Using Sale Proceeds for Down Payment: Bank Rate Comparison Guide

Using Sale Proceeds for Down Payment: Maximizing Your Financing Options

When you sell a property in Singapore, the proceeds from that sale can significantly boost your down payment for your next purchase—but only if you understand how banks evaluate this cash source and which lenders offer the best rates for your situation. At Homejourney, we believe that transparent financial guidance and access to competitive rates are essential to building trust in property transactions. This guide walks you through how to use sale proceeds strategically, compare bank rates, and secure the best mortgage terms for your upgrade.

How Sale Proceeds Work as Down Payment Cash

Sale proceeds represent the net cash you receive after selling your current property—calculated by subtracting your outstanding mortgage, CPF refunds (principal and interest), and agent fees from your gross sale price. Unlike CPF funds, which have strict usage rules, sale proceeds are liquid cash that banks view favorably as down payment funds because they demonstrate genuine financial capacity and reduce your overall borrowing need.

For example, if you sell an HDB flat for $680,000 with an outstanding loan of $180,000 and CPF refund obligation of $360,000, your net cash proceeds would be approximately $140,000[1]. This cash can be applied directly toward your down payment on a new property, reducing the amount you need to borrow and potentially improving your mortgage approval odds.

Down Payment Requirements When Using Sale Proceeds

Singapore's Loan-to-Value (LTV) limits determine how much you can borrow, which directly affects your down payment requirement. For most buyers with no existing housing loans, the maximum LTV is 75%, meaning you need a 25% down payment[2][3].

The down payment structure typically breaks down as follows:

Total down payment required: 25% of purchase price (for first-time or single-property buyers)
Minimum cash portion: 5% of purchase price (must be paid in cash)
Remaining balance: 20% can be paid using CPF Ordinary Account or additional cash

When you have sale proceeds, you can use this cash to cover the entire down payment requirement—both the mandatory 5% cash portion and the additional 20% that would normally require CPF funds[2]. This flexibility is particularly valuable if your CPF balance is limited or if you want to preserve CPF savings for retirement.

Sale Proceeds and Stamp Duty Considerations

An important distinction: while sale proceeds can cover your down payment, stamp duties (Buyer's Stamp Duty and Additional Buyer's Stamp Duty) must be paid separately in cash. However, you can later claim reimbursement from your CPF Ordinary Account after the property is registered[2][3].

For a first-time buyer purchasing a private property, BSD typically ranges from $18,600 to $63,600 depending on the property price[2]. If you're buying a second property, ABSD adds a significant cost: 5% for Permanent Residents or 20% for Singapore citizens[3]. Plan to have sufficient cash on hand to cover both down payment and stamp duties upfront.

Comparing Bank Rates for Sale Proceeds Financing

When you have sale proceeds as down payment cash, you're in a strong position to negotiate favorable mortgage rates. Banks view this as lower risk because you're reducing your LTV ratio and demonstrating financial stability. The best rates typically come from Singapore's major banks: DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, and RHB Bank[1].

Most banks offer home loans based on SORA (Singapore Overnight Rate Average) plus a spread, or fixed rates for lock-in periods. The chart below shows recent SORA trends to help you understand how rates have moved and what to expect when comparing offers:

When comparing rates across banks, focus on the effective rate (SORA + spread) rather than just the headline rate. For example, a bank offering SORA + 1.5% may be more competitive than one offering SORA + 1.8%, depending on the current SORA level. Use Homejourney's bank rates comparison tool to see real-time rates from all major lenders and calculate which option saves you the most over your loan tenure.

Key Bank Rate Factors When Using Sale Proceeds

Several factors influence the rates you'll receive:

Loan tenure: Longer tenures (25-30 years) typically carry higher rates than shorter ones (15-20 years)
LTV ratio: Lower LTV ratios (achieved by using larger down payments from sale proceeds) often qualify for better rates
Your credit profile: Strong income, stable employment, and good credit history improve rate offers
Property type: Resale properties may have slightly different rates than new launches
Lock-in period: Fixed rates for 2-3 years typically cost more than floating SORA rates

Banks compete aggressively for customers with strong down payments and low LTV ratios. By having substantial sale proceeds, you can leverage this to negotiate better terms. On Homejourney, you can submit a single application and receive competing offers from multiple banks simultaneously—letting banks compete for your business rather than approaching each one individually.

