The single most misunderstood thing about buying a building under construction (BUC) is the shape of the spending. Roughly 25% of the price plus stamp duty leaves your pocket in the first eight weeks — before a single brick is laid — and then the bank takes over, disbursing the loan stage by stage as the building rises. Your monthly instalment starts at a few hundred dollars and grows to its full size only at legal completion, three to four years later.
The worked example and its assumptions
Every figure in this guide comes from one consistent scenario, so the numbers add up as you read. Change the price and everything scales proportionally; change the loan terms and the instalments move. The mechanics stay identical.
Worked example — assumptions
- Purchase price (3-bedroom new launch)$2,400,000
- Buyer profileNo existing housing loan, 0% ABSD
- Loan-to-Value (LTV)75% — $1,800,000 loan
- Loan tenure30 years
- Interest rate assumed1.6% p.a.
- Buyer's Stamp Duty (BSD)$89,600
- Legal fee (est.)$3,000
The 1.6% rate is an illustration in line with floating packages available in mid-2026 — the cheapest first-year packages we track start at 1.35%. See our current mortgage rates table for what banks are actually quoting, and note that banks assess your loan eligibility at a 4% stress-test rate regardless of the package rate (explained in our TDSR guide).
Phase 1 — the first eight weeks: 25% plus stamp duty
This is the heavy phase, and it is entirely front-loaded. The sequence below follows the standard timeline set by the Housing Developers Rules.
Option to Purchase (OTP) — 5% in cash
You book the unit and pay the 5% option fee: $120,000 in our example. This portion is cash only — CPF cannot be used for the option fee on a new launch.
Sale & Purchase Agreement delivered
The developer's solicitors deliver the S&P Agreement, usually within 14 days of the OTP.
Exercise the S&P Agreement
You sign and return the agreement. From this point the purchase is legally binding on both sides.
Buyer's Stamp Duty — $89,600
BSD is due within 14 days of exercise. On $2.4 million the tiered computation works out to $89,600 — roughly 3.7% of the price. It is payable in cash first for a BUC purchase, with CPF reimbursement available, and any ABSD would be due at the same time. Legal fees of about $3,000 typically land in the same window.
Balance downpayment — 15%
The remaining $360,000 of the 25% downpayment is due, payable with CPF Ordinary Account savings, cash, or a mix. This completes the sale stage.
Tally so far: $120,000 cash + $360,000 CPF/cash + $89,600 BSD + $3,000 legal = $572,600 inside two months. This — not the monthly instalment — is the real affordability gate for a new launch.
Phase 2 — construction: the loan takes over
From the foundation stage onwards, payments are triggered by the developer certifying completion of each construction milestone. At 75% LTV, your remaining 5% of equity is consumed at the foundation stage, and every payment after that is disbursed by the bank. Each disbursement makes your monthly instalment step up.
| Stage | Indicative timing | % | Amount | Your outlay (cash/CPF) | Loan disbursed | Instalment after stage |
|---|---|---|---|---|---|---|
| Option fee (OTP) | Day 0 | 5% | $120,000 | $120,000 cash | — | — |
| Balance downpayment | 8 wks from OTP | 15% | $360,000 | $360,000 | — | — |
| Foundation | 6–9 mths | 10% | $240,000 | $120,000 | $120,000 | $420 |
| Reinforced concrete framework | +6–9 mths | 10% | $240,000 | — | $240,000 | $1,260 |
| Partition walls | +3–6 mths | 5% | $120,000 | — | $120,000 | $1,680 |
| Roofing / ceiling | +3–6 mths | 5% | $120,000 | — | $120,000 | $2,100 |
| Doors, windows & plumbing | +3–6 mths | 5% | $120,000 | — | $120,000 | $2,520 |
| Car park, roads & drains | +3–6 mths | 5% | $120,000 | — | $120,000 | $2,939 |
| TOP — keys collected | +9–12 mths | 25% | $600,000 | — | $600,000 | $5,039 |
| CSC — legal completion | +12 mths | 15% | $360,000 | — | $360,000 | $6,299 |
Two features of this table are worth internalising. First, the instalment ramp is gentle: for most of the construction period you are paying between $420 and about $2,939 a month — useful breathing room if you are renting in the interim or still servicing another home. Second, the big jumps come late: TOP alone disburses 25% of the price and lifts the instalment from roughly $2,939 to $5,039 overnight, then CSC takes it to the full $6,299. Budget for the end state, not the construction-phase figure.
