How a lot do you might want to earn to purchase a brand new or resale Government Condominium (EC)?

Considering of upgrading from an HDB flat, however discover that purchasing a rental is simply too costly? Your greatest guess is to get an Government Condominium.

A hybrid of private and non-private housing, Government Condominiums (EC) include rental services, however are cheaper than condos as they’re subsidised. Similar to HDB flats, you’ll be able to take CPF Housing Grants to buy a new EC.

And one of the best half about getting a brand new Government Condominium? You don’t need to pay the Further Purchaser’s Stamp Responsibility (ABSD) upfront whenever you’re upgrading. The caveat is that it’s a must to sell your flat inside six months. After 10 years, the EC turns into totally privatised like condos, permitting you to promote it to foreigners.

Then again, since they’re thought of public housing, new ECs have just a few restrictions just like HDB flats. This contains the five-year Minimal Occupation Interval (MOP), revenue ceiling of S$16,000, and Mortgage Servicing Ratio (MSR).

MSR restricts the month-to-month mortgage quantity you’ll be able to take for an HDB flat or a brand new EC. So you’ll be able to solely use as much as 30% of your month-to-month revenue on your house mortgage.

On the similar time, you’ll be able to solely take up a financial institution mortgage to pay for an EC, that means you’ll be able to solely get 75% financing. So what’s the minimal revenue to afford an EC?

The estimated minimal month-to-month revenue you might want to purchase a brand new Government Condominium

You possibly can calculate this by working backwards. Based mostly on the value of the EC, you’ll find the utmost mortgage quantity you may get. After that, calculate the month-to-month instalments utilizing 99.co’s mortgage calculator to derive the minimal revenue you might want to purchase an EC.

For illustration functions, we’ll use the typical value of a three-bedroom EC unit, derived from three-bedroom unit transactions for brand spanking new launch ECs within the first 5 months (as much as 21 Might) of 2023. These ECs embrace:

Estimates are based mostly on the next assumptions:

• The total 75% financing is taken to maximise the loan-to-value (LTV) ratio
• The mortgage comes with a 30-year tenure
• A medium-term rate of interest of 4%, in mild of the September 2022 cooling measures, is utilized to compute the 30% MSR and minimal gross month-to-month revenue wanted
• There aren’t any different housing loans to be paid
• CPF grants and financial savings usually are not taken into consideration

*based mostly on 99.co’s Researcher. 

Disclaimer: Do be aware that these estimations are based mostly on the typical value, which can be greater or decrease than the precise value of the EC. We suggest that you simply calculate based mostly on the precise value to find out if it’s inside your means. 

Get in contact with 99.co’s mortgage dealer to get one of the best charges! 

(Interested by how a lot you might want to earn to purchase different forms of properties? We’ve crunched the numbers on the estimated month-to-month revenue to afford an HDB resale flat or a rental.)

How about resale ECs? 

We take into account resale Government Condos as people who have handed the five-year MOP and entered the resale market, however they haven’t handed the tenth yr mark but. As talked about earlier, these items can solely be offered to Singaporeans and PRs, like resale HDB flats.

However not like new ECs, resale ECs don’t have as many restrictions, such because the MOP and having to get rid of your current flat. Discover out extra concerning the variations between new and resale ECs right here.

Extra importantly, you’re not subjected to the 30% MSR requirement. As a substitute, you’ll have to fulfill the complete debt servicing ratio (TDSR), which limits the full quantity of loans you’ll be able to service in a month. As of 16 December 2021, the TDSR is capped at 55%. So in comparison with the MSR, it provides you extra affordability to purchase a resale EC.

The estimated minimal month-to-month revenue you might want to purchase a resale Government Condominium 

We calculate it the identical method as the brand new launch EC, however based mostly on the transactions of three-bedroom resale ECs within the first 5 months (as much as 21 Might) of 2023. So this would come with ECs which have TOPed from 2014 to 2018, corresponding to:

Estimates are based mostly on comparable assumptions:

• The total 75% financing is taken to maximise the LTV ratio
• The mortgage comes with a 30-year tenure
• A medium-term rate of interest of 4%, in mild of the September 2022 cooling measures, is utilized to compute the 55% TDSR and minimal gross month-to-month revenue wanted
• For illustration functions, there aren’t any different loans to service, together with property loans, automobile loans, private loans and scholar loans

*based mostly on 99.co’s Researcher. 

Disclaimer: Do be aware that these estimations are based mostly on the typical value, which can be greater or decrease than the precise value of the EC. We suggest that you simply calculate based mostly on the precise value to find out if it’s inside your means. 

Get in contact with 99.co’s mortgage dealer to get one of the best charges! 

Alternatively, you’ll find out extra about how a lot mortgage you may get based mostly in your month-to-month revenue utilizing 99.co’s affordability calculator right here.

Should you discover this text useful, 99.co recommends Almost all ECs resold previously 15 years made a revenue averaging S$300k and Resale ECs hitting MOP in 2023 (and must you promote proper after MOP?).

Steadily requested questions