Working Out the Math for Your Second HDB Flat

Buying a second flat is no walk in the park when it comes to financial commitment. It's important to consider various factors before diving in. So, let's delve into the details to ensure you're well-prepared before investing in your second home.

Calculating your expected sale proceeds

Have you estimated the amount you'll receive from selling your current flat? Since this cash will contribute to your budget for the next flat, it's crucial to have a realistic estimate. This will help you figure out how much you can afford to spend. It's simple math!

To get a rough idea of the cash proceeds from selling your flat, you can use HDB's Sale Proceeds Calculator. Just input details like your outstanding mortgage loan, CPF funds utilized (including interest), resale levy (if applicable), and other payments due.

Resale levy

If you're planning to buy a resale flat from the open market, you don't need to worry about the resale levy.

The resale levy applies to those purchasing a new flat from HDB who have previously received some form of subsidy for their first flat. This subsidy could have been through the purchase of an HDB flat or a resale flat with CPF housing grants.

As new HDB flats are sold at a subsidized price, the resale levy ensures a fair distribution of public housing subsidies between first-time buyers and those buying their second flat.

Grants available

Second-time home buyers may also qualify for housing grants. If you're purchasing a resale flat within 4 km of your parents' or child's current residence, you may be eligible for the Proximity Housing Grant. This grant aims to support families who wish to live in close proximity for mutual care and support.

To check if the resale flat you're considering falls within the required distance, you can use HDB's Distance Enquiry for Proximity Housing Grant e-Service.

Taking up a second HDB loan

If you're planning to take a second HDB loan, it's important to note that the loan amount will consider the funds from your CPF and the cash proceeds from selling your current flat. This measure ensures responsible borrowing.

If you decide to sell your current flat after purchasing your next one, your HDB housing loan will initially have a commercial interest rate. However, once you sell your current flat and use the proceeds to repay the loan, the interest rate will be converted to the concessionary rate.

Contra Facility

If you're looking to sell your existing HDB flat and buy a new one simultaneously, you might want to consider applying for the Contra Facility. This facility allows you to use the cash and CPF proceeds from the sale of your existing flat to purchase your next flat concurrently. It can help reduce the amount of cash you need upfront, as well as the mortgage loan amount and subsequent monthly repayments. With the Contra Facility, you can even collect the keys to your new flat and start renovating it while selling your existing flat.

We hope this information has made financial planning for your second HDB flat less overwhelming. Follow us on Facebook for more helpful tips on buying and living in an HDB flat.

Source: mynicehome.gov.sg