Asked by Anonymous
Asked on 12 Feb 2019
(3-room vs 4-room) We want good location and minimum 4-room HDB BTO at Boon Keng in view of having children in future, but currently can only afford 3 rooms BTO comfortably. Is it advisable to get 3-rooms first, and after 5 years MOP, upgrade to bigger apartment?
This is exactly what I'm doing. I'm not planning to have a baby in the 3 room flat. So just husband and wife. Also, this allows us to only pay a $500 mortgage via cash, frees up cashflow for investing.
After 5 years, hopefully straight to condo or landed.
Rule of thumb to follow for home affordability is: Your home should never cost more than 7 X the combined annual income of the family. Preferably 5 X is sufficient. So if household income is 100k, a 500k house is perfect, but never buy more than 700k.
This is a question of wants VS needs. Sure, you can get the 4-room flat, but at the expense of what? Do you have to compromise on your daily expenses, scrimping everyday, etc? With children, you may even need to scrimp even more, and therefore not be able to spend as much as you want on your future children.