New Launch vs Resale Mortgage FAQs: Homejourney Guide
Mortgage for New Launch vs Resale Property: Frequently Asked Questions covers key differences in financing options like BUC loans for new launches and completed property loans for resales, helping Singapore buyers make informed decisions.
At Homejourney, we prioritize your safety and trust by verifying rates from DBS, OCBC, UOB, HSBC, and more. This cluster article supports our pillar guide on New Launch vs Resale Property Mortgages: Homejourney Guide ">New Launch vs Resale Property Mortgages, offering tactical advice on new launch mortgage and resale property loan choices.[1][5]
Key Differences in Mortgage Types
New launch properties use BUC loans (Bank Loan for Under Construction properties) with progressive payment mortgages, where you pay in stages tied to construction milestones. This spreads cash flow over 3-4 years, easing upfront costs.[1][4][5]
Resale properties require completed property loans, with full disbursement upon purchase for immediate occupancy. No progressive payments mean higher initial outlay but quicker move-in.[1][4]
Both fall under MAS regulations like TDSR (Total Debt Servicing Ratio at 55%) and MSR (Mortgage Servicing Ratio at 30% for HDB). Bank loans for new launches often have slightly higher rates due to construction risk, but check Homejourney's bank rates page for real-time comparisons.[5]
Progressive Payment Mortgage Explained
A progressive payment mortgage for new launches follows a schedule: 5-10% on booking, more at construction starts, and balance at TOP (Temporary Occupation Permit). This uses CPF Ordinary Account savings gradually, ideal for first-time buyers building balances.[1][4]
Example: For a S$1.5M unit at The Sen (new launch in District 15), initial 5% is S$75,000, paid via cash/CPF. Full mortgage kicks in at TOP, around 2029.[4]
Resale skips this; a S$1.2M Punggol resale EC demands 25% downpayment upfront (S$300,000), with loan for the rest immediately.[2]
Interest Rates and Bank Options
New launch mortgage rates track 3M/6M SORA plus 0.5-1.0% margin from banks like DBS (currently ~3.8% effective) or OCBC. Resale rates are similar but may lock faster.[5]
SORA (Singapore Overnight Rate Average) is the benchmark since 2024, replacing fixed deposits for transparency. Rates fluctuate; younger buyers benefit from new launch timing as CPF grows.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA has stabilized post-2025 peaks, favoring fixed-rate packages for resales. Compare DBS vs UOB on Homejourney bank-rates – apply via Singpass for instant eligibility checks.[5]
Loan-to-Value (LTV) Limits
Both types cap at 75% LTV for first property (90% for HDB upgraders). New launches avoid COV (Cash Over Valuation) as sale price = valuation; resales risk 5-10% top-up.[4]
Actionable step: Use Homejourney's calculator at bank-rates#calculator to test scenarios. Input income S$8,000/month, see ~S$1.4M borrowing power under TDSR.[5]
Pros, Cons, and Decision Framework
- New Launch Pros: Staged payments preserve liquidity; defect warranty 12-24 months; higher tenant appeal post-TOP.[1][4]
- New Launch Cons: 3-4 year wait; construction delays (e.g., 2025 launches pushed to 2028); full payments converge at TOP.[3][6]
- Resale Pros: Immediate possession; negotiable prices (5-8% discounts common); observe facilities/management.[1][4]
- Resale Cons: Potential defects/renovation (budget S$50-100K); COV risk; older lease (e.g., 89 years left).[2]
Framework: If moving in <6 months, choose resale. If flexible timeline and value newness, go new launch. Factor stamp duties: ABSD 17% for second property affects both.[1]
Insider tip: For Punggol resales, check MRT proximity (e.g., Canberra MRT Exit A, 5-min walk) via Homejourney property search. New launches like Sengkang projects shine for family layouts.[2]
Practical Steps to Secure Your Loan
- Verify eligibility on Homejourney calculator using Singpass/MyInfo.
- Compare rates: DBS 2.5% fixed 2Y, OCBC SORA+0.6%, UOB Lock-in 3Y.
- Submit multi-bank application via Homejourney – one form, offers from 10+ banks.
- For new launch, time BUC loan at 20% construction stage when rates dip.
- Post-purchase, explore Aircon Services ">aircon services for move-in readiness.
Disclaimer: Rates as of Feb 2026; consult Homejourney mortgage brokers for personalized advice. Not financial advice; based on MAS/HDB guidelines.[5]
Frequently Asked Questions
1. Can I use the same bank loan for new launch and resale?
Yes, banks like HSBC offer both BUC and completed property loans. New launches use progressive schedules; resales full payout. Check Homejourney for side-by-side.[5]
2. Which has lower monthly payments initially?
New launches via progressive payments – e.g., S$1,000-2,000/month early vs resale's full S$4,000+ immediately. Payments spike at TOP.[1][4]
3. Are rates higher for BUC loans?
Slightly (0.1-0.3% more) due to risk, but negotiable. Track SORA on Homejourney; refinance post-TOP if rates fall.[5]
4. CPF usage same for both?
Yes, OA for downpayment/interest, up to Acc CPF limits. New launches allow gradual grants like CPF Housing Grant.[1]
5. Refinancing easier for which?
Resales anytime post-purchase; new launches post-TOP. Use Homejourney for seamless multi-bank refinancing.[5]
Ready to compare? Visit Homejourney bank-rates for safe, verified mortgage options. Link back to our pillar: New Launch vs Resale Property Mortgages: Homejourney Guide ">New Launch vs Resale Mortgages Guide.
