The planner adopts the following assumptions:
For users who indicated their intention to take up a housing loan for their flat purchase:
1. The purchase budget (rounded up to the nearest dollar) is computed based on the lower of the (a) purchase budget possible with the maximum housing loan and (b) purchase budget possible based on user’s existing capital.
For (a), the planner first computes the estimated maximum loan possible using factors such as mortgage servicing ratio and loan interest rate. The planner then computes the purchase budget using 100/75 of the maximum loan possible, as 75% is the loan-to-value for both HDB loan and bank loan.
For (b), the planner computes the purchase budget based on 4 times the amount of capital that the user and co-owner (if any) have, as the downpayment required for both HDB loan and bank loan is 25%. The amount of existing capital is based on cash savings and existing CPF Ordinary Account balances. If the user indicates the intention to sell his existing flat, any balance sales proceeds and/or any principal CPF amount withdrawn and accrued interest will also be included.
2. The loan repayment period is based on the lower of (i) 25 years or (ii) the remaining number of years until the user turns 65 years old. For (ii), if user inputs a co-owner, the average age is used.
3. The mortgage servicing ratio (or percentage of gross monthly income that can be afforded to be spent on housing) is 25%. For property financed with bank loan, purchase budget and monthly instalment amount are computed based on 4% interest rate. For property financed with HDB loan, purchase budget is based on 3% interest rate and the monthly instalment amount is computed based on the prevailing HDB housing loan concessionary interest rate of 2.6%.
For users who indicated their intention not to take up a housing loan for their next flat purchase:
4. The purchase budget (rounded up to the nearest dollar) is computed based on the user’s and co-owner’s (if any) existing CPF Ordinary Account balances and cash savings. If the user indicates the intention to sell his existing flat, any balance sales proceeds and/or any principal CPF amount withdrawn and accrued interest will also be included.
Balance sales proceeds:
5. For users under the age of 55 who indicate that they intend to sell their existing flat, the balance sales proceeds are computed using the selling price of their home less outstanding housing loan, principal CPF amount withdrawn and accrued interest (including co-owner's, if any), resale levy and other expenses.
6. For users above the age of 55 who indicate that they intend to sell their existing flat, the balance sales proceeds are computed using the selling price of their home less outstanding housing loan, the lower of the user’s (i) principal CPF amount withdrawn and accrued interest or (ii) Retirement Account shortfall to the Full Retirement Sum (if user is logged into CPF) or the user’s principal CPF amount withdrawn and accrued interest (if the user is not logged into CPF), co-owner’s principal CPF amount withdrawn and accrued interest (if any), resale levy and other expenses.
Principal CPF amount withdrawn and accrued interest:
7. For users and co-owners aged under 55, the planner assumes that their principal CPF amount withdrawn and accrued interest are refunded back to their CPF Ordinary Account, which can be used for their flat.
Others:
8. Buyer stamp duty is assessed at 1% of property price for first $180,000; 2% on the next $180,000; 3% on the next $640,000, 4% on the next $500,000, 5% on the next $1,500,000 and 6% thereafter. The planner assumes that CPF will be used to pay the stamp fees wherever possible.
9. Legal fees are assumed to be 1.5% of property price. The planner assumes that CPF will be used to pay the legal fees wherever possible.
10. CPF housing grant, agents commission, and Home Protection Scheme premium are not included in the planner.
11. If user has insufficient CPF Ordinary Account savings, the planner assumes that cash is used to cover the difference.
12. The housing results are based on the combined circumstances of the user and co-owner (if any).
This planner is intended to provide general guidance on housing affordability with results and/or estimates intended for illustrative purposes only. It should not be regarded as advice by CPF Board or used as a substitute for financial advice. Due to the assumptions and computational approach adopted, the results may not necessarily be similar to those provided by HDB/banks. These results and/or estimates are also based on the current assumptions, which are subject to change at any time without notice.