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Executive Condominiums (ECs) is a unique hybrid of public and private housing in Singapore, designed to cater to the middle-income group who desire the amenities and lifestyle of a private condominium but at a more affordable price point.
This comprehensive guide will walk you through the process of buying an EC in Singapore, from determining your eligibility to the various payment schemes available.
Upcoming EC Available:
North Gaia EC (616 units)
EC in the pipeline:
If you are interested, be sure to click here to find out more.
Determine Your Eligibility for EC
Hold it!
Before you start considering purchasing an EC, it is essential to check if you meet the eligibility criteria. To qualify for an EC, you must:
Apply under one of the following HDB eligibility schemes: Public Scheme, Fiance/Fiancee Scheme, Orphans Scheme, or Joint Singles Scheme.
Have the main applicant be a Singapore Citizen aged 21 and above, while the co-applicant can be either a Singapore Citizen or Singapore Permanent Resident.
Have a combined gross monthly household income not exceeding $16,000.
Not currently own any residential properties (locally or overseas) or have disposed of them within the past 30 months.
Have only purchased up to one HDB, DBSS, or EC in the past.
If you don't qualify for an EC, you may still consider HDB resale flats, regular private condominiums, or landed private properties.
Work Out Your Finances
While an EC may cost lesser than private property, it is still a more premium property to own compared to HDB.
Before you start shopping for an EC, you need to determine your maximum affordability. Here are some factors you may need to consider:
Downpayment
After exercising the S&P(sales and purchase) agreement, there are two options for you:
Progressive Payment Scheme (PPS)
PPS requires that you only make payments when specific construction milestones are reached rather than having to pay for the entire property up front as you would have to with finished units.
You can think of PPS as paying for every tiny bit of service that has been done. It's in some ways this is fairer because you don't begin to pay the full costs until you can occupy and use the property.
By opting for this mode of payment, the buyer will:
Pay the 5% OTP fee in cash
Within two to three weeks, exercise the OTP, and sign the Sale & Purchase Agreement (15%, or S$225,000).
Settle any stamp duties (Also possibly with CPF funds)
Here are the payments that you need to consider:
Completion of Stage | Repayments (a percentage of purchase price) |
Foundation Work | 10% |
Reinforced concrete framework | 10% |
Partitions and walls | 5% |
Ceilings | 5% |
Internal Plumbing and plastering | 5% |
Car parks, roads, and drains serving the housing project | 5% |
Receipt of TOP (move in condition) | 25% |
Completion | 15% |
Total | 80% |
Deferred Payment Scheme (DPS)
The DPS (Deferred Payment Scheme) is the most popular scheme when it comes to home buyers that need more time for their payment.
Only a 20% down payment is required (5% option fee plus 15% sale and purchase agreement). Upon receiving the project's TOP, the remaining 80% can be paid. This however, comes with the cost that the EC costs more.
Home Loan
***Take Note***
You will not be eligible for an HDB loan to buy your EC, so you will need to approach a bank for a loan. The maximum loan-to-value (LTV) limit for a bank loan is capped at 75% of the property price.
| New EC | HDB Flats | Private Properties |
Borrower's monthly income ceiling | $16,000 | $14,000 for couples or $21,000 for multi-gen families | No limit |
Borrower's loan servicing ratio limit | MSR - 30% | MSR -30% | TDSR - 55% |
Loan to value | 75% | 80% | 75% |
Minimum cash repayment | 5% | 5% Cash or CPF OA Savings | 5% |
Monetary Authority of Singapore (MAS) Limits
MAS has implemented the Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR) limits to prevent homeowners from being over-leveraged and unable to service their home loans.
The MSR states that your monthly mortgage repayment cannot exceed 30% of your combined monthly income, while the TDSR states that your combined monthly loan repayments (including personal loans, car loans, and education) cannot exceed 60% of your combined monthly income.
Additional Costs
Beyond the purchase price, you need to budget for legal fees (about 200), and Buyer's Stamp Duty (3% of the purchase price or 4% if the purchase price is above $1 million).
