How Much Condo Can You Afford After Selling Your HDB

It is the question every upgrader asks: once I sell my flat, how much condo can I actually afford? The answer is rarely the sale price of your HDB. What you can spend depends on how your sale proceeds split between cash and CPF, how much you can borrow under the rules, and the upfront costs of the new purchase. This is how to work out your real condo budget after selling your HDB.

What you actually walk away with

Selling an HDB flat does not put the sale price into your bank account. The money flows in a fixed order: first the outstanding loan is repaid, then your CPF is refunded, then the selling costs, and only what is left is cash.

Illustrative example of HDB sale proceeds. Figures are assumed for illustration only.

The CPF refund, your original CPF plus accrued interest at 2.5 percent a year, is not lost. For members under 55 it returns to your CPF Ordinary Account, where you can use it again for the condo. But it is CPF, not cash, so it helps with the downpayment and not with the parts that must be paid in cash.

Cash versus CPF, the distinction that trips people up

Many upgraders look at the sale price and imagine most of it as cash. In reality a large part of what you "get back" is CPF that simply moves from your flat to your Ordinary Account. That matters because a condo purchase has a cash floor, at least 5 percent of the price must be paid in cash, that CPF cannot cover. So two sellers with the same sale price can have very different real budgets, depending on how much of their proceeds is cash and how much is CPF.

The two halves of your budget

What you can afford is built from two separate pots:

• Your loan. A bank will lend up to 75 percent of the condo price or value, whichever is lower, as long as the repayments sit within the 55 percent Total Debt Servicing Ratio across all your debts. The Mortgage Servicing Ratio does not apply to private property, so only the TDSR limits you here.
• Your downpayment capacity. The other 25 percent, of which at least 5 percent must be cash, funded from your cash savings, your sale proceeds and your CPF including the refund.

Your real budget is the smaller of what your downpayment can support and what your income can borrow.

A simple worked example

Take the figures above: 233,000 in cash and 250,000 refunded to your CPF, so about 483,000 available toward the next purchase, before any existing savings. On a $1.5m condo, you would need roughly 375,000 for the 25 percent downpayment plus about 44,600 in Buyer's Stamp Duty, around 420,000 upfront, which these proceeds can cover with a little to spare, and at least 75,000 of it is comfortably met by your cash. The remaining 75 percent, a loan of about 1,125,000, then has to fit within your TDSR. If your income supports that loan, a condo around this level is within reach. If it does not, your income, not your proceeds, is the real limit.

Mind the ABSD timing

Whether ABSD applies depends on the order of your moves. If you sell your HDB first and the condo becomes your only property, a Singapore citizen pays no ABSD. If you buy the condo before selling your HDB, you briefly own two properties, so ABSD of 20 percent applies upfront, with a remission that married couples with at least one citizen can claim back by selling the HDB within six months. Getting this sequence right, or protecting the remission, can be worth hundreds of thousands, so plan it deliberately.

A considered view

The honest condo budget after selling an HDB is almost always lower than the sale price suggests, because so much of the proceeds is CPF rather than cash, and because your income still has to carry the loan. Work out your real cash, your usable CPF and your borrowing limit before you start viewing, and you will shop with clarity. If you would like, I can work through your actual proceeds and budget with you, and plan the timing so nothing is left on the table.