“Can we really afford it?”
That was the first question a young couple asked me after spending almost three hours at a new-launch showflat.
They had found a unit they loved. The bank was prepared to lend them the money, and they had enough savings and CPF for the 25% downpayment. On paper, everything looked comfortable.
Then we added the other costs:
- Buyer’s Stamp Duty
- legal and mortgage fees
- interest payments during construction
- renovation, furniture and appliances
- monthly maintenance and property tax
- emergency savings after the purchase
The room became quiet.
“We thought saving the downpayment was the hard part,” one of them said.
For many buyers, the downpayment is only the first part of the bill.
Singapore’s private housing market remained active in the second quarter of 2026. Developers sold 2,141 new private homes, excluding executive condominiums, while 1,783 units were launched. URA also reminded households to be prudent when buying property and taking on a mortgage. (URA, Q2 2026 private residential statistics)
So before falling in love with a floor plan or showflat, ask a more useful question:
What will this home cost before, during and after I collect the keys?
The S$2 Million Example
Let us use a simple example:
| Item | Amount |
|---|---|
| Property price | S$2,000,000 |
| Bank loan at 75% | S$1,500,000 |
| Downpayment at 25% | S$500,000 |
This assumes the buyers qualify for the maximum 75% loan-to-value limit. For a bank loan at 75% LTV, at least 5% of the purchase price must generally be paid in cash. On a S$2 million property, that is at least S$100,000 in cash; the remaining downpayment may be paid using cash and eligible CPF Ordinary Account savings.
The actual LTV can be lower if, for example, you already have an outstanding housing loan, take a longer loan tenure, or the loan runs beyond the relevant age limit. (MAS loan tenure and LTV rules)
Many buyers stop their calculation at S$500,000.
Unfortunately, the expenses do not stop there.
Cost 1: Buyer’s Stamp Duty — S$69,600
Buyer’s Stamp Duty, or BSD, applies to all property purchases in Singapore. It is calculated on the higher of the purchase price or market value.
For a S$2 million residential property purchased under the current BSD rates:
| Price band | Calculation | BSD |
| First S$180,000 | 1% | S$1,800 |
| Next S$180,000 | 2% | S$3,600 |
| Next S$640,000 | 3% | S$19,200 |
| Next S$500,000 | 4% | S$20,000 |
| Remaining S$500,000 | 5% | S$25,000 |
| Total BSD | S$69,600 |
Stamp duty generally must be paid within 14 days after the contract or agreement is signed in Singapore. If it is signed overseas, the deadline is generally 30 days after the document is received in Singapore. (IRAS stamp duty deadlines)
CPF Ordinary Account savings can be used for eligible stamp duty and legal fees, subject to CPF rules and the proper legal process. However, do not assume the CPF payment will automatically settle everything on time. Ask your lawyer how the payment and CPF withdrawal will be arranged before the deadline. (CPF Board: property-related fees payable with CPF)
Do not forget ABSD
This example assumes the buyers are Singapore Citizens purchasing their first residential property in Singapore, so no Additional Buyer’s Stamp Duty is payable.
ABSD may apply if a buyer is a Permanent Resident or foreigner, already owns a residential property in Singapore, or buys jointly with someone who has a different ownership profile. For joint purchases, the highest applicable buyer profile generally applies to the full property value. (IRAS ABSD rates and rules)
This check should be done before paying the booking fee because ABSD can change the budget by hundreds of thousands of dollars.
Cost 2: Legal Fees and Mortgage Duty
You will need a conveyancing lawyer to handle the purchase, mortgage documents, CPF matters and registration work.
Private-property legal fees are not fixed by regulation. The amount depends on the law firm, the property and the complexity of the transaction. Instead of assuming one standard figure, obtain a written quotation and check whether it includes GST and disbursements.
There is also mortgage duty. IRAS currently charges 0.4% of the loan amount for a mortgage, capped at S$500. For a S$1,500,000 mortgage, the cap of S$500 applies. (IRAS mortgage duty)
For this example, we will set aside S$3,500 for legal fees, disbursements and mortgage duty. This is only a planning figure; use your lawyer’s actual quotation before committing.
