Our First Home Calculator - Assumptions

The program adopts the following assumptions. Those marked with an asterisk * can be changed after the initial results are computed.
   
1. If there are two users, the average age is adopted for the loan period computation.
2. The debt servicing ratio (or percentage of gross monthly income that can be afforded to be spent on housing) is 25%. This is based on the average DSR for new flats in non-mature estates *.
3. The loan interest rate is 2.60% per annum. This is the current HDB housing loan concessionary interest rate *.
4. The maximum loan repayment period is 30 years *. The maximum loan repayment period for HDB loans is 65 years minus buyer’s age or 30 years, whichever is shorter. The maximum loan repayment period for loans taken through financial institutions is 35 years.
5. The maximum age at which the loan must be repaid is 65 years old *.
6. For users aged 21-54, the program assumes the loan is repaid by 55. For users aged 55-64, the loan is assumed to be repaid by 65 *.
7. Program assumes that the property price is equal to 100/80 or 100/90 of the computed maximum housing loan, for 80% and 90% housing loan respectively; and that there is no cash over valuation.
8. For HDB flat financed with HDB loan, the downpayment is 10% and maximum loan is 90%. For any property financed with bank loan, the downpayment is 20% (the first 5% must be cash) and maximum loan is 80%. Where a loan tenure exceeds 30 years or loan repayment period crosses 65 years of age, the downpayment is 40% and the maximum loan is 60%.
9. For HDB concessionary loan, the entire CPF Ordinary Account savings balance will be used to reduce the loan required. For bank loan, the program attempts to reserve CPF savings equivalent to about 6 months of monthly instalments as contingency funds, and use the rest to reduce the loan required.
10. The Valuation Limit is the lower of the purchase price or the value of the property at the time of purchase. This program assumes that the Valuation Limit is equal to the purchase price and market valuation, and there is no cash over valuation. The CPF Withdrawal Limit is 120% of the purchase price.
11. Stamp duty is assessed at 1% of property price for first $180,000; 2% on the next $180,000; and 3% therafter. Program assumes that CPF will be used to pay the stamp fees wherever possible.
12. Legal fees is assumed to be 1.5% of property price. Program assumes that CPF will be used to pay the legal fees wherever possible.
13. CPF housing grant, agents commission and Home Protection Scheme premium are not included in the program.
14. If user has insufficient CPF Ordinary Account savings, the program assumes that cash is used to cover the difference.
15. User’s current cash balances are not factored into the calculation. If user has excess cash balances, it can be used to increase the possible purchase price.
   
  This calculator is intended to provide general guidance on housing affordability. Due to the assumptions and computational approach adopted, the results may not necessarily be similar to those provided by HDB/banks.