New Launch vs Resale Property Mortgages: Homejourney Guide
This definitive guide compares mortgages for new launch vs resale properties in Singapore, covering BUC loans, progressive payments, interest rates, and eligibility. Homejourney prioritizes your safety with verified data and tools to help you secure the best new launch mortgage or resale property loan confidently.
Whether you're a first-time buyer eyeing a new condo or upgrading via resale, understanding financing differences is crucial. With Total Debt Servicing Ratio (TDSR) at 55% and Mortgage Servicing Ratio (MSR) for HDB at 30%, choices impact your cash flow over years. Homejourney's bank rates page lets you compare DBS, OCBC, UOB, and more instantly.
Table of Contents
- Executive Summary
- Key Mortgage Differences: New Launch vs Resale
- Financing New Launch Properties
- Financing Resale Properties
- HDB Loans vs Bank Loans
- Eligibility and Calculations
- Interest Rates and SORA Trends
- Additional Costs and Fees
- Decision Framework: Which to Choose?
- Frequently Asked Questions
- Next Steps with Homejourney
Executive Summary
New launch properties use progressive payment mortgages tied to construction milestones, easing upfront cash flow but extending risk over 3-4 years. Resale properties require completed property loans with full payments soon after purchase, offering immediate occupancy but demanding ready funds.
Homejourney verifies all data for trust, helping over 10,000 users compare rates safely. Key takeaway: New launches suit patient buyers with stable income; resales fit those needing quick moves. Use our bank rates page for real-time quotes from DBS to Maybank.
Key Mortgage Differences: New Launch vs Resale
The core distinction lies in payment structure and risk timing. New launches spread payments progressively (10-25% at booking, more at construction stages), while resales demand 25% downpayment upfront and full loan disbursement at completion (3-6 months).
This table summarizes the differences for quick reference:
| Feature | New Launch (BUC Loan) | Resale (Completed Property Loan) |
|---|---|---|
| Payment Structure | Progressive (staged over 3-4 years) | Lump sum at completion (3-6 months) |
| Loan-to-Value (LTV) | Up to 75-80% on BUC value | Up to 75-80% of lower valuation/purchase price |
| Downpayment | 5-25% initially, balance staged | 25% upfront (cash + CPF) |
| Interest Start | Progressive from each payment | Full amount from disbursement |
| Occupancy | 3-4 years post-purchase | Immediate (8-12 weeks) |
Source: Adapted from developer practices and MAS guidelines. New launches reduce immediate burden but tie up CPF longer; resales allow quicker rental income to offset loans.[1][3]
Financing New Launch Properties
What is a BUC Loan?
BUC loan (Buyer’s Under Construction loan) finances new launch purchases before Temporary Occupation Permit (TOP). Banks lend against the Buyer’s Unit Contract (BUC) price, not market valuation yet. Typical progressive schedule: 10% booking, 10% agreement, 10% foundation, up to 25% at TOP.[3]
Example: For a $1.8M unit at The Sen (new launch 2025), pay $180K initially, then staged. Banks like DBS offer package rates from 3M SORA + 0.6% (around 3.2% in 2026). Homejourney's mortgage calculator simulates this instantly.
Progressive Payment Mortgages Explained
Interest accrues only on disbursed amounts, preserving cash flow. CPF Ordinary Account (OA) funds each stage, growing meanwhile. Insider tip: Younger buyers (under 35) benefit most as CPF builds during 3-year wait. Risks include developer delays (e.g., past GLS sites in OCR).[1][4]
Financing Resale Properties
Completed Property Loans
Resale uses completed property loans disbursed fully at key collection. LTV caps at 75% for first property, based on min(purchase price, valuation). Cash-over-valuation (COV) risk: If valued $1.5M on $1.7M buy, top up $200K cash.[3]
Real example: 4-room resale HDB at Punggol ($800K, valued $780K) requires $20K COV + 5% cash down ($39K). Banks like OCBC provide up to 80% LTV. Immediate move-in suits families; rent out within weeks for yield (e.g., 3.5% in mature estates).
