It has been a long time since we first published the post on EC affordability and since then, there have been many housing policy changes pushed by HDB in tandem with the thriving economy and the higher selling price of the executive condo (EC).
Most notably, would be the rise of the income ceiling of the average monthly household income from $14,000 to $16,000. This change will allow more households to be able to consider getting ECs as a housing option instead of private condo / landed properties.
However, growing income and improving demand for ECs have led to an upward adjustment of the ECs selling price. In fact, since the launch of the Piermont Grand in 2019, ECs are now currently priced at PSF of more than $1000.
In this post, we will be using OLA EC as a baseline for our calculations. OLA EC comes with wide options, from 2 bedders to 5 bedders for buyers to choose from. However, we see that the most expensive unit from this development comes up to $2.021 million, which is one hell of money if you are eyeing that unit.
Similarly, we will explore the minimum salary that you will need to earn in order to afford the monthly instalment.
How much must you earn to afford an Executive Condominium (EC)?
Assumptions made:
- Both owners are less than 35 years old, which means that the loan tenure is the maximum of 30 years.
- The couple does not have any debt or financial commitment.
- Monthly installments are calculated using an interest rate of 3.5%, which is the recommended rate from MAS to calculate installments amount.
- Income remains constant for the entirety of the duration.
- The couple is taking the maximum loan based on their income in order to reduce the initial cash outlay for the purchase.
- The couple opts for a progressive payment scheme.
- Grant is not considered in the calculations.
2 Bedroom
The median price of a 2 roomer is $921k based on the indicative price range. The maximum amount that a couple can borrow from the bank have been changed in 2018 and is now at 75% of the unit value.
maximum amount : 921k * 75% = 691k
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is slightly above $10k, roughly $10,350 to be more exact. The monthly installment is $3100.
The initial outlay required is the 25% downpayment would be $231k, $22,300 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $10,350 per month, you will need to also have a savings of at least $255,800.
3 Bedroom
The median price of a 3 roomer is $1.026M based on the indicative price range. The maximum amount that a couple can borrow from the bank has been changed in 2018 and is now at 75% of the unit value.
maximum amount : 1.026M * 75% = 770k
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is above $11k, roughly $11,550 to be more exact. The monthly installment is $3500.
The initial outlay required is the 25% downpayment would be $257k, $25,400 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $11,550 per month, you will need to also have a savings of at least $284,900.
3 Bedroom + 1 Deluxe
The median price of a 3 + 1 deluxe is $1.2095M based on the indicative price range. The maximum amount that a couple can borrow from the bank has been changed in 2018 and is now at 75% of the unit value.
maximum amount : 1.2095M * 75% = 908k
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is above $13k, roughly $13,600 to be more exact. The monthly instalment is $4100.
The initial outlay required is the 25% downpayment would be $303k, $30,900 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $13,600 per month, you will need to also have a savings of at least $336,400.
3 Bedroom + 1 Premium
The median price of a 3 + 1 premium is $1.2235M based on the indicative price range. The maximum amount that a couple can borrow from the bank has been changed in 2018 and is now at 75% of the unit value.
maximum amount : 1.2235M * 75% = 918k
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is above $13k, roughly $13,750 to be more exact. The monthly installment is $4150.
The initial outlay required is the 25% downpayment would be $306k, $31,400 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $13,750 per month, you will need to also have a savings of at least $278,900.
4 Bedroom
The median price of a 4 roomer is $1.536M based on the indicative price range. The maximum amount that a couple can borrow from the bank has been changed in 2018 and is now at 75% of the unit value.
maximum amount : 1.536M * 75% = 1.152M
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is actually more than $16k, which is above the maximum income eligibility of $16k for EC. The couple would need to have an income of $16k in this case, in order to meet the requirements. We will need to assume that the couple can only loan the maximum of $1060k and pay the difference of $92k in cash or CPF. The monthly installment in this case is $4800.
The initial outlay required is the 25% downpayment would be $384k, the difference of $92k, $40,700 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $16,000 per month, you will need to also have a savings of at least $519,200.
5 Bedroom Penthouse
The median price of a 5 roomer penthouse is $2.0145M based on the indicative price range. The maximum amount that a couple can borrow from the bank have been changed in 2018 and is now at 75% of the unit value.
maximum amount : 2.0145M * 75% = 1.511M
One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).
Based on the above chart, the minimum income required is actually more than $16k, which is above the maximum income eligibility of $16k for EC. The couple would need to have an income of $16k in this case, in order to meet the requirements. We will need to assume that the couple can only loan the maximum of $1060k and pay the difference of $552k in cash or CPF. The monthly installment in this case is $4800.
The initial outlay required is the 25% downpayment would be $504k, the difference of $451k, $55,100 for stamp duty, and $2500 for lawyer fees. These only include the big-ticket payment and do not include the miscellaneous fees that you need to fork out here and there.
This means that other than earning a minimum income of $16,000 per month, you will need to also have a savings of at least $1.013M.
Do note that these are estimated figures that help you with your initial financial plans, and do not represent the actual values. You will need to refer to the respective banks for actual loan amounts.
Last words
We can see that while there is a significant jump in terms of the lowest quantum of each unit type, the unit size of each layout seems comfortable and ample.
However, your wallet may not feel “comfortable” after looking at the upfront payment for each unit type, especially so if you are aiming for the 5 bedroom penthouse. However, if you have a spare $1million lying around or hidden in the biscuit tin, you might consider getting the 5 bedders for your stay. 🙂
However, if you are looking at the minimum monthly income you need to earn based on maximum loan, then the figures are as follows:
| No of Rooms | Monthly Income | Upfront Payment |
| 2 Roomer | $10,350 | $255,800 |
| 3 Roomer | $11,550 | $284,900 |
| 3 Roomer + 1 Deluxe | $13,600 | $336,400 |
| 3 Roomer + 1 Premium | $13,750 | $278,900 |
| 4 Roomer | $16,000 | $519,200 |
| 5 Roomer | $16,000 | $1,013,000 |
There you go. Do also check out our guide on how much an EC costs if you are interested in getting an EC.
