Construction Loan Progressive Payment Explained: Bank Rate Comparison Guide | Homejourney
Construction loans for properties under construction (BUC) in Singapore use a progressive payment scheme where banks disburse funds in stages matching construction milestones, typically 5-10% per phase, with buyers paying interest-only initially.[1][7]
Homejourney simplifies this with real-time bank rate comparisons from DBS, OCBC, UOB, and more at https://www.homejourney.sg/bank-rates, ensuring transparent, verified financing options for user safety and trust.[1]
What is Construction Loan Progressive Payment?
The progressive payment scheme for construction loan Singapore ties payments to building stages like foundation (10%), framework (10-15%), and TOP (25%), spreading costs over 2-4 years.[1][3]
Buyers make a 5-25% downpayment upfront (5% cash minimum), then banks fund subsequent stages via BUC property loan, often with interest-only periods until TOP.[1][4]
This protects buyers by linking developer payments to verified progress, per Housing Developers Rules, while easing cash flow—no full principal until possession.[2][4]
Standard Progressive Payment Schedule in Singapore
Typical schedule for new launch condos:
- OTP/Downpayment: 5-25% (5% cash + CPF/cash)
- Foundation (6-9 months): 10% (cash/CPF + loan)
- Framework (1 year): 10-15% loan
- Partition Walls: 5-10% loan
- Roofing/Flooring: 5-10% loan
- TOP (2-3 years): 25% loan, keys handed
- CSC/Legal Completion (12 months post-TOP): 15% loan
[1][3][4] Use Homejourney's tools at https://www.homejourney.sg/bank-rates#calculator to model your schedule.
How Construction Loans Work with Progressive Payments
Banks like DBS approve new launch financing pre-OTP, issuing offer letters for CPF use. Disbursements start post-downpayment, interest-only (~3-4% p.a. on drawn amount) until TOP.[1][7]
Post-TOP, full monthly repayments begin on total loan (up to 75-90% LTV per TDSR/MAS rules). Example: S$1.5M condo, 75% loan = S$1.125M; pay interest on S$200K at foundation, scaling up.[1][4]
Insider tip: Secure loan early—delays risk OTP expiry. Homejourney's Singpass integration auto-fills applications for faster approvals across banks.[1]
Current Bank Rates for Construction Loans (2026)
Rates tied to 3M SORA (~2.8-3.2% as of Feb 2026) + spread (0.5-1.5%). Homejourney tracks live rates—compare instantly at https://www.homejourney.sg/bank-rates.[7]
The chart below shows recent interest rate trends in Singapore:
SORA stable post-2025 hikes; effective rates 3.3-4.7%.[1]
Bank Rate Comparison Table
| Bank | SORA Loan (Effective Rate) | Fixed Rate Option | Interest-Only Period | Best For |
|---|---|---|---|---|
| DBS | 3M SORA + 0.7% (3.5%)[7] | 3.8% (2-yr lock-in) | Until TOP | First-time buyers |
| OCBC | 3M SORA + 0.6% (3.4%) | 3.7% (3-yr) | Until TOP | Investors |
| UOB | 3M SORA + 0.65% (3.45%) | 3.75% (2-yr) | Until Framework | Refinancers |
| HSBC | 3M SORA + 0.8% (3.6%) | 3.9% (1-yr) | Until TOP | Expats |
| Standard Chartered | 3M SORA + 0.75% (3.55%) | 3.85% (2-yr) | Until TOP | High-net-worth |
| Maybank/CIMB/etc. | 3M SORA + 0.9-1.2% (3.7-4.4%) | 4.0%+ (varies) | Until TOP | Competitive shopping |
Rates as of Feb 2026; verify on Homejourney for updates. DBS/OCBC lead for lowest spreads.[7]
Pros, Cons, and Actionable Tips
Pros: Cash flow ease, developer accountability, potential appreciation (e.g., 10-20% pre-TOP).[1][4]
Cons: Interest accrues early, delay risks, penalties for late payments (1-8% p.a.).[4]
- Compare rates on Homejourney—submit one app via Singpass for multi-bank offers.
- Calculate payments: Use mortgage calculator for your scenario.
- Time TOP alignment with life events (e.g., HDB resale).
- Monitor SORA via Homejourney; refi if rates drop.
- Consult Homejourney brokers for personalized advice—free, no-obligation.
Disclaimer: Rates fluctuate; not financial advice. Seek professional guidance.[1]
How to Apply via Homejourney
1. Visit https://www.homejourney.sg/bank-rates.
2. Use calculator for eligibility.
3. Apply with Singpass—get offers from DBS, OCBC, UOB+ simultaneously.
4. Track progressive disbursements securely.
Link to pillar: For full new launch financing, see Construction Loan Progressive Payment Explained: Singapore Guide | Homejourney . Related: Boost approval odds Construction Loan Progressive Payment Explained: Boost Approval Odds | Homejourn... .
FAQ: Construction Loan Progressive Payment
What is the typical downpayment for BUC properties?
25%, with 5% cash minimum; rest CPF/cash. Banks fund the balance progressively.[4]
Can I use CPF for progressive payments?
Yes, from Ordinary/Enhanced CPF Housing Accounts after loan approval.[1]
When do full repayments start?
Post-TOP, on full disbursed loan amount.[1][7]
How to compare bank rates safely?
Use Homejourney's verified comparator at https://www.homejourney.sg/bank-rates—real-time, transparent.
Is there a progressive payment calculator?
Yes, try Homejourney's at https://www.homejourney.sg/bank-rates#calculator.[2]
Ready for safe, trusted financing? Compare rates and apply now on Homejourney—prioritizing your security. Explore properties at https://www.homejourney.sg/search.
