase a flat and have been saving up to afford the downpayment, I hope this enhancement will help you to settle down and start your families earlier," he said.
