HDB to EC, Condo, or Landed Property: How Much Must You Save to Upgrade in Singapore (2022)

PropertyGuru Editorial Team
HDB to EC, Condo, or Landed Property: How Much Must You Save to Upgrade in Singapore (2022)
Time flies! You’ve been living in your very first HDB flat for almost five years now. And with that Minimum Occupation Period (MOP) milestone fast approaching, you might be considering the options for your next housing move.
Should you sell your flat? How much will you make from it? Is the profit enough for you to buy an Executive Condo (EC), a private condo, or even a landed property?
In this article, we’ll do the math for a typical Singaporean family looking to sell their first home and ‘upgrade’ to a different property type – be it an upgrade from HDB to EC, HDB to private condominium, or HDB to landed house.
We’ll show you how much money you need to save for your future downpayment and mortgage, depending on the property type.
But first, let’s talk about your current HDB flat.

Selling Your HDB Flat After MOP: How Much Can You Make?

When it comes to first homes, many Singaporean couples opt for BTO (Built-to-Order) flats, and for good reason: There’s a high chance that you will make a decent profit when you sell it after the MOP.
That’s because BTO flats are sold directly by HDB at a government-subsidised price. After the MOP, you can sell it at the market rate, which is generally significantly higher.
This ‘investment strategy’ has been such a roaring success that HDB BTO flats for certain locations are regularly oversubscribed. The potential windfall from selling your HDB flat is such a phenomenon that the Government has stepped in with a new Prime Housing Location model to manage the ‘lottery effect’.
With that in mind, let’s look at the example of Mr and Mrs Wong, who bought a 4-room BTO flat in Punggol for $300,000 in 2011, and moved in in 2016. They qualified for a $5,000 housing grant and took a 25-year HDB loan with a monthly instalment of $1,203.
After meeting the MOP requirement, they sold it in 2021 for $480,000. (This is an estimate based on similar properties on the HDB Resale Flat Prices portal, which you can also apply to your own flat.)
Of the sale proceeds, the Wongs will need to return the following to their CPF accounts, with interest (2.5% per year, compounded over five years):
  • Housing grant: $5,000 + accrued interest = $5,657
  • CPF used to pay for the BTO downpayment: $30,000 + accrued interest = $33,942
  • CPF used to pay for mortgage so far: $72,180 + accrued interest = $94,110
That’s basically an injection of $133,709 into their CPF OA, which can, of course, be used for housing. As for cash, the Wongs can pocket $57,571 – that’s what’s left after settling their remaining mortgage of $288,720.
In total, that’s about $191,280 of funds that can go into their next home purchase. Hurray!

How Much Does It Cost to Upgrade HDB to EC or Private Property?

So we’ve seen an average Singaporean couple ‘profit’ quite substantially from their BTO flat. But is it enough for the upgrade of their dreams?
Well, it depends on whether they want to upgrade from HDB to an EC, a private condo, or a landed house. Here’s a sneak peek of how much the Wongs need to top up for each type of upgrade, based on sample property prices:
Upgrading FromTop Up Required
HDB to EC (executive condo)$58,720
HDB to private condo$183,720
HDB to landed house$558,720

Upgrade HDB to EC (Executive Condo): How Much Is It?

The most affordable of the three options is to upgrade from HDB to EC, or executive condo. For the uninitiated, HDB’s executive condo scheme was set up to provide hybrid public-private housing for upper-middle-class Singaporeans.
ECs are built by private developers – so they look like condos, complete with condo facilities – but sold by HDB. To qualify for an executive condo, buyers have to meet a number of HDB executive condo eligibility criteria.
Luckily, the Wongs still meet the income ceiling of $16,000 and are eligible to apply for an EC. They also managed to find a bargain among the new HDB EC launches – a 2-bedroom unit for just $1 million.
So far so good. But here’s the kicker: Although ECs fall under HDB, buyers cannot take out an HDB loan for EC purchases.
Given that an HDB loan for EC isn’t an option, the Wongs will need to get a bank loan instead. And going to a bank also means they’ll have to fork out 25% ($250,000) for the downpayment, of which 5% ($50,000) must be in cash.
With the $191,280 they made from their BTO sale, the Wongs fall a little short of that downpayment. They need to top up at least $58,720 in cash or CPF to afford it.
The remaining $750,000 will be the mortgage. With a 25-year loan at 2% interest, the Wongs can expect their monthly instalments to cost about $3,179. (We’re giving a higher approximate for interest rates even though there is a low interest rate environment as interest rates are expected to gradually rise in 2022/2023).
For ECs, the housing loan repayment must adhere to not only the Total Debt Servicing Ratio (TDSR) but also the stricter Mortgage Servicing Ratio (MSR), which caps your home loan repayments at 30% of your income.
Working backwards with the $3,179 per month payment, that means the Wongs’ combined income must be at least $10,597 a month. If they are not earning enough, then they will have to increase the downpayment and borrow less in order to upgrade from HDB to EC.

