A Complete Guide to Financing Your Landed Property Purchase in Singapore
Financing a landed property purchase is often more complex than buying a condominium or HDB flat. Here’s a comprehensive guide on how to finance your landed property purchase in Singapore.
1. Loan Eligibility and Types
To purchase a landed property, you will need to secure a bank loan or home loan. Banks in Singapore typically offer up to 75% financing for properties under S$1 million and up to 60% for properties above this amount. The loan tenure is usually up to 30 years, and the interest rates are generally competitive, though subject to fluctuations.
2. Down Payment
You will need to pay a down payment, which typically ranges from 20% to 25% of the property’s value. This can be funded using your own savings or through CPF (Central Provident Fund), although the CPF cannot be used for the full down payment if it exceeds the withdrawal limits for properties.
3. Stamp Duty
Stamp duty is payable on the purchase of landed property and is calculated as:
- 1% on the first S$180,000 of the property price.
- 2% on the next S$180,000.
- 3% on the remainder.
For example, if you buy a landed property for S$2 million, you would pay S$54,600 in stamp duty.
4. Government Schemes
While there are no specific government schemes for landed properties (unlike HDB flats), certain buyers, such as first-time homebuyers, may be eligible for stamp duty relief or grants for eligible property purchases. Consult a property agent or financial advisor to understand how these schemes might benefit you.
5. Choosing the Right Mortgage Plan
When applying for a loan, you can choose between fixed-rate loans, floating-rate loans, or hybrid loans. Fixed-rate loans offer predictability, while floating-rate loans may provide flexibility if interest rates decrease. Evaluate your financial situation and select the mortgage plan that best suits your long-term goals.