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For most Singaporeans, buying a Build-To-Order (BTO) flat is one of the biggest financial decisions they will make. Home ownership remains a cornerstone of Singaporean life, with HDB flats continuing to be the preferred choice for many young couples and families. However, with evolving policies, rising property prices, and shifts in market conditions, understanding the home-buying process in 2025 is more important than ever.
While the HDB website provides a wealth of information, it can be overwhelming, filled with regulations, eligibility requirements, and financial considerations that may not always be immediately relevant to first-time buyers. Navigating home loans, CPF housing grants, and the latest changes to BTO and resale policies can be complex.
To simplify the process, we have identified the five most important things you need to know as a first-time HDB homebuyer.
(1) 5-Year Minimum Occupation Period (MOP)
When you purchase a brand-new flat from HDB, you will need to live in it for a minimum of five years. For flats categorised under the Prime or Plus, the minimum occupation period is ten years. These requirements ensure that public housing remains accessible and supports long-term home ownership, rather than speculative buying
Read Also: Standard, Plus & Prime Flats: Guide To Understanding The New Framework For HDB Flats
This five-year or ten-year period begins when you collect your keys from HDB. Given that most Build-To-Order (BTO) flats take around three to five years to be completed based on current estimates, this means that from the time of purchase, it could take close to a decade before you fulfil your Minimum Occupation Period (MOP).
During this period, you are also restricted from purchasing private properties, both locally and overseas. It is also not possible to sublet your entire flat, as you are required to live in it throughout the MOP, although renting out individual rooms is permitted.
The five-year (or ten-year) MOP rule is a key consideration that many overlook when buying their flat. There have been cases where homeowners have progressed well in their careers and were financially ready to invest in private properties during a market downturn, but were unable to do so due to this restriction.
It is also important to note that even if you purchase a resale flat from the open market, the MOP still applies, regardless of whether you use a CPF Housing Grant.
Read Also: 6 Lesser-Known Facts About Minimum Occupation Period (MOP) For Singaporeans
(2) Resale Levy Payable
This is one of the important conditions that many first-time HDB homebuyers completely miss, and which they end up complaining about in the future.
When you purchase a BTO flat, it is considered a subsidised flat. There is a resale levy, which you have to pay if you sell your flat and then subsequently buy another subsidised new flat from HDB.
The resale levy depends on the size of your flat.
| First Subsidised Flat Types | Resale Levy |
| 2-Room | $15,000 |
| 3-Room | $30,000 |
| 4-Room | $40,000 |
| 5-Room | $45,000 |
| Executive | $50,000 |
It is important to keep this in mind when planning for any future housing upgrades. For instance, a couple may initially feel that a three-room flat provides sufficient space for their needs over the next five years. They might assume that upgrading later would be a straightforward option if they require more space.
This approach is logical, but some homeowners may not realise that selling their current flat and purchasing another new HDB flat comes with a resale levy. This additional cost can impact their budget and housing plans. Had they been aware of this earlier, they might have opted for a different housing choice from the outset.
Read Also: 4 Misconceptions Singaporeans Have About HDB Resale Levy
(3) Bank VS HDB Loan
In the past, bank loans have been a popular choice among homebuyers, largely due to their lower interest rates compared to HDB loans. However, since the sharp rise in interest rates in 2022, the cost of borrowing from banks has become less predictable.
Many bank loan packages, particularly those pegged to the Singapore Overnight Rate Average (SORA), started with attractive teaser rates but have since increased due to market volatility. Once the lock-in period ends, borrowers may face significantly higher repayments. Meanwhile, the HDB housing loan, though technically a floating rate loan, has remained stable at 2.6% for over two decades, providing more predictability for homeowners.
Another key change is the downpayment requirement. Previously, HDB loans required only a 15% downpayment, but this has now been raised to 25%, aligning with the requirement for bank loans. For those opting for an HDB loan, this downpayment can still be fully covered by CPF savings if sufficient funds are available, whereas bank loans require at least 5% of the downpayment to be in cash.
With interest rates remaining uncertain in 2025, homebuyers should carefully evaluate their financing options, considering not just the interest rates but also the upfront costs and long-term affordability of their loan choice.
Read Also: Guide To Understanding How SORA-Pegged Home Mortgage Loans Work
(4) HDB Grants
You want to maximise the amount of grants that you are entitled to when you are buying your first BTO flat.
Enhanced CPF Housing Grant
Enhanced CPF Housing Grant (EHG): Eligible first-timer families can receive up to $120,000, with the exact amount tiered based on income—the lower the income, the higher the grant.
Eligibility Criteria
Income Assessment: If one partner has been employed for more than a year while the other is still studying or has been working for less than a year, the household may still be eligible for grants. In such cases, HDB will assess the income of the working individual as the total household income.
Employment Duration: To qualify for these grants, at least one applicant must have been continuously employed for 12 months before the application and must be employed at the time of application. hdb.gov.sg
Read Also: Complete Guide To HDB Housing Grants In Singapore For Different Types Of Flats
(5) No Backing Out
Purchasing a property is one of the biggest financial commitments a person can make. Once you have paid the downpayment for your Build-To-Order (BTO) flat, you are locked into the purchase. Backing out at this stage would mean forfeiting your deposit, which is typically 10% of the flat’s purchase price.
This is standard practice across all property transactions, including private properties. However, unforeseen circumstances may sometimes prevent buyers from completing the purchase. For instance, if you and your fiancé(e) decide not to proceed with the marriage, you may no longer be able to form a family nucleus—a key eligibility requirement for purchasing an HDB flat.
In such cases, HDB may allow some flexibility upon appeal, such as permitting the formation of a family nucleus with another eligible partner or family member. However, if no alternative arrangement can be made, the flat may have to be given up, resulting in financial and opportunity costs.
Given the long commitment involved in buying a home, it is crucial to consider both personal and financial stability before committing to a property purchase.
Read Also: What Happens If You Cancel Your BTO Application At The Different Stages
The post 5 Things You Must Know Before Buying Your First HDB BTO appeared first on DollarsAndSense.sg.
