I purchased one HDB 4 room flat in early 2006 with price of 268K SGD. The bank loan was paid off in end of 2009. The total cost including legal fee and interests is actually 293K SGD.
- Legal fee plus stamp duty: 6492 (2% of total cost)
- All interests paid: 19249 (7% of total cost)
- Purchase price: 268000 (91% of total cost)
With this study, the quick pay-off for bank loan plays important role in the whole process. The selling price should be based on 5%-7% yearly appreciation. Hence, the recommended selling priced for 2010 should be around 356K or 384K. The current market price is around 410K-420K SGD, which translates to 10% accumulative growth for the base cost.
We will consider buying a private property, and rent the HDB to cover the installment. Based on the latest HDB policy, we are allowed to rent the whole flat and the rental should be around 2k SGD/month, roughly 9% yearly return.