Wednesday, April 11, 2007

What HDB flat can I afford? v1

I'm going to assume for this post that I'm buying a HDB flat - I'll cover the rationale for renting and my aversion to buying condo at this point in a separate post.

I'm considering one of two options:

a) Putting in for one of the Bi-Monthly Sale of 4-room & Bigger Flats in my area. Of course this would mean I've to get married pretty much within the next 3 months...

b) Putting in for one of the Build To Order flats in Punggol... which means I'd have to prepare to move in in about 4 years..

(See, that's one reason to rent rather than buy - pure flexibility!)

of course, there's always
c) Wait ...

which could also arise from
d) Apply but get unlucky at ballot.

Anyway, before that.
What can I afford? I must admit I have little idea about this, but there's this HDB MoneySense Guide which helps a bit. I'm gonna open a Google Spreadsheet and try to follow this.

A few information blocks along the way:

The first thing I should find out - am I eligible for a HDB loan at concessionary interest rate? This HDB article covers it. And, yes I am!
Generally, this means that I get an interest rate of 2.6% on my loan - presumably better than bank loans but I have no idea. Got to keep my eyes peeled for promotions as I walk around.

Then if I take a loan at 90% of the flat value, I can estimate my instalment payments here.

Keying it into the spreadsheet, I find:

a) For a flat worth $250k, I end up paying about $1020 in instalment payments, of which $120 must come from my cash. Not too bad!

b) For a flat worth $350k, I end up paying $1400 in instalment payments, of which $400 must come from cash - much tougher...

I've published the mug-ugly version 1 of the spreadsheet here.
Still need to
1) Figure out how HDB calculates the monthly payment based on
a) Loan amount
b) Per annum interest
c) Years to repay
So if you know this, let me know, okay?

2) Figure out the renovation loan interest rate and work out how renovation impacts the sheet

3) Add in calculations to reflect property tax, fire insurance, mortgage insurance, conservancy charges, maintenance costs, as the MoneySense guide advises.

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