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Buying a BTO HDB Flat? 7 Tips To Take Note

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Applying for a HDB BTO flat even before marriage may seem unromantic, but some couples point out that it is still the best way to get prime locations at attractive prices, especially if they intend to get hitched by a particular age. The demand for BTOs is due to a higher number of marriages over the years and a growing trend of people choosing to have their own flats.

And why not? BTO flats are often the most affordable first homes for young couples, especially with the increasing HDB resale prices since the last year or so. It is not just the subsidised flat prices; the long waiting period for BTO flats offers young couples more time to save up for financing their flat purchase.

It is important to remember that purchasing a BTO flat is similar to making a future decision, as the flat would only be ready after 3 to 5 years. This article will discuss what it means to own a BTO flat as a young couple and the things they should know about buying a BTO flat.

Are you eligible for an HDB BTO flat?

You want to buy a BTO, but are you even eligible?

Remember that the HDB flats are subsidised public housing for Singaporean citizens, so not everyone living in Singapore is eligible. The below table shows the eligibility criteria for HDB BTO flats.

HDB BTO Eligibility Requirements for Couples

Flat typeUp to a 5-room flat
CitizenshipYou must: Be a Singapore Citizen (SC)Include at least one other SC or Singapore Permanent Resident (SPR)
AgeAt least 21 years
Monthly household income ceiling2-room Flexi flat: $7,000 (99-year leases) and $14,000 for short leases (15 to 45 years);3-room flat: $7,000 or $14,000, depending on project;4- and 5-room flat: $14,000 and $21,000 if purchasing with extended or multi-generation family
Property ownershipFor interest in property in Singapore or overseas other than HDB flat: The buyers must not own any private properties, locally or overseas, or dispose of any such properties within the last 30 months before the BTO flat application. For interest in HDB flat: If the buyers own or have an interest in any HDB flat, they must dispose of the flat within 6 months of the completion of the flat purchase.
CPF housing grantsEnhanced CPF Housing Grant Step-Up Housing Grant

If you meet the BTO eligibility requirements, you may apply for a BTO during a sales exercise. The successful applicants will be invited to book a flat. Note that the buyers will have to wait about 3 to 5 years before moving in.

Broadly categorised by the type of family nucleus, there are two eligibility schemes for couples:

Public Scheme. To qualify under the Public Scheme, you need to form a family nucleus with your spouse and children (if any).

Fiancé/Fiancée Scheme. Young couples who are not married yet and are above 21 years can apply under the Fiancé/Fiancée scheme. To qualify for this scheme, you will need to form a family nucleus with your spouse-to-be, and if you haven’t already done so, you will need to solemnise your marriage within three months of collecting the keys to your BTO flat.

HDB will ask you to submit a photocopy of your marriage certificate as proof of marriage.

Young couple looking to buy an HDB BTO flat

James and Genelia, both aged 23 and students, are planning to apply for a BTO flat. With the support and encouragement of their parents, this young couple started their research, which included articles and videos about how to apply for a BTO and what housing grants they could receive.

James and Genelia even made an Excel sheet to track their monthly finances, estimated income, and their individual contributions towards targeted savings for their future BTO.

Let’s take the example of James and Genelia look to better understand what it means to buy a BTO as a couple.

 JamesGenelia
Current age23 years23 years
Current cash savings$30,000$30,000
OccupationStudent (graduating in 2024)Student (graduating in 2025)
Expected age when moving in28 years28 years
Expected monthly income*$4,500$4,500
Expected cash savings at 28$50,000$50,000
Expected CPF OA balance at 28$60,000$50,000
Other expenses in the next 1-2 yearsOverseas exchange program & weddingParents’ allowance, graduation trip & wedding

Financial prudence

At the time of signing the Agreement for Lease, James and Genelia will have to pay around $45,000 for choosing a 4-room BTO flat priced at $600,000 in a mature estate. This turns out to be $22,500 each. Considering their current savings of $30,000 each, they will be left with less than $10,000 per person for their short-term expenses.

However, if James and Genelia choose a 4-room BTO in a non-mature estate, it would cost them around $400,000. In that case, the couple will have to pay around $29,000 when signing the Agreement of Lease, meaning $14,500 per person. This leaves both James and Genelia with $15,000 each after paying for the 5% downpayment, stamp duty, application fee and legal fees.

No doubt, choosing a flat in a non-mature estate would mean forgoing some amenities and conveniences like nearby MRT station, school, a higher floor flat, etc., which may come by default with a BTO in a mature estate, but ultimately, the couple should make a decision taking into account their financial goals and commitments.

Waiting time

It is another crucial aspect for young couples. Add in at least six months for collection of keys and renovation from the date of completion to when you can actually move in.

BTO projects launched in the same quarter may have different dates of completion, which in turn can affect your total income. For example, in the August 2022 launch, Keat Hong Grange is projected to complete by the fourth quarter of 2026 while the Havelock Hillside project is estimated to get completed almost two years later – in the fourth quarter of 2028.

