$800k HDB apartment for 8k monthly income?

I attended a gathering with some of my friends last week. It has been some time since we last met and updated ourselves with the happenings in our lives and other mutual friends. I was utterly surprised to find out that one of my friends who was getting married very soon bought a resale HDB flat for $800k+.

I had to be conscious enough to make sure that my jaw didn’t drop to the floor. So was the same initial reaction of the person who told me this piece of news.

I must comment that the flat is conveniently located just a stone’s throw away from the MRT, and is also nearby his soon-to-be parents-in-law’s original attap house (landed property). I am hoping it is at least a 5-room flat as I forgot to ask.

attap house.jpg

Worth at least 2 million hor…

Let us assume that this couple’s combined monthly income is about $8000 per month. This figure is judging on my take from both of their career paths, and I am not trying to be conservative here. Taking into consideration CPF contributions, the following figures will be their individual contributions for each CPF account:

Employee’s Contribution $1,600
Employer’s Contribution $1,360
Ordinary Account $1,840.26
Medisave Account $639.94
Special Account $479.8

And for a $800k HDB flat with a down payment of 10%, assuming that they are taking a HDB loan of $720k with an interest rate of 2.6% for 25 years, their monthly installments will be a magical number of $3,266. This means that they have to fork out an additional $1,425.74 which is almost 22.3% of their take home pay.

I am guessing that the down payment of $80k should not be a problem if they have enough funds in their OA accounts, which they should since both of them have been working for some time.

No wait… How did they even get a loan of $720k? According to HDB’s calculator, the max loan eligible for $8000 income is only $529,000 at a monthly installment of $2,400.

Now, I don’t know if this couple received any financial assistance with the rest of their loan of their new HDB flat from his parents or his parents-in-law, should the above figures be true. But from the odds of it, I honestly think that they strike Toto or 4D (won the lottery) big time and huat gao gao. No other explanation already. Or perhaps someone here can enlighten me.

Okay. Jokes aside, I wish them a blissful marriage. They are very nice people and I hope that they 早生贵子 (have children soon).

Thanks for reading!

Miss Niao xoxo


Author: Miss Niao

Hello! I blog about financial matters and things that average people can do to have a better retirement. I want to inspire people to take control of their money and have a better understanding about it. If you are interested to know more, follow me @ missniao.wordpress.com! :)

10 thoughts on “$800k HDB apartment for 8k monthly income?”

  1. if they take bank loan, 35 years, 10% downpayment, 2% interest for FD-pegged rates, repayment of $2,386, just scrapped through 30% of gross income. but they will also have to pay stamp duties, legal fees, gst, etc and no grants if combined income is more than 8.5k.

    Liked by 1 person

  2. Hi missniao,

    Some minor mistakes in computing their CPF contribution. I am guessing you entered $8k into the CPF calculator to get the above figure. However, there is a $6k cap (hence, 20% of $6k = $1,200) for an individual CPF contribution. Since their combined income is $8k, I dun think the cap will be applicable (A better estimate would be based on $4k and then multiply everything by 2).

    I agree with you, it is indeed jaw dropping! I wouldn’t be surprised if their parents helped them out with the finances 🙂


  3. A S$800k apartment on a S$8,000 combined monthly income is a stretch on the couple’s finances. Especially when they haven’t been working long enough to accumulate significant cash savings to act as a buffer. Then again, it is possible for their salary incomes to rise over time, which can help to address this problem!


  4. $800k is really a lot of money. With so much money tied up in that apartment, and the continuous cash outflow to service the mortgage, how much is there left for other forms of investment?


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