Yes, for the purchase of an Executive Condominium (EC) in Singapore, the downpayment requirement is typically 5% of the purchase price, and this portion must be paid in cash. Here are the key details regarding the downpayment for an EC purchase:
### Downpayment Structure:
1. **Total Downpayment:**
- The total downpayment required for an EC purchase is 25% of the purchase price.
2. **Cash Component:**
- Out of the total 25% downpayment, 5% must be paid in cash. This means you cannot use CPF (Central Provident Fund) savings or other forms of financing to cover this specific portion.
3. **CPF Usage:**
- The remaining 20% of the downpayment can be paid using your CPF Ordinary Account savings and/or cash.
### Example:
- **Purchase Price:** SGD 1,000,000
- **Total Downpayment:** 25% of SGD 1,000,000 = SGD 250,000
- **Cash Downpayment Requirement:** 5% of SGD 1,000,000 = SGD 50,000
In this example, you would need to prepare SGD 50,000 in cash for the downpayment, while the remaining SGD 200,000 can be funded using CPF savings or additional cash.
### Importance of Cash Payment:
- The requirement to pay 5% of the downpayment in cash ensures that buyers have a financial stake in the property purchase beyond their CPF savings. This is a measure to ensure responsible borrowing and financial planning.
### Financing Options:
- Beyond the downpayment, you can finance the rest of the purchase price through a bank loan, which typically covers up to 75% of the purchase price. The loan amount and terms will depend on your financial eligibility and the bank’s assessment criteria.
### Conclusion:
When purchasing an Executive Condominium (EC) in Singapore, the rule that 5% of the downpayment must be paid in cash is designed to ensure financial prudence and commitment from buyers. This regulation helps maintain a healthy balance between using CPF savings and cash reserves for property investments. It’s essential to plan your finances accordingly and understand these requirements before proceeding with the purchase of an EC.
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