Should you buy a BTO or Resale HDB Flat? 3 Things to consider if you are a first-timer

A typical Built-To-Order (BTO) flat is usually the first option for an engaged or newly-wed couple looking to start their lives together. We know that BTOs are the common topic to bring up from boyfriends as a ‘Will you marry me?’ question. This has become a common trend in our society. It’s frequently brought up by our parents or grandparetns, as the story on how they got together.

So if you are here and your future wife said “yes!”, congratulations to both of you! I wish you guys a wonderful life together and bring many joys into our world! Heh! Although, now you are wondering if a BTO is still the right choice for you and your spouse? Let’s take a look at what we normally consider when choosing our first home between BTOs or Resale HDB Flats.


What are the 3 Important Things to consider?

BTO vs Resale HDB Flat Waiting Time?

What happens after booking your BTO unit? Obviously, we will have to wait till the collection of keys when the HDB Block has obtained it’s Temporary Occupational Permit (TOP). Before the pandemic, a BTO standard building time spans from 2 to 3 years. Now, at this present time, we are looking at a waiting time from 3 to 5 years depending on the pace of construction to the specific BTO clusters, not including any hiccups. *touch wood* 😛

With the current post covid waiting time for new BTOs to be fully constructed. Many first-time buyers were attracted by the immediate keys collection for their homes and turned to the resale HDB market instead. I definitely felt the wave of this phenomenon, especially after the re-opening of covid-19 restrictions, with my daily buy and sell activities in this industry. 

BTO vs Resale HDB Flat Affordability

The common believe is that BTO costs cheaper than Resale and that’s true! Most owners look to sell their flats right after the 5 years Minimum Occupational Period (MOP). This trend is one of the oldest in the books! Imagine ‘David’ and ‘Mary’ are recently engaged, looking to purchase their home together and they are contemplating between a BTO or Resale HDB flat. The major topic to be brought up between ‘David’ and ‘Mary’ is the consideration of waiting time.

Why is this an important question? Can you imagine yourself booking a BTO and to wait 3 to 5 years just to collect your keys!? After collecting your keys, you are still subjected to the 5 years of MOP! That’s up to 10 years of your life span! Hence, the important question is “Are you willing to wait that long, to be anchored down? Before you are able to explore or move homes again.” 

With the new cooling measures implemented in Dec 2021, the borrow limit for HDB Loan was  reduced from 90% to 85% Loan-To-Value (LTV). Let’s say ‘David’ and ‘Mary’ whom just got engaged, starting out their lives together. Their initial financials were perfect for a $500,000 HDB 5-Room flat purchase, consisting of a $450,000 loan. Accounting into effect of the latest changes, ‘David’ and ‘Mary’ are now placed in a difficult position. The new maximum loan for them to take on a $500,000 HDB purchase falls to $425,000, amounting to a $25,000 difference. This caused the total downpayment to increase by $25,000 on a $500,000 purchase for both ‘David’ and ‘Mary’, amounting to $75,000.

Certainly, buyers are willing to pay a premium for resale HDB flats, especially for those HDB flats that have just met 5 years MOP. The immediate handover of the flat attracts first time homeowners like ‘David’ and ‘Mary’ or even yourself!

BTO vs Resale Grants

The ‘Enhanced Housing Grant’ is open to both BTO and Resale HDB flats. The perks of buying a resale HDB flat is that it provides 2 more grants compared to a BTO, which are the ‘Resale Flat Grant’ and ‘Proximity Housing Grant’.  You may find more information on the HDB Website under ‘CPF Grants’. 


The opportunity cost for a BTO is relatively lower compared to a Resale. Nevertheless, it is in exchange of the waiting time and it can be a heavy burden or consideration for couples looking at an immediate home. Regardless, if the waiting time is not an issue to buyers. It proves to serve as a home and a value asset. Highly recommended for first timers to test their luck in the balloting. Thereafter, If you manage to ballot for a BTO, congratulations to you! Else, perhaps it’s time to consider a resale or you may WhatsApp me directly for advice using the floating chat icon.