How to save for your first home (and use housing grants)

You’ve found the dream flat — now comes the part that makes or breaks it: the downpayment and other upfront payments. But don't worry, it's not as scary as it sounds. The HDB Flat Eligibility (HFE) Letter will provide you a comprehensive understanding of your housing and financing options, including how much housing grants and housing loans you are eligible for. We also break it down here:

Step 1: Use CPF housing grants to reduce what you need to save

Housing grants are given to eligible buyers to make housing more affordable. The best part? They’re credited into your CPF OA so you can use them for your downpayment or to offset your home loan.

Main types of grants (as of 2025):

Pro tip: You can combine grants when buying a resale flat. For example, a couple buying a resale flat near their parents may qualify for the CPF Housing Grant + EHG + PHG — that’s potentially up to $230,000 in total grants.

How to apply:

• For BTO and resale flats, you can apply for the housing grants during your flat application.

Step 2: Figure out how much you need for a down payment after factoring in eligible housing grants

It depends on your loan type:

Plus, if you're eligible for the Deferred Income Assessment (DIA), you’ll only need to pay 2.5% of your flat’s purchase price when signing the Agreement for Lease. You can pay the rest when you collect your keys.

Refer to HDB’s website for more detailed information on down payment.

Let’s say you’re buying a $400,000 resale flat with a bank loan:

• You’ll need $20,000 in cash
• Another $80,000 can come from CPF OA or cash

Step 3: Factor in other upfront costs

• Option fee — between $1 and $1,000
• Option Exercise Fee — should not exceed $5,000 when including the Option fee
• Stamp duty
• Legal fees

All these stack up, so it’s wise to plan early and track your savings.

Visit HDB’s Housing Budget Calculator to start planning!

Step 4: Save for your downpayment

1. Set a timeline: Don’t just say ‘We’ll save when we can’. That’s how months fly by with nothing to show for. Instead, set a clear target and timeline. Want to buy in 2 years? Divide your downpayment goal by 24 months.
2. Use a high-interest savings account: Your money should work for you while it sits. Instead of letting it laze around in a basic savings account, park it somewhere with decent returns. Compare various options offered by banks to see which works best for you.
3. Automate your savings: Once you’ve set a goal, treat it like a monthly bill to your future self. Set aside a fixed amount each month right after payday.