Where the money comes from: cash vs CPF vs loan
Total outlay before full loan takeover — $2.4M example
- Option fee — cash only$120,000
- Balance downpayment — CPF OA / cash$360,000
- Foundation stage top-up — CPF OA / cash$120,000
- Buyer's Stamp Duty$89,600
- Legal fee (est.)$3,000
- Total buyer outlay$692,600
- Financed by loan thereafter$1,800,000
The $692,600 total is the number to plan around: about 28.9% of the purchase price. Of it, only the $120,000 option fee is strictly cash; the rest can draw on CPF Ordinary Account savings subject to CPF limits. Buyers using maximum CPF still need meaningful cash for the option fee and, in practice, a buffer for legal disbursements, renovation deposits and the months where instalments overlap with rent.
Phase 3 — TOP, CSC and moving in
The Temporary Occupation Permit (TOP) is the milestone buyers celebrate — keys are collected, defects inspection begins, renovation can start. Financially it is also the steepest step, releasing 25% of the price. Legal completion follows at the Certificate of Statutory Completion (CSC), typically around 12 months after TOP, when the final 15% is disbursed and the project formally completes. From CSC your instalment is at its full, permanent level.
Verdict: what to actually plan for
Treat a new launch purchase as three distinct budgeting problems. One: $120,000-per-million in cash (5%) ready before booking day, plus stamp duty and legal fees shortly after. Two: 25% of the price in total equity within eight weeks. Three: a monthly commitment that quadruples between mid-construction and CSC — stress-test your household budget against the final instalment at the 4% regulatory rate, not the teaser-phase figure. Buyers who clear all three tests rarely get surprised; buyers who anchor on the $420 foundation-stage instalment often do.
Planning the upgrade route from an HDB flat? The sequencing questions — when to sell, where the proceeds go, what budget they unlock — are covered in our companion guide, Selling your HDB to buy a new launch.
Frequently asked questions
What is the progressive payment scheme?
The standard payment structure for buildings under construction, set under the Housing Developers Rules. You pay in stages tied to construction milestones — 5% option fee, 15% at sale completion, 5–10% at each of six construction stages, 25% at TOP and 15% at CSC — rather than the full price at once.
How much cash do I need upfront?
The 5% option fee is cash only. The next 15%, BSD and stage payments can generally use CPF OA savings. On $2.4 million, expect about $572,600 in total within the first eight weeks, of which $120,000 must be cash.
When do monthly instalments start?
At first loan disbursement, usually the foundation stage 6–9 months in. They start small — about $420 in our example — and step up at every milestone until fully drawn at CSC.
What if I don't exercise the OTP?
The developer retains 1.25% of the purchase price and refunds the remaining 3.75% of the option fee. On $2.4 million that is a $30,000 forfeiture.
Can I use CPF for a new launch?
Yes, for everything except the 5% option fee, subject to CPF usage limits: the balance downpayment, BSD (reimbursed after cash payment for BUC), uncovered stage payments and monthly instalments.
When is BSD due, and how is $89,600 derived?
Within 14 days of exercising the S&P Agreement. The tiers are 1% on the first $180,000, 2% on the next $180,000, 3% on the next $640,000, 4% on the next $500,000, 5% on the next $1.5 million and 6% above $3 million — on $2.4 million: $1,800 + $3,600 + $19,200 + $20,000 + $45,000 = $89,600.
What is the difference between TOP and CSC?
TOP lets you collect keys and move in, with 25% of the price due. CSC is final legal completion roughly a year later, when the last 15% is paid and the loan is fully disbursed.
Will I pay rent and instalments at the same time?
If you sell your existing home first and rent while waiting for TOP, yes — but the progressive structure keeps the overlap manageable, with instalments below about $3,000 for most of the construction period in our example.
Do I pay ABSD on a new launch?
ABSD depends on your residency and property count at purchase, not on the property being a new launch. A Singapore citizen with no other residential property pays 0%; owning another property triggers ABSD, with remission available to eligible married couples who sell their first home within the stipulated window.
Update history
- Guide published. Worked example at $2,400,000, 75% LTV, 30-year tenure, 1.6% p.a. illustrative rate; BSD computed under prevailing tiered rates.
Methodology & sources. Stage percentages and sequencing follow the standard progressive payment scheme under the Housing Developers (Control & Licensing) Act and Housing Developers Rules. Stamp duty computed from IRAS published BSD rates. Instalment estimates computed on cumulative disbursed loan amounts at the stated illustrative rate.
Disclaimer. Figures are illustrative estimates for education, not financial, legal or property advice. Actual timelines vary by project and construction method; actual costs depend on your loan package, CPF position and tax profile. Verify against your S&P Agreement, IRAS and your bank, and seek professional advice for your own situation.
Talk it through with an advisor
Our research tells you what the data says. If you want to work through what it means for your own situation — budget, ABSD position, timing an HDB sale, or comparing launches against resale options — you can request a one-to-one consultation.
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