If a couple is applying for a BTO flat for the very first time, they are considered first-time applicants and get extra privileges. This includes two ballot chances to strike in the draw for queue number. And if you don’t get to select a flat this time around, you will have three ballot chances the next time you apply!

7 Tips for first-timer BTO couples

BTO is a big commitment for any couple. Here’s is a list of things all young couples who are soon-to-be first-time homeowners must understand before applying for a new BTO flat:

Tip 1. Know your priorities when buying a home

Planning makes everything easy, but it is still important for couples to have their priorities in order. You should discuss and decide what kind of housing you are looking for, including the size of the flat and the locality you want to live in.

It is important to know what is more important for your family and then make a choice based on that. Taking decisions after weighing in all the pros and cons against their key priorities should help you make the right start towards your home-buying journey.

Tip 2. Choose a flat that meets your budget and timeline

It is important to be realistic about what you can afford, especially if you are planning to have a baby. In every BTO project launch, you will find high-demand locations offering 4-room and 5-room flats. However, they could be not only more expensive but also smaller than 4-room and 5-room units offered in non-mature estates.

You might also have to wait longer for projects in mature estates. However, this may also mean missing out on some location-based benefits. In the end, you don’t want to be caught in a situation where you regret your BTO application after getting a good queue number.

Tip 3. Find a balance between comfort and value

Couples should concentrate more on quality of life and buy their first house to live comfortably rather than being concerned about the profit margins. The investment part should come later on. Buying a resale flat may come with renovation costs, and if you prefer open layouts and spaces, it might be hard to get one without blowing away your budget.

A comfortable BTO flat with sufficient space always means more value to your family than making a profitable investment out of it.

Tip 4. Pick a flat location that matches your lifestyle

Choose a BTO flat that is suitably convenient for your lifestyle without costing you a hefty price. For example, if you prefer to cook and eat at home, you won’t mind having enough eateries around. But you would still like to have a couple of supermarkets or wet markets close to your locality. Also, if you rely on the MRT, it is preferred to have the MRT station or at least good connectivity of different bus services.

Please note that even those 4-room or 5-room flats not in the vicinity of MRT stations have shown a healthy profit margin in the last 12 months.

Tip 5. Check out the different schemes and grants available

When purchasing an HDB BTO flat, knowing which schemes and HDB grants you are eligible for can make a difference. One such scheme is the Married Child Priority Scheme (MCPS), which allows couples to have more ballots (higher chance) if the location of the couple’s BTO is within 4km of their parent’s home. Fiancé/Fiancée applicants (or engaged couples) may also apply for the MCPS.

Another such scheme is the Additional Housing Grant (AHG), wherein couples with a combined monthly income of less than $5,000 can receive an additional grant. This grant will help reduce the BTO flat price. To qualify for this grant, one of the applicants should be working for at least one year.

Tip 6. Ensure a steady cash flow

Since young couples (undergraduates or fresh out of university) buying a BTO do not qualify for any CPF housing grants, it is good to apply for a HDB loan with a staggered downpayment scheme.

Such couples can pay for the first phase of the downpayment after signing of Agreement of Lease using their savings (plus some help from parents) and by the time they collect their keys, they will be able to gather enough funds in their CPF to make their downpayment and an additional partial capital repayment.

They can consider opting for a longer home loan tenure of 30 years if they want to use CPF for monthly instalments and not to pay in cash. It would also help young couples ensure a steady cash flow and later refinance their home loan for a lower interest rate.

Tip 7. Always plan for the foreseeable future

A couple should plan for the future and think beyond their immediate needs. Choose what’s more important – having amenities or space, especially with children in the picture.

Can I apply for BTO with my girlfriend?

One of the most commonly asked questions by young Singaporean couples when discussing housing and homeownership is: “Can unmarried couples apply for BTO?”. While a lot of young couples already know the answer and have started saving money and applying for BTO flats, here, we will assist the uninitiated with the details.

Yes, you can apply for the BTO flat with your girlfriend/boyfriend if you both meet other BTO eligibility requirements. Many undergraduates or fresh grads who have not built up their finances yet but are committed to each other can apply for a BTO flat together.

However, if you and your partner are not married at the time of the BTO application, you must get married by the time the flat is ready or at least within 6 months of the key collection date.

What happens if you break up before BTO?

In the urgency of wanting a place to call their own, some couples jump the gun and apply for a BTO even before they are too sure about their relationship’s future.

A Reddit thread on BTO and break-ups suggests that only around 50% of couples who BTO before marriage have a successful relationship, meaning almost half the couples fail to weather the waiting time (usually 3 to 5 years) for completion of their BTO flat.

If you and your co-applicant (your future spouse) choose to split up and not get married after getting a BTO, there are consequences. When a couple decides to separate ways after the first flushes of romance fade, even though with mutual consent, they will not be able to take possession of the flat and hence forfeit the 5% downpayment they have already made.

