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How Much to Budget for A New Home: A Complete Breakdown of Payments

Eugenia Liew
There are many milestones in life, but none will cost you quite as much as buying a new home. No matter the sort of property you’re looking for—be it HDB flat, condo or private property; bachelor pad or family home—a property is one of those big ticket purchases you definitely want to plan in advance for.
But with so many facets to financing your dream home, getting started can be a daunting task. Don’t fret, though. This guide will walk you through the different aspects of budgeting for your new home, from saving up to pay for your house, to securing your mortgage, right down to renovation costs!

First Things First…

Before we get into the breakdown of costs and payments, here are some general tips to bear in mind while shopping and budgeting for your new home.

Tip 1. Before Buying A New Home, Plan Your Finances

Before you even start shopping for your next home, it’s good to have an idea of what your finances look like. Doing an affordability check will give you a rough idea of the type of housing you can afford, or if your financial situation can support the purchase of your ideal home.
Tip: Use the PropertyGuru Affordability Calculator to help you work out a suitable budget.
If you’re buying an HDB flat or executive condominium (EC), don’t forget to also check if you’re eligible for CPF housing grants and if yes, which ones are available to you. Grants can be a way to help lower your financial commitments.
After working out your budget and while shopping for your new home, it’s time to secure your home loan or mortgage.

Tip 2. While Shopping for A New Home, Start Thinking About The Home Loan

You can’t secure a mortgage until you have decided on the property you’d like to buy. However, you can plan ahead and start thinking about your mortgage while shopping around for homes. For example, you can apply for an In-Principle Approval (IPA) to estimate how much your preferred bank is willing to loan you for your new home purchase. This way, you minimize the risk of any unwelcome “surprises” to do with securing a home loan.
If you already know how much savings you have and how much you need to borrow, you can write down your mortgage plan.

How to Budget for Your New Home

Now, onto the budgeting breakdown. For this guide, we’ve used…
  • 4-room resale flat ($500,000)
  • Bank loan (1.6%)
Because there is a lot to consider and plan for, we’ve also split the breakdown into…
  • Upfront mortgage payments
  • Long-term and recurring payments
  • Renovation costs
  • Furnishing costs
With that, hang tight and here we go!

Too Lazy to Do This On Your Own?

Get help from our home loan advisors — it’s free! They’ll be able to help you work out the sums and give expert recommendations on your mortgage options. You can also compare the best mortgage rates on PropertyGuru Finance!

I: Upfront Mortgage Payments

Type of payment
Amount payable
Option fees
$5,000 (cash)
Downpayment
(Bank loan, min. 25%)
$125,000 (cash and/or CPF)
Agent commission fees
$5,000 (cash; paid upon completion of the deal)
Conveyancing fees
$5,000 (cash and/or CPF)
Stamp duties
$9,600 (cash and/or CPF)

Option Fees

While viewing potential units, you might come across one that fits your requirements of an ideal home, but you want to give it some consideration before committing. What can you do if you don’t want someone else to buy it before you do? ‘Chope’ it, of course!
An Option to Purchase (OTP) with the seller acts like a ‘reservation’ on the house, giving you up to 21 calendar days to decide if you will go ahead with the purchase.
For a 4-room resale flat, this will cost up to $1,000 before signing the OTP, and the remaining up to $4,000 upon exercising the OTP.
  • Total payable: Up to $5,000
  • Payment method: Cash only

Downpayment

After deciding on your purchase, the next big step is putting the money in.
Let’s say the unit is $500,000. You’re considering your loan options, which will determine how much you can borrow to finance your home.
Note that the Loan-To-Value (LTV) Ratio is based on the property’s valuation, and any Cash Over Valuation (COV) will need to be paid for in cash. At this stage, you may want to do some research on how to estimate the property’s valuation, as HDB will only conduct the valuation after the OTP is issued (i.e. after you formally agree to buy the unit).
For simplicity, in this example, we’re assuming the valuation is $500,000 as well.
For this example, we’ve used an interest rate of 1.6%, which is an estimate of current bank mortgage rates. For bank loans, the maximum LTV is 75%. This means you’d need to pay just at least 25% upfront.
$500,000 valuation = $375,000 (max. LTV for home loan) + $125,000 (cash/CPF upfront)
  • Total upfront payment: $125,000
  • Payment method: Of the 25% downpayment, 20% can be paid in cash and/or CPF, 5% in cash only.
As mentioned above, at times, the selling price may be higher than market valuation. For example, if the seller quotes $520,000, the additional $20,000 is referred to as the Cash Over Valuation (COV). COV is payable in cash, but we will only know how much the exact COV is after the issuance of the OTP.
Note: You can take an HDB loan as well, but the interest rates are currently higher at 2.6%. However, the LTV is also higher at up to 90%, which means you may be able to borrow a larger sum and pay less downpayment.

Other Upfront Payments

The option fees and downpayment for your new flat is not the only upfront payment you have to worry about. Besides the agent commission fees (which are paid once the deal is completed), there are also legal fees involved. If you engage a property agent as a buyer, the commission rate is about 1%, though this negotiable.
  • Total payable: $5,000
  • Payment method: Cash
Some law firms quote an all-in cost, wherein the legal fees include payment to lawyers for processing the mortgage of the property, as well as stamp duties – taxes on the documents relating to the property payable to the Government.
  • Total payable: $2,500 to $5,000 in conveyancing fees, $9,600 stamp duty
  • Payment method: Cash and/or CPF

II: Long-term and Recurring Payments

Mortgage repayment
$1,518/month
Basic home insurance
$100/year (cash)
HDB Home Protection Scheme
$305/year (cash)
It’s not the end of the story yet once you’ve completed your downpayment. Remember, you still have up to 75% of the house to pay for, along with some other recurring charges that might catch you off guard.

