AMA Stacked Homes
Asked 3w ago
Would a private 2 bedroom condo or HDB be better for a first time home owner? Thanks!
We suggest cleaving to the traditional 3-3-5 rule which is also endorsed by CPF.
The total price of the property should not exceed five times your combined annual income
The total monthly costs should not exceed 30 per cent of your monthly income (note that officially, you could qualify for a loan even at twice this level. The Total Debt Servicing Ratio - or TDSR - caps your home loan repayments, plus other debts, to 60 per cent of your monthly income). But just because you can reach 60 per cent doens't mean you should.
Have 30 per cent of the asking price ready, and ensure it's not wiping out all your savings when you pay it.
As an aside:
If you want to offload the condo later, you will incur Sellers Stamp Duty (SSD) if you sell within the first three years of your purchase. So do be sure you're comfortable during that time (e.g if there's going to be a major change to your financial situation within that time and you need to sell, it could really hurt). Consider the financial situation in the near future as well.