Should i apply for a HLE Loan or a Bank Loan for my BTO?

Hey there,

Would your HLE loan be able to cover your flat amount? If you try bank loan, chances are they will use a similar form of assessment to determine your loan amount. If that is the case, you would either have to fork out the $90K or purchase a cheaper flat per say.. And the last time you would want to do is to take a loan to pay the $90K..

I think if HDB loan can service up to 90% while Bank can only go up to 75% and 5% must be in cash.. end up i think you would be paying more cash with bank loan. If HDB had reduce the loan sum, i would think bank wouldnt loan u more than what HDB would also.

Nonetheless, you can use websites like redbrick to find an agent to assist in comparing all the different bank loans.

Go for a bank loan, and let the bank officer help you to assess the total sum you can borrow.

The bank loan amount is usually smaller than what HDB can lend, the good side is that bank interest is always lower (currently) no matter which bank. so overall you get to save money.

HDB 2.6% Bank loan of 1.8x%

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-pers...

Next, let's understand how long we have before we need to fork out the $90k. For instance, the house may be ready in 2 years' time. As a result, your partner and you will need to save $45k together a year. If we divide it equally, each person will have to save $22.5k, or $1,875 monthly.

Next, create a budget that is capable of helping you to plan for the future. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly...

While this is ongoing, it may be worthy to note that you may apply for a HLE loan again before you collect your keys - as your income increases, there exists higher probabiltiy for a higher loan granted.

At the same time, it is worthy to note that for bank loan, you will need to pay a downpayemnt of 25% of the purchase price, of which 5% must be in cash. With this in mind, you will need to understand your cashflow and plan accordingly. On top of that, focus on the long-term instead of just the downpayment alone. You will need to underestand the importance on the ability to sustain the mortgage in the long-term.

By the way, it is also important to plan and set a budget for home renovation, and try to avoid renovation loan whenever possible.

If you need my help to run through a detailed calculation and to do a comprehensive financial planning, send me a coffee invite: https://www.work.pzl.sg/#coffee

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