Are you planning to purchase a home but are in a dilemma on whether to purchase via Build-To-Order (BTO) or to get a resale home? What are the considerations that you would have to think about before making your decision? In this guide, we will give you some useful information for your home purchase, so that you can go with the option that suits your situation and finances the best.

Understanding BTO (Build-To-Order)

A BTO flat is a newly-built HDB flat which is launched for sale before the construction of the buildings starts. A BTO flat has a 99-years lease. In order to purchase a BTO, buyers will have to submit their application and the Housing & Development Board (HDB) will decide who gets the slot for the homes through balloting. Buyers will usually have to wait for estimated 3-5 years in order for the constructions of the flats to be completed.

The prices of the HDB flats usually depend on the maturity and popularity of the estate. For example, mature estates are more expensive compared to non-mature estates. Examples of mature estates include Queenstown, Clementi, Ang Mo Kio, Bishan and Pasir Ris, whereas non-mature estates are Yishun, Bukit Panjang, Sembawang and Sengkang among others.

Understanding Resale Purchase

Resale flats are sold in the market and generally have shorter tenure than BTOs. Buyers do not have to wait years to move into the flats as it is already built and all they have to do is to purchase from the first owner and move in once the paperwork is settled. The price of a resale flat is more expensive than for a BTO as it is subjected to demand and supply. You will have to standby a maximum cash deposit of $5,000 to purchase a resale flat. This is inclusive of the “option fee” that you need to pay in order to “chope” the house that you chose.

BTO vs. Resale


BTO flats

Resale flats


  • Price is determined by the maturity of the estate

  • Downpayment can be done in two separate instalments

  • Previous owner ask for a price

  • When there is more demand than supply, the prices tend to increase

  • You may have to pay COV (cash over valuation), which is the difference between the sale price of the flat and its actual valuation

Lease tenure

  • 99 years lease

  • Less than 99 years lease


  • Usually smaller

  • Usually bigger

Waiting time

  • 3-5 years for construction to be done

  • Minimum 3 months

Besides purchasing a BTO flat or resale flat, HDB also gives an option if you would like to purchase a Sales of Balance Flat (SBF). The purchasing process is similar to the BTO flats whereby you will have to ballot. However, you do not have to wait for 3-5 years to move in. Sales of Balance flats are flats which HDB pools together as balance flats (unsold) from their previous launches for buyers to purchase.

Understanding HLE and Bank Loan

In order to purchase a home, getting a home loan is necessary for most of us. You can choose whether you would like to get an HDB loan or a bank loan.

HDB Loan

If you wish to take up an HDB loan, you will have to apply for HLE (HDB Loan Eligibility) to find out whether you qualify to get a loan, what the maximum loan amount is that you will be eligible for, what your monthly instalments and repayment period will be etc. In order to be qualified for an HDB loan, you will have to be continuously employed with CPF contributions for at least 3 months if your basic salary is fixed. If you are earning an income which does not contribute to CPF, you will have to be in continuous employment for at least 6 months and at the same time have a consistent cash flow in your bank account for 6 months, to prove you are employed.

In order to get an HDB loan, one of the home buyers has to be a Singapore citizen not having owned any private residence in the last 30 months. Besides that, they can only own one commercial property.

Bank Loan

On the other hand, traditional bank loans have less restrictions compared to HDB loans - however, the banks will perform a credit check before they can approve your loan. Bank loans generally have lower interest rates than HDB loans, but their rates may increase after the second or third year.

HDB Loan vs. Bank Loan


Bank loan

HDB loan

Interest rate

Up to 1.5%, expected to increase after 2 years

2.6% (consistent)


20% can be paid using CPF

5% to be paid in cash

15% can be paid using CPF

Loan to value ratio

Up to 75%

Up to 85%

Early repayment penalty

Subject to each bank, but usually 1.5%

No penalty

Late repayment penalty

Usually less lenient

Usually more lenient

Housing Grants

When applying for your new home, there are a few grants that you can get from HDB. The two common grants are Enhanced CPF Housing Grant (EHG) and Proximity Housing Grant (PHG).

Enhanced CPF Housing Grant (EHG)

The Enhanced CPF Housing Grant is for buyers who are singles or couples / families with an average monthly household income of less than $4,500 or $9,000 respectively. In order to be eligible, one of the buyers has to be currently employed having worked for 12 consecutive months. The buyer will have to purchase a house which has more than 20 years of its remaining lease.

Proximity Housing Grant (PHG)

The aim of PHG is to get singles and couples / families to stay close or with their parents. This grant is mainly for buyers who are planning to get a resale flat.

In order to be eligible for a PHG, the buyers must purchase a flat which is within 4 km radius of their parents’ home. The buyer is not able to get another PHG grant if they have gotten it previously. The other criteria is that they can only purchase a resale house which has a remaining lease of at least 20 years.

The amount of the grant will depend on whether they purchase a home within 4 km radius of their parents or stay in the same resale flat as their parents. Buyers can get grants of up to $20,000 or $30,000 respectively. Single buyers are also eligible for the grant, for up to $10,000 or $15,000 respectively.

Before you decide to purchase your dream home and take up a grant, you should note that you will have to refund the principal CPF amount that is used to purchase the flat and the accumulated interest if you decide to sell your HDB flat.

Considerations Before Making Your First Home Purchase

1. Waiting Time

If you do not mind waiting 3-5 years for a home, you can purchase a BTO. You will also have to consider the time that is used to ballot for your new home. HDB new sales launches four times a year. If your balloting fails one time, you will have to wait till the next sales launch and try again. Newly married couples who are willing to live with their parents before they get a house can consider buying a BTO flat.

On the other hand, if you are unable to wait years to move out, you can choose to purchase a resale house since it will take a minimum of three months to get the keys once you have made your choice of home.

2. Costs Needed

Being a newly married couple, you have to consider your financial stability. By purchasing a BTO, you would not have to worry about having to pay a deposit and other expenses in cash as you can pay fully via CPF.

As for the resale flats, you will have to standby some cash for expenses such as the option fee and agent fee. At times, you may even have to pay COV and this can cost you as much as $10,000 - $40,000.

3. Renovation Cost

You will have to consider the renovation cost needed as well. This is something first time buyers would usually overlook. When purchasing a BTO flat, you can opt for additional fittings and floorings from HDB. You will need minimal renovation and can spend a minimal amount on it since the flat itself is a “blank canvas”.

When purchasing a resale house, you will have to consider the possibility of needing to replace their old fittings to new ones. This includes renovation work such as tiling, plumbing and electric work. It may cost more compared to BTOs as the renovation firm may have to dismantle and get rid of aged facilities.


Before making your final decision for your first-time home purchase, it is important to understand what kind of homes you are eligible to buy (e.g. public housing / private property or a 4-room / 5-room flat). Ensure to plan your budget accordingly. In order to plan your budget, do extensive research regarding the different costs you will have to plan for. Always ask your friends and families, who have just bought a house, about their experiences!