Can you really afford a private property? A step-by-step affordability breakdown for Singaporeans.

Muhammad Ferdi
May 2
2 min read

Updated: May 9

🧮 Case Study:

Profile: “Upgrader Couple”

Age: 32 (both)
Citizenship: Singaporeans
Combined monthly income: $12,000
CPF OA savings: $120,000 combined
Cash savings: $80,000
No outstanding loans

Step 1: Can we afford a private property in Singapore?

2-bedroom condo
Price: $1.5 million (pretty typical entry-level in many OCR areas today)

Step 2: Upfront Costs Breakdown

1. Downpayment (25%)

5% cash: $75,000
20% CPF/cash: $300,000
Total: $375,000

Already a problem:

CPF ($120k) + Cash ($80k) = $200k
Shortfall: $175,000

Can I afford a private property in Singapore? Unfortunately, no. Dont even meet the downpayment.

Step 3: Additional Costs

Buyer’s Stamp Duty (BSD)

Approx: ~$44,600

Legal + misc fees

~$3,000

Total extra costs:

~$47,600

Makes the shortfall even worse.

Step 4: Loan Assessment (TDSR)

Governed by Monetary Authority of Singapore rules:

Max TDSR = 55% of income
Income: $12,000 → Max debt = $6,600/month

Estimated loan:

Loan amount: $1.125M (75%)
Interest: 4% ( High test interest for buffer )
Tenure: 30 years

Monthly mortgage: ~$5,370

Step 5: The Hidden Reality Check

Monthly cash flow:

Mortgage: $5,370
Maintenance fees: $300–$400
Property tax: ~$200/month equivalent

Total housing cost: ~$5,900/month

That’s ~49% of their income.

Step 6: Stress Test (Very Important)

What if:

Interest rises to 5% → mortgage ≈ $6,000+
One partner loses income?

👉 They could easily exceed safe limits.

Adjusted Scenario (More Realistic)

Let’s say they instead buy:

Option B: $1.1M condo

Downpayment: $275k
Loan: ~$825k
Monthly mortgage: ~$3,950

👉 Much more manageable:

Total monthly cost: ~$4,400
~37% of income → healthier range

Key Takeaways for Your Readers

1. Passing TDSR ≠ Affordability

Just because the bank approves you doesn’t mean it’s comfortable.

2. Downpayment Is the Biggest Barrier

Most buyers fail before the loan stage.

3. Cash Flow > Net Worth

Being “asset rich” but cash poor is risky.

4. Always Stress Test

Use higher interest rates and single-income scenarios.

5. Sweet Spot Rule (Simple Heuristic)

Keep housing costs ≤ 30–40% of income