Mortgage Repayments

The most conspicuous long-term payment is your mortgage. These are paid back to your lender (such as the bank) in monthly instalments until you have paid back the loan principal and interest in full. The duration of your mortgage repayment typically depends on the length of your home loan.
Supposing the interest rate is 1.6% and the loan tenure is 25 years, you would be paying an estimated $1,518 per month for the period of your package. After your package period (e.g. three or five years), the rates will revert to a market rate (typically higher), or you can refinance to keep costs low.
  • Monthly payable: $1,518

Insurance Premiums

There are various property-related premiums you might be subjected to. These can include home insurance or fire insurance as well as insurance for your mortgage, or the HDB Home Protection Scheme (HPS). With a basic home insurance plan, your yearly premium would cost an estimated $100 or less.
As for the HDB HPS, CPF has a calculator to work out the yearly premiums for you. For the $375,000 loan amount over a 25-year tenure, this works up to an annual premium of about $305 for 22 years.
  • Yearly payable: $100 home insurance premium, $305 HPS

Renovations and Furnishings

Now that your finances are in order, you are ready to buy your house! The next part of the home ownership is probably both exciting and daunting for many people. That’s right, renovations and furnishing your new home will also put quite the dent in your wallet.

Financing The Renovations

As with deciding on the type of housing, base your renovations and furnishing on yours and your family’s needs. Be aware of your financial situation as well; unlike paying for the house itself, there are no subsidies or grants for renovations and furnishing. Some banks do provide financing in the form of renovation loans, but if you can, it’s always recommended to pay what you can in full.
The costliest works usually involve hacking, flooring and false ceilings, so take some time to consider if these renovations are absolutely necessary. Remember, there’s no taking back a wall that’s been broken down, and it will only cost you extra to rebuild it if you change your mind.

Interior Designer and Contractor Services

You might need to engage the help of an interior designer and/or contractor but do note that these will also include additional consultation and project fees. On the other hand, you can try sourcing for your own materials and hire a contractor, but this could also be tedious and difficult if you are unsure of what to look out for.

Budgeting for Renovations

For a resale flat, the extent of the renovations often depends on the condition of the house. ‘Pre-loved’ units that are well-kept often require less extensive renovation, but more often than not, a key space that is renovated is the toilet. To help you estimate your potential renovation costs, Qanvast has a nifty calculator where you can enter the details of your flat, and the sort of works you require, such as hacking, floor tiling, and more.
Another aspect to renovation for consideration is the carpentry. For areas such as the kitchen and bedrooms, it is common to have built-in cabinets and wardrobes, and these are usually factored into the renovation costs. For our 4-room resale flat example, let’s have a look at what renovating the kitchen and bathroom will be like at the minimum.

III: Renovation Costs in Singapore

As you can see, even doing the bare minimum will cost you at least $10,000. It’s more probable that the total works will cost more than the estimates below, so be sure to set aside a hefty enough budget!
Kitchen
Hacking
$100 to $500
Masonry
$200 to $1,300
Carpentry
$100 to $4,300
Plumbing
$100 to $200
Bathrooms
Hacking
$100 to $500
Masonry
$100 to $1,500
Carpentry
$200 to $1,200
Plumbing
$100 to $400
Other works
Electrical
$300 to $1,700
Painting
$200 to $1,400
Glass & Aluminium
$400 to $2,600
Cleaning & Polishing
$300 to $1,100
ESTIMATED BUDGET
$10,100 to $12,120
Source: Qanvast

IV: Furniture Costs in Singapore

After renovations are completed, you’re now ready to make your new home liveable and ‘grammable. Furniture and appliances will also set you back a great deal especially if you are making many purchases at a go. Consider if you want your house to be fully furnished before moving in, or if you would rather start with the essentials and gradually fill your living space.
Here’s a list of “starter” furniture you would need for your home and their estimated prices (based on the cheapest available options we could find).
Furniture
Cost
Double bed (1)
$248
Single bed (2)
$256
Sofa (1)
$545
TV (1)
$449
Refrigerator (1)
$448
Stove/Gas hob (1)
$128
Microwave oven (1)
$109
Washing machine (1)
$299
Air-conditioning (4)
$3,396
Dining table (1) and chairs (4)
$99
Clothing cabinets (4)
$476
Total
$6,453

The Total Budget

Now, to answer the million-dollar question; how much should you budget for your new home? While the numbers remain highly subjective to the type of housing, the extent of renovations and also the quality of furnishings, based on our 4-room flat example, you would need to prepare at least $56,553 to buy the property and make it liveable.
Other upfront costs
$15,000
Includes option fees, conveyancing fees and agent’s commission. Assumes you have enough in CPF OA to cover stamp duties.
Renovations
$10,100
An estimate based on the above
Furnishings
$6,453
An estimate based on the above
Total
$56,553
Don’t forget the monthly mortgage ($1,518) and other yearly expenses too ($100 for basic home insurance and $305 for HDB HPS).
Despite the modest estimations, that still isn’t an amount to sneeze at! Though it may require a lot of research and calculation, being able to own and live in your ideal home is certainly worth the effort.
To help quicken your search, be sure to check out PropertyGuru’s home listings and compare mortgage packages on PropertyGuru Finance. If you need more guidance along your home-buying journey, reach out to our home loan advisors who can offer personalised recommendations (it’s free!).
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