Running total: S$500,000 + S$69,600 + S$3,500 = S$573,100
Cost 3: Interest During Construction
A common misunderstanding is:
“It is a new launch, so I do not need to pay anything until TOP.”
That is not correct under a normal progressive payment arrangement.
For a building under construction, the bank usually releases the loan in stages as construction progresses. You pay interest or instalments on the amount that has already been released, not on the full approved loan from day one.
The actual amount paid before TOP depends on:
- how quickly construction progresses
- when each loan disbursement is made
- the mortgage rate at each stage
- how your bank structures the monthly payment
For illustration only, if the average loan amount already disbursed over three years is S$225,000 and the average interest rate is 1.5% a year, the interest would be about:
S$450,000 × 1.5% × 3 years = S$20,250
This is not a quotation or guaranteed forecast. Your bank’s progressive payment schedule may produce a very different figure.
Running total: S$573,100 + S$20,250 = S$593,350
Cost 4: Renovation, Furniture and Appliances
A new condominium is new, but it is not necessarily ready for your lifestyle.
You may still need to pay for items such as:
- carpentry and storage
- lights and electrical work
- curtains or blinds
- furniture and mattresses
- a refrigerator, television and other appliances
- moving costs and small defects not covered by the developer
There is no official “standard renovation cost”. A simple setup and a heavily customised home can have completely different budgets.
For this example, let us assume S$50,000 for renovation, furniture and appliances.
That brings the overall amount to plan for to approximately: S$593,350 + S$50,000 = S$643,350
| Cost | Illustration |
| Downpayment | S$500,000 |
| BSD | S$69,600 |
| Legal fees, disbursements and mortgage duty | S$3,500 |
| Estimated interest during construction | S$20,250 |
| Renovation, furniture and appliances | S$50,000 |
| Total funds to plan for | S$643,350 |
That is about 29% more than the S$500,000 downpayment alone.
However, this is not the same as saying you need S$643,350 in cash. Eligible CPF savings may be used for part of the downpayment, stamp duty, legal fees and housing payments, subject to CPF limits.
Renovation, maintenance charges, property tax and many day-to-day housing expenses generally need to be paid in cash. (CPF Board housing usage guidance)
Cost 5: Your Real Monthly Housing Bill
For a S$1.5 million loan over 30 years:
| Interest rate | Approximate monthly instalment |
| 1.5% | S$5,177 |
| 2.5% | S$5,927 |
| 4.0% | S$7,161 |
| 4.5% | S$7,600 |
At 2.5%, the instalment is about S$750 more each month than at 1.5% (roughly S$9,000 more a year).
The mortgage is only part of the monthly bill. Here is a transparent example:
| Monthly housing expense | Illustration |
| Mortgage at 1.5% | S$5,177 |
| Condominium maintenance | S$450 |
| Property tax provision | S$200 |
| Home insurance | S$30 |
| Utilities | S$250 |
| Repairs and replacement reserve | S$300 |
| Estimated monthly housing cost | S$6,407 |
These non-mortgage amounts are examples, not official averages. Maintenance depends on the project and unit share value. Property tax depends on the property’s Annual Value and whether it qualifies for owner-occupier tax rates. (IRAS property tax rates)
The important lesson is not that every S$2 million home costs exactly S$6,407 a month. It is that you should build your own full monthly budget instead of looking only at the mortgage instalment.
Bank Approval Is Not the Same as Personal Comfort
Under MAS rules, a borrower’s Total Debt Servicing Ratio generally must not exceed 55% of gross monthly income. This includes the new mortgage and other monthly debt obligations. For residential property loans, banks generally assess the mortgage using the higher of a 4% interest-rate floor or the applicable thereafter rate. (MAS TDSR calculation)
These rules help to limit over-borrowing, but passing TDSR does not mean the property will feel comfortable for your family.
The bank uses gross income for TDSR. Your household budget should use the money that actually reaches your bank account after CPF contributions, taxes and other deductions.
