How much must I earn to afford a HDB flat in Singapore? (April 2019)

how much salary to afford hdb flat in singapore - average prices of hdb flat in singapore

Who starts with a spoiler? We do – you can afford to buy a HDB flat in Singapore even on a fresh grad’s salary.

We calculated the minimum monthly salary to afford a resale HDB flat in Singapore using the latest average HDB prices as well as the following HDB policies:

  • You have to pay a minimum of 10% of the purchase price upfront as down payment
  • You can get up to $120,000 in CPF Housing Grants, comprising of a $50,000 CPF Housing Grant, $40,000 Additional CPF Housing Grant (AHG) and $30,000 Proximity Housing Grant (PHG)
  • The maximum HDB loan you can take up is subject to the Mortgage Servicing Ratio (MSR) of 30% and Total Debt Serving Ratio (TDSR) of 60%
  • Are you a loan? Because you got my interest. 2.6% per annum for a maximum tenure of 25 years for HDB loans, to be exact.

So here goes:

how much salary to afford hdb flat in singapore - average prices of hdb flat in singapore

Here’s how we calculated your required salary to afford a HDB flat (i.e. be able to repay your home loan after footing the down payment):

1. To determine the price point of HDB flats of each size and location, we referenced the latest median resale HDB prices (Q1 of 2019).

  • e.g. the median price of a 4-roomer in Ang Mo Kio is $430,455

2. After paying a minimal down payment of 10% of the price of your HDB flat, you’re left with 90% of the cost to foot.

  • $430,455 x 90% = $387,410

3. For simplicity’s sake, we’re assuming you’re applying as a couple and qualify for $50,000 in Housing Grants.

  • So, you’re left with $387,410 – $50,000 = $337,410 which has to be paid via a loan

4. Assuming you take up a HDB loan for this amount, at the existing interest rate of 2.6% per annum and with a loan tenure of 25 years.

  • Taking into account the interest rate, you’ll have to pay off a total of $337,410 x 102.6% = $346,183
  • Which works out to monthly repayments of $346,183 ÷ 25 ÷ 12 = $1,154

5. To fulfill the MSR, this cannot exceed 30% of your gross monthly income.

  • So, to qualify for this loan, you’ll have to be earning at least $1,154 ÷ 30% = $3,847 a month
  • Remember we’re calculating this amount based on a couple buying a HDB flat, which means this digit is the combined income of TWO people.


Please enter your comment!
Please enter your name here