New Launch vs Resale Mortgages: Which Financing Path Suits You?
The mortgage you choose depends entirely on your property type—and the financing structure for new launches differs fundamentally from resale properties. New launches typically use progressive payment mortgages, where you pay in stages as construction progresses. Resale properties require immediate full mortgage responsibility at completion. Understanding these differences is critical because they directly affect your cash flow, CPF usage, and long-term affordability.
This guide breaks down how each mortgage type works, which is right for your situation, and how to apply confidently via Homejourney—Singapore's trusted platform for transparent mortgage comparison and multi-bank applications.
How New Launch Mortgages Work: Progressive Payment Advantage
New launch properties use a progressive payment scheme (PPS), meaning you don't pay the full purchase price upfront.[1] Instead, payments are staggered across the construction period—typically spanning 3-4 years. This structure fundamentally changes how you manage your finances.
Here's how the payment timeline typically works:
- Initial Payment (5-10%): Due upon signing the Option to Purchase (OTP)
- Construction Payments (40-60%): Paid in tranches as construction milestones are reached
- Final Payment (25-35%): Due at Temporary Occupation Permit (TOP) or completion
The mortgage itself is drawn down in stages, aligned with these construction payments. This means your monthly mortgage repayments start lower and increase gradually as the developer requests larger payments.[1] For buyers with stable income but limited liquid savings, this staged approach makes the overall journey more manageable.
CPF Advantage: Because payments are staggered over years, your CPF balance continues accumulating throughout the construction period. You can use this accumulated CPF to cover later construction payments, reducing the cash you need to provide out-of-pocket.[1] This is a significant advantage for younger buyers with good income but smaller CPF balances today.
How Resale Mortgages Work: Immediate Full Responsibility
Resale properties require a different approach. You must be ready to pay your full downpayment immediately upon completion—there's no staggered timeline.[1] Your mortgage is drawn down in full at completion, and your monthly repayments begin immediately at the full amount.
This creates a critical cash flow difference: while a new launch might require $50,000 in year one, a resale requires your entire downpayment (often $150,000-$300,000+) upfront. Some buyers find resale "cheaper" on paper but harder to execute immediately, while a more expensive new launch feels manageable in the early years due to staged payments.[1]
Valuation Clarity: With resale properties, there's a risk of Cash Over Valuation (COV)—where the property's market price exceeds the bank's valuation, requiring you to top up the difference in cash. With new launches, the sale price IS the valuation, eliminating this uncertainty.[3]
Comparing Mortgage Costs: New Launch vs Resale
New launch properties typically command a premium over comparable resale options nearby.[1] This premium reflects what new launches offer: brand-new condition, modern layouts, contemporary facilities, and developer-backed defect coverage. However, the question isn't whether the premium exists—it's whether it's justified for your circumstances.
Consider these cost factors:
- New Launch: Higher purchase price, but lower renovation costs (often included), staged mortgage payments, no COV risk
- Resale: Lower purchase price, but potential renovation costs ($30,000-$100,000+), immediate full mortgage, possible COV
The interest rate you receive depends on your bank and profile, not the property type. Both new launch and resale mortgages are offered by all major Singapore banks—DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others.[1] Comparing rates across banks is essential, as differences of 0.2-0.5% can save you tens of thousands over the loan tenure.
Use Homejourney's bank rates comparison to see current rates from all major lenders side-by-side. You can also calculate your mortgage eligibility instantly with our built-in calculator to understand your borrowing power before you apply.
Eligibility & Approval: What Banks Assess
Banks evaluate new launch and resale mortgages using the same core criteria, but with slightly different emphasis:
Total Debt Servicing Ratio (TDSR): Your total monthly debt (mortgage + car loans + credit cards) cannot exceed 55% of your gross monthly income. This applies equally to new launches and resale.[1]
Loan-to-Value (LTV): Banks typically lend up to 75-80% of the property value. With new launches, the valuation is fixed (the purchase price). With resale, the valuation is assessed by the bank, which can create surprises.
Income Stability: For new launches, banks assess whether your income will remain stable throughout the construction period (3-4 years). For resale, the assessment window is shorter but more immediate.
CPF Balance: For new launches, banks consider your projected CPF balance at TOP (when you'll need it most). For resale, your current CPF balance matters more since you need it immediately.
First-time buyers often worry about approval odds. The reality: approval rates for both new launch and resale mortgages are high for buyers with stable income and reasonable debt levels. What matters is presenting your strongest profile to banks.
Defects, Warranties & Risk: New Launch Safety Net
New launch properties come with a developer warranty period (typically 5 years for structural defects, 1 year for non-structural).[3] This means the developer is responsible for fixing defects that appear during this period at no cost to you. This is a genuine safety advantage.
Resale properties are sold "as-is" under caveat emptor (buyer beware).[1] Defects discovered after purchase are your responsibility. While you can conduct a pre-purchase inspection, hidden issues can still emerge. The solution is thorough inspection, careful documentation, and realistic budgeting for potential repairs.
