Sing90After a long, bustled day, everyone wants to rush for home and be with family.

Planning to materialize the long term plan of settling down and building a family of your own is not easy and bit confusing as to which best  fit as your starter home. Is it the HDB or EC ? What is financial scheme for its corresponding kind of subsidiary housing and which yields a higher revenue?

This article shows a comparison of the financial commitment and capital progress in acquiring a BTO(HDB)  over Executive Condominium.

Financing of HDB vs Executive Condominium

The standard selling of a BTO (HDB) and EC around north-east region are the following:

HDB, 4 Room flat match with 3 bedrooms and 90sqm, $300,000
EC, 3 Bedrooms, 83sqm, $750,000

HDB Flat via bank loan, Breakdown of financing an $300,000

5% Cash = $15,000
15% CPF = $45,000
Monthly amortization = $887
(base on 80% loan, 30 years tenure and 2% interest rate)

EC through bank loan
Breakdown of financing a $750,  

5% Cash = $37,500
15% CPF = $112,500
Monthly amortization = $2,218
(base on 80% loan, 30 years tenure and 2% interest rate)

Base on Mortgage Servicing Ratio (MSR) which top the amount that might be used on repaying mortgage to 30 percent over borrower’s whole monthly earnings. The rough calculation household combine income required for each purchase for the above example are as follows:

HDB buyer household fuse income: $3,000
EC buyer household fuse income: $7,400

To confidently finance an EC with so minimal worries, the perfect combination for household earnings are close to $7,000 range.  When you and your spouse combine earnings reaches to $6,000 range, it is still a perfect decision  to buy EC unit around EC luxurious projects.

HDB vs Executive Condominium Capital progress income

A 5-year Minimum Occupation Period (MOP) for both HDB and EC need to be enjoyed before they are allowed to sell the said property. The MOP is calculated as soon as the seller hand in the  keys to the flat  or apartment. Soon as the MOP period expires then it’s automatic that the EC status is considered  semi –private  thus gives you the freedom to sell it if desired.  You can sell it to any citizen of Singapore and to PR or single PR. After the long span of 10 years from the TOP date, all limitations are no longer valid thus giving the chance to any foreigners to purchase the property.

 The proposed 5 year growth base on the recent executed market property with similar classification with our example.

 5 year HDB Resale = $390,000

5 year semi privatize EC Resale = $1,060,000

Pricing progress base on procured price
HDB = 30%
Executive Condominium = 41%

Returned on invested capital base on 20% deposit

HDB = 150%
Executive Condominium = 207%

Base on the given illustrations, it simply conveys that purchasing an EC as starter home is a perfect decision. It just need a reasonable amount from your wallet. The property value  is much higher compare to HDB. A figure of $300,000 proposed capital investment  in 5 years, one can quickly swap the EC unit and upgrade to the desired private property of your choice.

To make the story short, if your household earnings goes up more than  $6,000-$7,000 range, it will be a brilliant, smart plan to make your initial home as EC to enjoy the gigantic capital revenue in contrast to those who purchases a BTO HDB flat. One of the famous and worthy investment EC in Singapore is the INZ Residence EC

 Don’t be left out, grab and enjoy the privilege only Singaporeans experiences!