For example, for a 4-room BTO flat priced at $500,000 in a mature estate like Toa Payoh, they will have to forfeit $25,000. On top of that, they have to forgo the stamp duty paid and other legal or conveyancing fees.

Both individuals will be barred from applying or being included as essential occupiers for a new HDB flat (or DBSS flat or Executive Condominium) or a resale flat with housing grants for one year starting from the date of cancellation. It was an attempt by HDB Singapore to prevent frivolous buyers from monopolising spots in the queue.

Also, if the couple is a first-timer and has taken housing grants like AHG (Additional Housing Grant) and/or SHG (Special Housing Grant) to offset the cost of their flat, they will have to cough back the full grant amount plus interest.

Only after you have paid the full amount, you can apply or be included as an essential occupier for a new HDB flat (or DBSS flat or Executive Condominium) or a resale flat with housing grants.

What happens to my BTO if I divorce?

Life can take unexpected turns, and plans don’t work the way we want them to, which sometimes leads to couples deciding to end their marriage with a divorce.

While dealing with the after-effects of a failed marriage can be tough, what is worse is knowing you may lose your flat!

Assuming the BTO flat is a matrimonial asset, if the couple has not fulfilled the MOP (Minimum Occupation Period) of 5 years, then neither you nor your ex-spouse will be allowed to sell or retain the flat.

In such a case, HDB takes over and reclaims the flat at the prevailing price. Similarly, if the couple’s marriage is annulled or consummated, neither party is allowed to retain the flat. It will then be reclaimed by the HDB at the prevailing price.

If a couple cannot agree on the division of their assets amicably, the judges have free reign to do so. In such a scenario, several things related to maintaining and taking care of the household, would be taken into account to ensure fairness of the split even if one of the parties had made full payment for the BTO.

To retain your HDB BTO flat, you must fulfil the following criteria in case of a divorce or separation:

  • Your parents’ names should be originally listed in the BTO application;
  • You have the child’s custody after the divorce;
  • Each party’s financial ability to take care of the child’s needs

Can I BTO again after the divorce?

You may qualify for ASSIST (Assistance Scheme for Second-Timers) – a priority scheme for divorcees by HDB. This allows you, as a divorcee, to apply and ballot for a BTO immediately after your divorce, following the same standard procedure as couples and singles over 35. To qualify for ASSIST, you must have at least one child below 18.

How can I increase my ballot chances of BTO?

It is not completely wrong to say that applying for a BTO flat is akin to having a go at the lottery. Unless your marriage is legally registered and the couple has their own kid, your odds of landing a unit in your choice of locality are somewhat remote.

Here’s what you can do to improve your HDB BTO application chances:

Apply for BTO flats in non-mature estates. It is believed that all first-timer families who applied for BTO flats in non-mature estates have been successful within their first three tries.

Stay near or with your parents. Apply under the Married Child Priority Scheme (MCPS) if you want to stay in the same hood as your parents. As a couple, you would be eligible for additional grants on the unit plus two extra ballot chances for applying for a flat within a 4km radius of your parents. HDB reserves up to 30% of BTO units under this scheme.

Be neighbours with your parents. Under the Multi-Generation Priority Scheme (MGPS), couples can make a joint application for the same BTO project as their parents to improve their ballot chances. Ensure the BTO project you apply to has 2-room Flexi and 3-room flats because your parents can only apply for them under this priority scheme.

Expecting a baby. Under the Parenthood Priority Scheme (PPS), up to 30% of the BTO units are allocated to first-timer married couples expecting a child.

Consider having more children. Under the Third Child Priority Scheme (TCPS), up to 5% of the BTO units are allocated to couples or families with more than two children.

Apply even after a failed (or unfortunate) marriage. Divorced or widowed people with children can apply for a BTO under the ASSIST. Up to 5% of 2-room Flexi and 3-room flats in non-mature estates are allocated to applicants in this category. This quota is shared with the 30% quota for second-timer applicants.

Own your own HDB rental flat. Couples previously renting an HDB rental flat can increase their ballot chances by applying under the Tenants’ Priority Scheme (TPS). You will be glad to know that HDB reserves up to 10% of 2-room Flexi and 3-room BTO units for those who apply under TPS.

Final Thoughts

At the end of the day, every young couple’s journey to buying their first BTO flat will be different, but an acute awareness of what you want and a plan for the future can go a long way.

Take time to decide on a BTO flat type that will be most suitable for you, and also discuss how you want to finance it. Be realistic about your finances and keep track of your spending. This way, you won’t get trapped in the mad scramble with a large home loan that drains your hard-earned savings.

If you have the foresight to plan a few steps ahead and both individuals are ready to make all the required efforts for their first home, you can apply for BTO even before getting married.

If you have any doubts about making your first BTO ballot or need help with your HDB BTO loan, we can help. Don’t hesitate to reach out to one of our mortgage experts at Dollarback Mortgage for free, unbiased and transparent advice.

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