From a mortgage perspective, this doesn't change your loan terms, but it affects your total cost of ownership. Budget conservatively for resale properties.
How to Apply for Your Mortgage via Homejourney
Homejourney simplifies mortgage applications by eliminating the need to visit multiple banks. Here's how to apply:
Step 1: Calculate Your Eligibility
Visit Homejourney's bank rates page and use our mortgage eligibility calculator. You'll need:
- Your monthly gross income
- Current outstanding debts (car loans, credit cards, personal loans)
- CPF balance (OA + SA)
- Estimated property price
The calculator instantly shows your borrowing power and estimated monthly repayment across different loan tenures. This gives you a realistic budget before you start house hunting.
Step 2: Compare Bank Rates
Homejourney displays current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and other major banks. Rates update regularly, so you see the latest offerings. Compare not just interest rates, but also:
- Processing fees (typically 0.2-0.5% of loan amount)
- Valuation fees (usually $300-$500)
- Lock-in periods and early redemption penalties
- Cashback or promotional offers
Step 3: Apply via Singpass (One-Click Auto-Fill)
This is where Homejourney saves you hours. Instead of visiting each bank with documents, you submit one application through Homejourney using Singpass. Your income, employment, and CPF data auto-fill instantly from government records. No need to manually enter information or gather payslips—it's all verified automatically.
One application sends your details to all selected banks simultaneously. You choose which banks to apply to (or let us recommend based on your profile).
Step 4: Receive & Compare Offers
Banks respond within 3-5 business days with pre-approval letters and formal offers. Homejourney displays all offers side-by-side so you can compare:
- Interest rates (fixed vs floating)
- Loan amount approved
- Tenure options
- Monthly repayment amounts
- Total interest payable
You can also track your application status in real-time through the Homejourney dashboard.
Step 5: Connect with Homejourney Mortgage Brokers
If you have questions about which offer is best for your situation, or need help negotiating with banks, Homejourney's mortgage brokers are available. They provide personalized guidance at no additional cost—they're included as part of our commitment to making home loans transparent and accessible.
New Launch vs Resale: Which Mortgage Path Is Right for You?
Choose a New Launch mortgage if:
- You're not in a rush and can wait 3-4 years for completion
- You prefer staged payments to manage cash flow
- You want modern layouts, latest facilities, and brand-new condition
- You value the developer warranty and defect protection
- You have good income but smaller CPF balance today (staged payments let CPF accumulate)
- You want to avoid valuation surprises (sale price = valuation)
Choose a Resale mortgage if:
- You need a home soon and want to move in within months
- You can handle full mortgage payments immediately
- You prefer seeing the actual property before buying (not just a showflat concept)
- You want more negotiation flexibility on price
- You value larger unit sizes (older resale condos often offer more space)
- You have the cash reserves for immediate downpayment and potential renovation
The honest answer: there's no universally "better" choice. It depends entirely on your circumstances, timeline, and what you truly value in a home.[1]
Why Apply via Homejourney?
Homejourney is built on three core commitments: safety, trust, and transparency. Here's why buyers choose us for mortgage applications:
- Multi-Bank Comparison: Skip the hassle of visiting banks one by one. Submit one application, receive offers from all major banks
- Singpass Integration: Auto-fill your application in seconds. Your income and CPF data are verified instantly—no paperwork delays
- Real Rates, Real Offers: We display actual rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and more. No hidden fees or surprises
- Transparent Guidance: Our mortgage brokers explain every offer clearly. We help you understand what you're getting, not push you toward the highest commission
- Safety First: Your personal data is protected with bank-level security. We never sell your information or spam you with follow-ups
- Real-Time Tracking: Monitor your application status and receive offers directly through the platform
For new launch mortgages specifically, Homejourney helps you understand the construction payment timeline and ensures your mortgage is structured to match the developer's payment schedule. For resale mortgages, we help you navigate valuation risks and find the best rate for your situation.
Frequently Asked Questions
Can I apply for both new launch and resale mortgages via Homejourney?
Yes. The application process is identical—you submit one application through Homejourney, and banks assess you for both property types. Your eligibility and rates depend on your profile, not the property type. This is useful if you're still deciding between options.
What if my new launch doesn't have a fixed TOP date yet?
Banks can still approve your mortgage based on an estimated TOP date (usually developer guidance). Your actual mortgage drawdown is scheduled for the actual TOP. If TOP is delayed, the bank typically extends your approval period. Homejourney helps clarify this with the bank when you apply.
Do I need to pay the downpayment before applying for a mortgage?
No. You apply for the mortgage first, get pre-approval, then proceed with the property purchase. The downpayment is typically due at different points depending on property type (new launch: upon OTP signing; resale: upon completion). Your mortgage is drawn down to cover the remaining amount.