To find out more if you are eligible to purchase an EC, be sure to check in on Money Smart EC Eligibility Calculator to determine how much you actually need.
Shortlist Upcoming EC Sales Launches
With your eligibility and affordability determined, it's time to keep an eye on new EC projects and resale ECs to shortlist. You can visit HDB's website for current and upcoming EC launches. If the upcoming launches do not meet your desired location, consider resale ECs and private condominiums.
Some new EC projects may require you to make an appointment online before visiting the show flat. You may also want to consult us if you would like our opinion before checking out other EC projects.
Given how competitive it is to get an EC, here’s what you need to do to increase your odds of getting an EC.
Secure Your Option-to-Purchase and Make the Downpayment
Once you've found an EC unit that you'd like to purchase, you'll need to secure an Option-to-Purchase (OTP) – a legal document that states the developer cannot sell your chosen unit to anyone else for a stipulated period. For the OTP, you'll be required to pay 5% of the purchase price in cash or cheque.
After your application to purchase the EC has been approved by HDB (usually within a month), you'll receive a Sales and Purchase (S&P) Agreement from the developer. You'll have about 21 days to exercise your right to purchase the unit by signing and returning the S&P Agreement.
Next, you'll need to pay the remaining downpayment of 20% and the Buyer's Stamp Duty, using HDB Housing Grants, CPF monies, or cash.
Post-Purchase Requirements
The remaining 75% of your EC's cost can be paid using HDB Housing Grants, CPF monies, bank loans, or cash. Unlike a BTO, where you only need to take a loan to cover the balance when you collect the keys, there are two schemes you can choose for paying up the rest of your EC:
Normal Payment Scheme: Your home loan will be disbursed to the developer according to the payment schedule set by the developer as construction reaches certain milestones. This means that your home loan repayments will commence much earlier.
Deferred Payment Scheme: Under this scheme, your home loan will be disbursed only when the EC receives its Temporary Occupation Permit (TOP) and you collect your keys.
Once you collect your keys, you can commence renovations and move into your new home.
TAKE NOTE: EC Buyers are Not Eligible for HDB Loans
As mentioned earlier, even though ECs are considered HDB properties in the first decade, you can only finance them through a bank loan.
This means that the Loan-to-Value (LTV) limit, or the maximum amount you can borrow, is capped at 75% of the property price. The remaining 25% must be paid as a downpayment (5% in cash and 20% in cash and/or CPF OA savings).
Debt Servicing Ratios: Both TDSR and MSR Apply for EC
Unlike private condos, where you only have to think about your Total Debt Servicing Ratio (TDSR), there is an additional restriction for ECs – the Mortgage Servicing Ratio (MSR), which caps the proportion of your monthly income used for mortgage repayments to just 30%.
CPF Housing Grants for EC in Singapore
Another distinguishing feature of an EC compared to a private condo is that homebuyers of a new EC may be eligible for CPF housing grants such as the Family Grant and the Half-Housing Grant. However, your monthly gross income shouldn't exceed $12,000 to apply. Your citizenship and income range will also affect the amount you can receive.
Importance of the HDB Resale Levy for Second-Timers
If you're a second-timer who has bought an HDB flat once before and is now upgrading to an EC, there is one more cost to consider when calculating your affordability – the HDB resale levy. The resale levy is payable when you buy a subsidized home, then sell it and buy another subsidized flat or EC. The amount you need to pay depends on your previous housing type.
Get on Potential Capital Appreciation and Privatization
Owning a property in Singapore is still one of the best financial decision. And the main attraction of buying an EC is the potential capital appreciation after the 10-year privatization period.
After 10 years, ECs become fully private properties and can be sold to anyone, including foreigners. This increased pool of potential buyers may result in higher resale prices, making ECs an attractive investment option.
Have we Solved your How to Buy an EC Question?
By understanding the process, eligibility criteria, and financial requirements, you can make an informed decision and find the perfect EC for your needs.
If you do still have questions that you would like us to answer, feel free to comment down below or contact us here.
Upcoming EC Available
North Gaia EC (616 units)
EC in the pipeline
If you are interested, be sure to click here to find out more.
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