Simulated case study: a hypothetical scenario to illustrate the rules. Not a real client or transaction. Figures as at 10 October 2026.
Under the assumptions below, a second-timer couple buying a S$1,420,000 new EC must budget a S$40,000 resale levy in cash (or from their existing flat's sale proceeds), and the 30% Mortgage Servicing Ratio limits their bank loan to about S$800,000, not the 75% (S$1,065,000) they expected. That raises the downpayment to about S$619,600, before S$41,400 of Buyer's Stamp Duty.
The situation
Hui Min (41) and Ravi (43) earn S$14,800 a month in gross household income. In 2010 they bought a 4-room BTO flat, which they sold in 2016. They now live in a 5-room resale flat bought without a CPF housing grant. They are looking at a new EC unit at an assumed price of S$1,420,000.
Because they bought a subsidised BTO flat before, they are second-timers. Their plan assumed a 75% bank loan and a 25% downpayment from CPF and savings, with no resale levy.
The rules that apply
| Rule | What it says | Source | Effective / as at |
|---|---|---|---|
| Resale levy (second-timers) | Payable when a second-timer buys another subsidised home, including a new EC from a developer. For a first flat sold on or after 3 Mar 2006 it is a fixed amount: 4-room S$40,000 (households). Fixed at the time of booking. | HDB: EC eligibility and resale levy | First flats sold from 3 Mar 2006 |
| Paying the levy | Cash, or deducted from the sale proceeds of the existing flat if it is sold after key collection of the new home (shortfall in cash). Not payable by CPF or loan. | Same HDB page | Current |
| Mortgage Servicing Ratio | Repayments on the housing loan are capped at 30% of gross monthly income for an EC whose MOP has not ended | MAS: TDSR and MSR | Current |
| Stress rate | Higher of 4% or the loan's actual rate | MAS: Calculating TDSR | OTP from 30 Sep 2022 |
| Loan-to-value | 75% (5% minimum cash) with no other housing loan, if the tenure is up to 30 years and the loan ends by age 65; otherwise 55% | MAS: Loan tenure and LTV limits | OTP from 6 Jul 2018 |
| ABSD on a new EC | Fully remitted if a buyer is a Singapore Citizen | IRAS: HDB flats and new EC units-Units) | Current |
| EC income ceiling | S$16,000 for EC sites with tenders awarded before 24 Aug 2026; S$18,000 for sites with tenders closing on or after 24 Aug 2026 | HDB / MND (National Day Rally 2026) | From 24 Aug 2026 |
The numbers
Assumptions
| Item | Assumption |
|---|---|
| EC price | S$1,420,000 |
| Gross household income | S$14,800 a month (within the S$16,000 ceiling for an older EC site) |
| Other debts | None |
| Loan tenure | 23 years (so the loan ends by age 65 at an average age of 42, keeping the 75% LTV tier) |
| Stress rate for MSR | 4% |
| First subsidised flat | 4-room BTO, sold in 2016 (after 3 Mar 2006) |
| Existing flat | Will be sold after collecting the EC keys |
Step 1: what 75% would need
A 75% loan is S$1,065,000. At 4% over 276 months, the instalment is about S$5,908 a month, which is 39.9% of S$14,800. That is above the 30% MSR cap, so the bank cannot lend this much.
Step 2: the MSR limit
- 30% x S$14,800 = S$4,440 a month
- Loan that S$4,440 supports at 4% over 276 months: S$4,440 x (1 - 1.003333^-276) / 0.003333 = about S$800,400
Step 3: cash and CPF needed
| Item | Amount |
|---|---|
| Price | S$1,420,000 |
| Bank loan (MSR-limited) | About S$800,400 |
| Downpayment (cash and CPF; at least 5% = S$71,000 in cash) | About S$619,600 (43.6%) |
| Buyer's Stamp Duty | S$41,400 |
| Resale levy (cash or sale proceeds, not CPF) | S$40,000 |
| Total before legal fees | About S$701,000 |
BSD on S$1,420,000: S$1,800 + S$3,600 + S$19,200 + 4% x S$420,000 (S$16,800) = S$41,400.
The actual monthly instalment depends on the loan rate. At an assumed 2.20%, a S$800,400 loan over 23 years is about S$3,698 a month, but the bank still sizes the loan at the 4% stress rate.
What changes the answer
- Higher income. If household income were S$18,000 (possible only for EC sites with the higher ceiling), the 30% MSR allows S$5,400 a month, supporting about S$973,400 over 23 years.
- Order of sale. If they sell their existing flat before collecting the EC keys, the S$40,000 levy has to be paid in cash rather than from the sale proceeds.
- Longer tenure. A 30-year tenure that runs past age 65 drops the LTV limit to 55% (S$781,000), so it does not raise the loan here.
What to check for your own situation
- HDB: whether you are a second-timer, the exact resale levy amount, and how and when it is collected for an EC purchase. Also ask about any requirement to dispose of your existing flat after taking possession of the EC.
- The developer's sales team: which income ceiling applies to that EC project (S$16,000 or S$18,000), and the option's lapse terms if you don't proceed.
- Your bank: in-principle approval using the 30% MSR and 55% TDSR at the 4% stress rate, and the loan tenure that keeps you in the 75% LTV tier.
- CPF: how much of your Ordinary Account you can use, as CPF cannot pay the resale levy.
- Your own numbers: use our borrowing calculator and stamp duty calculator.
Related reading
- Condo downpayment: 5% cash, 20% CPF, 75% loan
- HDB to condo upgrade: ABSD refund and timing
- HDB resale levy explained
This is a simulated illustration with assumed figures, not financial advice. Confirm your levy with HDB and your loan limit with your bank.
Frequently asked questions
Do second-timers pay a resale levy when buying a new EC?
Yes. If you have already received a housing subsidy, such as buying a BTO flat or a resale flat with a CPF housing grant, you are a second-timer and pay a resale levy when you buy a new EC from a developer. For a 4-room first flat sold on or after 3 March 2006, HDB's fixed levy for households is S$40,000.
Can the resale levy be paid with CPF or a loan?
No. The resale levy is paid in cash, or deducted from the sale proceeds of your existing flat if that flat is sold after you collect the keys to the new home. Any shortfall is paid in cash.
Does the MSR apply to an EC bought from a developer?
Yes. The 30% Mortgage Servicing Ratio applies to loans for an EC whose minimum occupation period has not ended, including new EC units from developers. Banks test it at the higher of 4% or the loan's actual rate, alongside the 55% TDSR.
In this simulation, how much could the couple borrow?
With S$14,800 a month gross income, 30% MSR allows S$4,440 a month. At the 4% stress rate over 23 years, that supports a loan of about S$800,000, so a S$1.42M EC needs about S$619,600 in downpayment, plus S$41,400 BSD and the S$40,000 resale levy.
Is there ABSD on a new EC?
IRAS fully remits ABSD on a new EC unit bought from a developer if the buyer, or any joint buyer, is a Singapore Citizen. The remission is granted automatically once HDB approves the purchase.