Advantages for Investors
No construction wait means instant income. Negotiate 3-5% discounts on resales vs fixed new launch prices. Check en-bloc potential in older condos like those in RCR for upside.[3]
HDB Loans vs Bank Loans: New Launch vs Resale
HDB loans (2.6% fixed till 2026) available for both, but banks offer lower effective rates (SORA ~3%). HDB suits conservative buyers; banks for higher LTV/tenure.
| Aspect | HDB Loan | Bank Loan |
|---|---|---|
| Rate (2026) | 2.6% p.a. | 3M SORA + 0.5-0.8% (~3.1%) |
| LTV Max | 80-85% | 75% |
| New Launch Suitability | Progressive ok | Preferred for packages |
| Processing Fee | $2K max | 1-2% of loan |
HDB enforces MSR; banks TDSR. Switch via Homejourney's refinancing tools.
Eligibility and Calculations
TDSR and MSR Impact
TDSR limits total debt (incl. credit cards) to 55% income. MSR for HDB: 30%. Example: $10K monthly income qualifies ~$1.8M bank loan ($5.5K payment). New launch spreads stress; resale hits full immediately.
Use Homejourney's eligibility calculator with Singpass for precise figures, auto-filling CPF/income.
CPF Usage Rules
New launches: Use OA per stage, Ordinary + Special/Medisave at TOP. Resale: Full upfront. Accrued Interest (AI) housing grant applies both ways.
Interest Rates and SORA Trends
Most loans peg to 3M SORA (3.0% avg 2026), vs fixed 3.5-4%. Banks: DBS 3M SORA +0.65%, UOCB +0.6%, HSBC competitive for new launches.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA stabilized post-2025 peak. Track live on Homejourney bank rates. Fixed suits resales for certainty; floating for new launches.
Additional Costs and Fees
- Stamp Duties: ABSD 17% additional for second property; Buyer’s Stamp (BSD) 1-6% both types.
- Legal Fees: $2-3K resale; similar BUC.
- Renovation: New launch $50-80K; resale varies (pre-renos save $20K+).[1]
- Defects: New: Developer warranty 12-24 months; resale as-is.
Total ownership cost: New launch higher initially due to reno convergence at TOP.
Decision Framework: Which Mortgage to Choose?
- Timeline: Need home now? Resale. Can wait? New launch.
- Cash Flow: Limited upfront? Progressive payments.
- Risk Tolerance: Valuation gap? Avoid resale COV.
- Investment: Rental yield? Resale. Appreciation? New launch.[3]
Practical advice: Search budgets on Homejourney property search. For joint applications, see Joint Home Loan Singapore: Complete Guide for Couples & Families | Homejourney ">Joint Home Loan Guide.
Frequently Asked Questions
Can I use the same bank for new launch and resale?
Yes, DBS/OCBC handle both. Compare packages on Homejourney.
Is BUC loan riskier than resale?
Longer exposure to rate changes, but lower initial payments. MAS regulates both equally.
How does TOP affect my mortgage?
Full loan activates; start full repayments. Plan via Homejourney calculator.
What's better for first-time buyers?
HDB new flats use progressive; private resale for speed.
Can I refinance mid-progressive?
Limited till 10% paid; post-TOP like resale. Homejourney simplifies.
ABSD differences?
Same rates; new launches delay payment to TOP.
Next Steps with Homejourney
1. Compare rates: View DBS, OCBC, UOB & more.
2. Calculate eligibility: Instant with Singpass.
3. Apply multi-bank: One form, multiple offers.
4. Search properties: Find new launches or resales in budget.
Homejourney ensures safe transactions with verified data, prioritizing your trust. Connect with our mortgage brokers for personalized advice. Disclaimer: Not financial advice; consult professionals.