Upgrade HDB to Private Condo: How Much Is It?

Look and feel-wise, private condominiums are pretty similar to ECs. The main difference is that because it’s 100% private, there’s none of that income ceiling or minimum occupation period stuff to deal with. There are also more options when it comes to location and lease.
Oh, and HDB executive condo prices tend to be significantly lower than that of private condos. In the case of the Wongs, let’s say the couple searched for a budget-friendly private condo on PropertyGuru and finally found a unit they liked for $1.5 million.
With a bank loan, that means a downpayment of $375,000 – of which 5% ($75,000) must be in cash. Since the $191,280 from their BTO sale is not enough, the Wongs will need to top up at least $183,720 in total.
Of this, they need to top up at least $17,429 for the cash component (since the $57,571 from the BTO sale is not enough). The rest of the money can be in their CPF OA.
With a home loan of $1,125,000, the estimated monthly instalments will be $4,768.
For private property, only TDSR (but not MSR) apply to your monthly loan repayments. With the announcement of the new 2021 property cooling measures, the TDSR has been adjusted down from 60% to 55% So as long as your total debt obligations don’t exceed 55% of your income, you’re within limits.
Assuming the Wongs have no other loans, buying a private condo would be acceptable with a combined income of at least $8,669. Paradoxically, that’s lower than the income required for an EC.

Upgrade HDB to Landed Property: How Much Is It?

Not many Singaporeans are willing to take such a huge leap, but for the sake of completion, let’s look at the numbers for upgrading from BTO to a landed house.
An ‘entry-level’ terrace house in Singapore would cost at least $3 million. With a bank loan, a 25% downpayment is $750,000, of which $150,000 must be in cash. Yikes! We sure hope the Wongs have a spare $558,720 lying around, of which $92,429 must be in cash.
After making the downpayment, the Wongs will be saddled with a home loan of $2.25 million, which works out to $9,537 in monthly instalments.
The couple needs to collectively earn at least $17,340 a month to fall within the 55% TDSR requirement. Even so, we’re talking about almost ten grand a month in mortgage instalments, which is definitely not for the faint of heart.

Conclusion: Upgrade Within Your Means

Once you crunch the numbers, upgrading from an HDB flat to a swanky condo is not as easy as it sounds. Even the cheapest option – if you upgrade from HDB to EC – requires a top-up out of your own savings.
With the enduring work from home and COVID-19 situation, perhaps upgrading from a smaller to larger HDB flat might be more affordable. You can use the money to renovate your HDB flat nicely.
But for those who have their heart set on upgrading your HDB flat to a different property type altogether, know that it is certainly possible. However, it does require planning. Homeowners should work out a savings plan for their dream home upgrade, and not just count on capital appreciation alone.
To help you work out the sums, use the PropertyGuru mortgage affordability calculator.

Affordability Calculator

Estimate what you can comfortably spend on your new home

Also, do consider the increased home loan obligations that come with an upgrade. Upgrading can double, triple or even quadruple your monthly repayments! Unless you earn so much that your current HDB mortgage is practically child’s play, think carefully before committing to an upgrade.
For more advice on home affordability and working out your loan, reach out to PropertyGuru Finance home loan advisors to get our free, honest, no-obligation expert advice.
For more property news, content and resources, check out PropertyGuru’s guides section.
Need help financing your latest property purchase? Let the mortgage experts at PropertyGuru Finance help you find the best deals.
This article was written by Clara Lim, who loves to read, write, and go on very long train rides. Her dream home is a tiny house in the woods, but she’s currently living happily with her pets in a resale HDB flat.

    More FAQs about HDB to EC Upgrading in Singapore

    Provided you meet the eligibility criteria, you can buy an EC after owning an HDB flat — as long as you have only ever owned one HDB flat (BTO, resale, EC, or DBSS).

    Yes, you can, provided you have the financial ability to do so. Do read the article to find out more about how much it takes to upgrade from HDB to EC.

    Sorry, no. Although the EC might take a few years before it's complete, you can only start applying for an EC after completing the MOP on your HDB flat. The same applies to HDB BTO too.

    HDB flats and ECs are very different and can't really be compared apple-to-apple. You'll need to decide on the best option given your finances, income level, and personal preferences among other factors.