Assume a couple earns S$18,000 in combined gross monthly income, but has S$15,000 available as take-home cash for planning purposes. Using the S$6,407 housing-cost example, they would have:
S$15,000 − S$6,407 = S$8,593
That S$8,593 still needs to cover food, transport, childcare, parents, insurance, holidays, savings and everything else.
Now ask:
- What if one income disappears for several months?
- What if the mortgage rate rises after the fixed or promotional period?
- What if you have a child or need to support ageing parents?
- What if there is a medical emergency or career change?
The better question is not only, “Will the bank approve my loan?”
It is, “After paying for this home, can we still live the life we want?”
CPF Helps, but It Is Still Your Money
Using CPF can reduce the cash you need upfront and every month. But it does not make the home cheaper.
CPF savings used for a property would otherwise remain in your CPF account for retirement. When the property is sold, the CPF principal used and accrued interest generally have to be refunded to your CPF account from the sale proceeds, after the outstanding housing loan is paid. (CPF Board: what happens to sale proceeds)
This refund is still your money; it goes back into your CPF account, not to the Government but it can reduce the cash sale proceeds available for your next property.
That is why buyers should plan both their cash usage and CPF usage, rather than automatically using the maximum CPF amount available.
The Opportunity Cost Most Buyers Do Not See
Every dollar committed to the property is a dollar that cannot be used elsewhere for investments, your children’s education, a business opportunity, or simply a larger emergency fund.
For example, S$200,000 growing at a hypothetical 6% a year would become approximately:
- S$358,000 after 10 years
- S$641,000 after 20 years
This is a mathematical illustration, not a guaranteed investment return. Investments can rise or fall, and property values can also rise or fall.
The point is not that investing is always better than buying a home. The point is that every major financial decision has a trade-off.
One More Cost If Your Plan Changes: Seller’s Stamp Duty
Your circumstances may change before you expect them to.
For residential properties purchased on or after 4 July 2025, Seller’s Stamp Duty may apply if the property is sold within four years of purchase:
| When the property is sold | SSD rate |
| Within 1 year | 16% |
| More than 1 year and up to 2 years | 12% |
| More than 2 years and up to 3 years | 8% |
| More than 3 years and up to 4 years | 4% |
| After 4 years | No SSD |
SSD is calculated on the higher of the selling price or market value, subject to the applicable rules and exemptions. (IRAS Seller’s Stamp Duty)
You may never need to pay SSD if you hold the property beyond the required period. But it matters if your job, relationship, family needs or finances change and you need to sell early.
A Simple 3-3-6 Check Before You Buy
This is not a government rule. It is a personal planning guide I use to help buyers think beyond loan approval.
Before committing, ask yourself:
- 3 percentage-point rate increase: Can we still manage the mortgage if the rate rises from 1.5% to 4.5%? In this example, the instalment would rise from about S$2,588 to S$3,800 a month.
- 3 months of income disruption: Could we continue paying the mortgage and essential bills if one income stops for at least three months?
- 6 months of emergency savings: After paying the downpayment, stamp duty, legal fees and renovation, will we still keep at least six months of essential household expenses?
If the answer to any of these is no, it does not automatically mean you cannot buy the property. It may mean you should consider a lower budget, a larger cash buffer, a different loan amount or more time to prepare.
Final Thoughts
The happiest homeowners are not always the ones with the biggest homes.
Often, they are the ones who still have enough breathing room to enjoy family dinners, take a holiday, handle an emergency and sleep peacefully when interest rates change.
Before you commit to your next home, ask:
“What will this home cost us each month, and what will we have to give up to own it?”
The downpayment gets you through the purchase. Your cash flow determines whether you enjoy the next 30 years.
Your dream home should bring your family security and happiness, not become your greatest source of financial stress.
IQrate’s Take
Buying a property is not only about qualifying for the biggest possible loan or securing the lowest advertised rate.
It is about choosing a mortgage and a property budget that still leave room for your family, future plans and unexpected changes.
At IQrate, we help homeowners compare mortgage loan options and understand the longer-term cost, not just the headline interest rate. Whether you are buying your first home, upgrading, or refinancing, our goal is to help you make a decision that you will be comfortable with after the excitement of collecting your keys has passed.
A good mortgage should not only save interest. It should also give you peace of mind.