Saving up for a BTO downpayment might seem like a huge task, especially if you’re fresh out of school. Let’s see how Calvin and his girlfriend plan to buy their first home together.
Both of them would like to live in a non-mature estate, where BTO flats can cost around $300,000 and up. Assuming they will be taking a HDB loan, the downpayment they will have to pay is 10% of the purchase price.
Using the average price of $300,000 for a BTO flat in a non-mature estate, the downpayment they will have to pay is $30,000.
Based on their individual pay of $2,100, the amount of CPF contributed into each of their Ordinary Accounts (OA) every month is $483. Based on the current floor interest rate of 2.5% p.a., they will have $23,742.78 in combined OA savings after two years of working, including the interest earned!
If they choose to use all their OA savings to finance their downpayment, they both have to save $260.72 in total each month to make up the difference.
Tip: Since Calvin and his girlfriend are both under 30 years old, they qualify for the Staggered Downpayment Scheme, which allows them to pay 5% during the Signing of Lease Agreement and the last 5% when they collect their keys.
Information accurate as at 11/7/2018