Are You Financially Ready to Upgrade from HDB to Condo in 2025?

We help you assess your budget, loan eligibility, and timing if you're planning to upgrade this year.

lakeside6

Jul 3, 2025 - 10:31

Are You Financially Ready to Upgrade from HDB to Condo in 2025?

Upgrading from an HDB flat to a private condominium is a major milestone for many Singaporean homeowners. Its often seen as a sign of financial progress, lifestyle improvement, or long-term investment planning. But behind the aspiration lies a key question:
Are you truly financially ready to make that move in 2025?

With rising property prices, tightening loan limits, and new cooling measures, it's more important than ever to approach this decision with clarity and caution. Heres a guide to help you assess whether upgrading makes financial sense for you this year.

1. Understand the Full Cost of Upgrading

The purchase price of the condo is just the beginning. Youll need to account for:

Downpayment: 25% of the purchase price (at least 5% in cash)
Stamp duties: Buyers Stamp Duty (BSD) applies to all purchases; Additional Buyers Stamp Duty (ABSD) may apply if your HDB isnt sold before buying
Legal and agent fees: Typically between $3,000 and $5,000
Renovation and furnishing: Especially if youre buying a bare unit
Monthly costs: Higher mortgage, maintenance fees ($250$500/month), property tax

Also factor in bridging loans or temporary cash outlays if youre buying before selling your existing HDB flat.

2. Can You Afford the Monthly Commitments Comfortably?

Take a hard look at your income, liabilities, and lifestyle. Condo owners face:

Higher mortgage repayments due to bigger loan amounts
MCST fees that replace HDB service & conservancy charges
Higher property taxes, especially for investment-grade properties
Ongoing costs like insurance and repairs

Use the Total Debt Servicing Ratio (TDSR) guidelineyour total monthly debt repayments (including the new mortgage) must not exceed 55% of your gross monthly income. Even if you qualify on paper, ask yourself: Would I still be financially comfortable if interest rates rise or my income drops?

3. Is Your Existing HDB Worth Enough to Make the Jump?

Your upgrading plan often depends on how much you can sell your HDB flat for. Check:

Current market value of comparable units in your area
Remaining lease (flats with less than 6070 years may fetch lower prices)
Demand for your flat type (e.g., 5-room flats in mature estates may sell faster)

If your sale proceeds can fully fund the condo downpayment and offset part of the loan, the financial risk is lower. If not, youll need significant cash or CPF savings to cover the gap.

4. Have You Planned for CPF Usage and Retirement?

Upgrading should not compromise your future retirement plans. Remember:

Using CPF for property reduces your accrued interest, which must be refunded upon resale
If too much CPF is tied up in your condo, you may have less for retirement
Condos dont qualify for schemes like the Silver Housing Bonus or Lease Buyback

Make sure you maintain adequate CPF Ordinary Account and Special Account balances, especially if youre over 40 and planning for long-term security.

5. Do You Have Emergency Savings After the Move?

After paying for the condo and associated costs, will you still have a six-month emergency buffer? Many buyers underestimate post-upgrade costslike unexpected repairs, job instability, or medical bills.

Never put yourself in a position where a lifestyle upgrade creates financial strain.

Conclusion: Its More Than Just AffordabilityIts Financial Readiness

The desire to upgrade from HDB to condo is understandablebetter amenities, privacy, and long-term capital appreciation. But in 2025, with higher borrowing costs and tighter affordability, its not just about whether you can afford itits about whether youre financially ready for it.

If youve done the math, considered the risks, and have buffers in place, upgrading can be a wise step forward. If not, it may be worth waiting, saving more, or considering executive condos as a midway point.