Timing Your Property Upgrade with Sale Proceeds

A critical consideration: in Singapore, you must sell your current property before purchasing a new one if you want to avoid Additional Buyer's Stamp Duty (ABSD)[1]. This "sell-first" strategy means your sale proceeds are available immediately for your down payment, and you won't face the 5% ABSD (for PRs) or 20% ABSD (for Singapore citizens) that applies when buying a second property while still owning the first.

This timing advantage makes using sale proceeds particularly valuable—not only do you have cash for down payment, but you also avoid substantial ABSD costs that would further strain your finances. Plan your sale and purchase timeline carefully to maximize this benefit, and work with a property agent and mortgage broker who understand the regulatory requirements.

Calculating Your Borrowing Power with Sale Proceeds

To determine how much you can borrow and what mortgage rates you'll qualify for, use Homejourney's mortgage eligibility calculator at bank-rates. Input your sale proceeds amount, desired property price, and loan tenure to see:

Maximum loan amount you can borrow
Total down payment required
Estimated monthly repayment across different rate scenarios
Which banks offer the best rates for your profile

For example, if you have $140,000 in sale proceeds and want to purchase a $500,000 property, you'd need a total down payment of $125,000 (25%)[2]. Your sale proceeds cover this entire requirement, and you'd borrow $375,000. At current SORA rates plus typical bank spreads, your monthly repayment would range from approximately $2,200-$2,400 depending on your chosen tenure and rate type.

Homejourney's Multi-Bank Application Advantage

Rather than approaching each bank individually with rate inquiries, Homejourney streamlines the process through our integrated platform. Here's how it works:

One application, multiple offers: Submit your details once using Singpass for instant auto-fill, and qualified banks will compete for your business
Real-time rate comparison: See live rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and other major lenders
Transparent terms: Compare not just rates, but lock-in periods, early repayment penalties, and other conditions side-by-side
Faster approval: Banks prioritize Homejourney applications, and using Singpass eliminates paperwork delays

This approach is particularly valuable when you have sale proceeds, because banks know you're a lower-risk borrower, and they'll often offer their best rates to win your business. You're not just comparing rates—you're letting banks compete for you.

Frequently Asked Questions

Can I use all my sale proceeds for down payment, or do I need to keep some as cash reserves?

You can technically use all sale proceeds for your down payment, but banks and financial advisors recommend keeping 3-6 months of mortgage payments as emergency reserves. This protects you if unexpected expenses arise. Additionally, you'll need separate cash for stamp duties, which must be paid upfront before you can claim CPF reimbursement.

How long does it take to receive sale proceeds after selling my property?

Typically, you'll receive sale proceeds 5-7 business days after the property transfer is completed and registered at the Singapore Land Authority. Plan your property purchase timeline accordingly—you may need to negotiate a later completion date with your seller to ensure sale proceeds are available for your down payment.

Will using sale proceeds affect my mortgage approval chances?

Positively, yes. Banks view sale proceeds as evidence of financial responsibility and lower risk. A larger down payment funded by sale proceeds reduces your LTV ratio, which improves approval odds and often qualifies you for better interest rates. This is one of the strongest advantages of having sale proceeds available.

Should I use sale proceeds for down payment or invest them elsewhere?

This depends on your financial goals and risk tolerance. Using sale proceeds for down payment reduces your mortgage amount and monthly payments, which is generally the safest approach. However, if you have investment opportunities with returns exceeding your mortgage rate, you might consider borrowing more and investing the proceeds. Consult a financial advisor for guidance specific to your situation.

Can I compare rates from all banks on one platform?

Yes. Homejourney's bank rates page displays real-time rates from Singapore's major banks, allowing you to compare SORA spreads, fixed rates, lock-in periods, and other terms instantly. You can also submit a single application to receive competing offers from multiple banks.

Start Your Property Upgrade Journey with Homejourney

Using sale proceeds strategically is one of the most powerful ways to secure favorable mortgage terms and reduce your overall borrowing costs. At Homejourney, we're committed to making this process transparent, safe, and straightforward. Our platform prioritizes your financial security by providing verified information, real-time rate comparisons, and access to Singapore's most competitive lenders.

Ready to compare rates and get mortgage offers? Visit Homejourney's bank rates comparison tool to see current rates from all major banks, calculate your borrowing power with our eligibility calculator, and submit your application to multiple lenders simultaneously. Let banks compete for your business—you deserve the best possible terms.

For comprehensive guidance on your entire property upgrade strategy, including timing, financial planning, and regulatory considerations, read our Using Sale Proceeds for Down Payment: Homejourney's Complete Guide ">complete guide to using sale proceeds for down payment.