Construction Loan Progressive Payment Explained: Benefits of Applying via Homejourney

A construction loan progressive payment in Singapore is a financing structure for buildings under construction (BUC) properties where banks disburse loan funds to developers in stages matching construction milestones, allowing buyers to spread payments over time rather than upfront.[1][3]

Applying via Homejourney simplifies this process with multi-bank applications, Singpass integration, and real-time rate comparisons from DBS, OCBC, UOB, and more, prioritizing your safety and trust in a transparent platform.Construction Loan Progressive Payment Explained: Homejourney Guide

What is a Construction Loan Progressive Payment Scheme?

The progressive payment scheme aligns your payments with physical construction progress on new launch condos, executive condominiums (ECs), or BUC properties. Buyers pay 5-25% of the purchase price at key stages like foundation completion, reinforced concrete framework, and Temporary Occupation Permit (TOP).[1][2]

For construction loan Singapore buyers, banks like DBS or UOB release loan portions only after these milestones, verified by architects or engineers. This protects you from overpaying if delays occur, as payments adjust accordingly.[1][3]

Initial stages require cash or CPF (e.g., 5% booking fee, 15% downpayment), then loans kick in. Monthly installments start only after the first bank disbursement, based on your loan-to-value (LTV) ratio—e.g., 75% LTV means repayments begin at foundation stage.[1]

Standard Progressive Payment Schedule for New Launches

Here's a typical breakdown for a $1.5 million condo unit under the normal progressive payment scheme:[1][2]

Booking Fee: 5% ($75,000) – Cash, within days of option exercise.
Downpayment: 15% ($225,000) – Cash/CPF, within 8 weeks of option.
Foundation: 10% ($150,000; 5% cash/CPF + 5% loan).
Reinforced Concrete Framework: 10% ($150,000) – Loan.
Partition Walls/Bricks: 5% ($75,000) – Loan.
Roofing/Ceiling: 5% ($75,000) – Loan.
Windows/Plumbing/Electrical: 5% ($75,000) – Loan.
Carpark/Drains: 5% ($75,000) – Loan.
TOP: 25% ($375,000) – Loan/CPF.
Legal Completion/CSC: Remaining balance (e.g., 5-15%) – Loan/CPF.

Payments must be made within 14 days of developer notice, or fees apply. For late buyers (e.g., post-launch), multiple stages may be called at once.[1]

How Construction Loans Work with Progressive Payments

Banks approve BUC property loans or new launch financing based on your income, age, and Total Debt Servicing Ratio (TDSR ≤55%). LTV limits: 75% for first-timers, 45% for subsequent buyers (as of 2025 MAS rules).[3]

Once approved, disbursements follow the developer payment schedule. Interest is interest-only until TOP, then principal + interest begins. Use Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator to check your borrowing power instantly.

The chart below shows recent interest rate trends in Singapore:

As seen in the chart, 3M SORA rates hover around 3.0-3.5% in late 2025, influencing your effective loan rate (typically SORA + 0.5-1.5% margin).[3]

Step-by-Step Guide to Applying for Progressive Payment Loans

Follow these actionable steps for smooth construction loan Singapore approval:

Calculate Eligibility: Use Homejourney's tool to assess affordability based on income and CPF.
Gather Documents: NRIC, income slips (last 3 months), CPF statements, tax assessments. Singpass auto-fills via Homejourney.
Compare Rates: View DBS (SORA+0.7%), OCBC, UOB, HSBC, Standard Chartered on https://www.homejourney.sg/bank-rates.
Submit Multi-Bank Application: One form sends to 10+ banks (CIMB, RHB, Maybank included) – skip branch visits.
Track Progress: Monitor status and offers in-app; select best via side-by-side comparison.
Sign Offer: Accept within 21 days; bank disburses at milestones.

Pro Tip: Apply early post-option exercise – processing takes 7-21 days. Avoid pitfalls like incomplete docs delaying disbursements.[3]

Key Benefits of Progressive Payments and Homejourney

Cash Flow Relief: Spread payments over 2-4 years, with low initial installments.[1][5]

Lower early repayments preserve liquidity for investments.
Delays don't accelerate payments – buyer protection.

Homejourney Advantages:

Multi-Bank Efficiency: One application to DBS, OCBC, UOB, HSBC, etc. – receive multiple offers fast.
Singpass Speed: Auto-fill income/CPF data for quicker approvals.
Transparency: Real-time SORA tracking and rate comparisons build trust.
Safety First: Verified partners, secure platform – no hidden fees.

For example, on a $1.8M EC at Simei (near MRT), Homejourney users saved 0.2% on rates vs. solo applications, per platform data.Construction Loan Progressive Payment Explained: Bank Rate Comparison Guide | Ho...

Documentation Checklist and Pro Tips

Required Docs:

Proof of income (payslips, IR8A).
CPF statements (last 12 months) from CPF portal.
S&P Agreement copy from developer.
Option to Purchase.

Insider Tips: Time applications post-S&P signing. Boost odds with 20%+ downpayment. For HDB upgraders, check ABSD implications via URA.Construction Loan Progressive Payment Explained: Boost Approval Odds | Homejourn...

Disclaimer: This is general guidance; consult professionals for personalized advice. Rates subject to change (current as of Dec 2025).

FAQ: Construction Loan Progressive Payments

What if construction delays?
Payments pause until milestones are certified – no extra cost to you.[1]

When do installments start?
After first loan disbursement (e.g., foundation for 75% LTV).[1][3]

Can I use CPF for all stages?
Yes post-downpayment, up to Available Balance limits.[2]

Is Homejourney free?
Yes – no fees for comparisons or applications; we earn from partners transparently.

How to find BUC projects?
Search verified listings at https://www.homejourney.sg/search.Projects

Ready to secure your construction loan progressive payment? Start with Homejourney's safe, trusted platform at https://www.homejourney.sg/bank-rates. For full details, see our pillar guide: Construction Loan Progressive Payment Explained: Homejourney Guide.Construction Loan Progressive Payment Explained: Homejourney Guide