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 to 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, with growing income and improving demand for ECs, it 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 do not have any debt or financial commitment.
- Monthly instalments is calculated using an interest rate of 3.5%, which is the recommended rate from MAS to calculate instalments 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 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 is still unchanged and is up to 80% of the unit value.

maximum amount : 921k * 80% = 737k

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 $11k, roughly $11,050 to be more exact. The monthly instalment is $3310.

The initial outlay required is the 20% downpayment would be $185k, $22,300 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $11,050 per month, you will need to also have a savings of at least $209,800.

## 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 is still unchanged and is up to 80% of the unit value.

maximum amount : 1.026M * 80% = 822k

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 $12k, roughly $12,350 to be more exact. The monthly instalment is $3700.

The initial outlay required is the 20% downpayment would be $206k, $25,400 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $12,350 per month, you will need to also have a savings of at least $233,900.

## 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 is still unchanged and is up to 80% of the unit value.

maximum amount : 1.2095M * 80% = 968k

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 $14k, roughly $14,500 to be more exact. The monthly instalment is $4350.

The initial outlay required is the 20% downpayment would be $242k, $30,900 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $14,500 per month, you will need to also have a savings of at least $275,400.

## 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 is still unchanged and is up to 80% of the unit value.

maximum amount : 1.2235M * 80% = 979k

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 $14k, roughly $14,660 to be more exact. The monthly instalment is $4400.

The initial outlay required is the 20% downpayment would be $245k, $31,400 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $14,660 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 is still unchanged and is up to 80% of the unit value.

maximum amount : 1.536M * 80% = 1.229M

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 $169k in cash or CPF. The monthly instalment in this case is $4760.

The initial outlay required is the 20% downpayment would be $308k, $40,700 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does 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 $520,200.

## 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 is up to 80% of the unit value.

maximum amount : 2.0145M * 80% = 1.612M

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 instalment in this case is $4760.

The initial outlay required is the 20% downpayment would be $403k, $55,100 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does 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 this is an estimated figures that help you with your initial financial plans, and does not represent the actual values. You will need to refer to the respective banks for actual loan amounts.*

**What is the maximum EC price can you afford?**

Bonus tips! You can also use the below steps to calculate the maximum EC price that you can afford based on your salary.

- Calculate your combined salary.
- Monthly Instalment = Calculate salary * 30% (The maximum instalments you can pay per month is 30% of your salary. )
- Maximum Loan = Monthly Instalment * 360 (The maximum loan period is 30 years)
- Maximum EC value = Maximum loan * 0.765 (Assuming loan interest = 3.5%, 0.765 is an estimation of your loan by taking into account loan interest)

*Do note that this is an estimated figures that help you with your initial financial plans, and does not represent the actual values. You will need to refer to your respective property agents for advice.*

**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 bedder for your stay. ðŸ™‚

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 | $11,050 | $209,800 |

3 Roomer | $12,350 | $233,900 |

3 Roomer + 1 Deluxe | $14,500 | $275,400 |

3 Roomer + 1 Premium | $14,660 | $278,900 |

4 Roomer | $16,000 | $520,200 |

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.