Progressive Payments on a New Launch: What You Actually Pay, and When

Buy a completed resale flat and the money moves once: you pay your quarter, the bank pays its three-quarters, and the mortgage starts the next month at full size. Buy a new launch that is still a hole in the ground and none of that holds. Under the progressive payment scheme — the default way almost every building-under-construction (BUC) unit is financed — you pay in ten instalments pegged to construction milestones, the bank's loan only wakes up partway through, and your monthly repayment climbs stage by stage as the tower rises. It is not "pay later." It is a front-loaded cash test in the first two months, followed by a mortgage that grows in your hand. Here is the whole schedule, on a worked S$2 million purchase. Methodology published. No spin.

For the worked example, assume a Singapore citizen buying a first home — so the loan-to-value is 75% (a S$1,500,000 loan against S$500,000 of equity), and there is no Additional Buyer's Stamp Duty. Picture the unit as a two-bedroom at a launch still under construction — say Grand Dunman in District 15, selling off-plan for completion around 2028. The mechanics below are the same for any BUC purchase; only the numbers scale.

The ten stages, in full

The schedule is not the developer's to invent. It is fixed by the Housing Developers Rules, which is why it looks the same across projects and why every payment is tied to a certified construction milestone rather than a calendar date.

Read it as three acts. The first 20% is due before a single foundation is poured. The middle stages — foundation through external works — track the build over roughly two to three years. Then the two big ones: 25% at TOP, when you collect keys, and the final 15% at CSC, the legal completion that typically lands about a year after TOP.

The first two months are the real test

The scheme's reputation for gentleness comes entirely from its back half. The front half is anything but. Within about eight weeks of booking you must produce 20% of the price — S$400,000 — plus Buyer's Stamp Duty, and the loan has not paid a cent.

Buyer's Stamp Duty on a S$2,000,000 home is S$69,600, computed on the standard residential tiers, and it falls due within 14 days of exercising the Option. So the early bill looks like this: the 5% booking fee (S$100,000) on day one, the balance to 20% (S$300,000) at signing within eight weeks, and S$69,600 of stamp duty in between — S$469,600 out the door before the bank shares the load.

One hard constraint inside that number: the 5% booking fee must be cash. CPF cannot be used for the booking. The balance up to 20%, and the stamp duty, can be met from your CPF Ordinary Account — but that first S$100,000 has to be liquid. This is the gate most buyers underestimate, because the marketing talks about the gentle middle and skips the cliff at the start.

When the loan actually starts working

Notice the "from your equity" column above. The bank disburses on a reverse-waterfall basis: your 25% equity is spent first, and only once it is exhausted does the loan begin to draw. Your S$500,000 covers the 5% booking, the 15% at signing, and half of the 10% foundation payment. The loan picks up the other half of foundation and everything after it.

The practical consequence is that the loan does nothing until foundation, draws steadily through the construction stages, and does its single heaviest lift at TOP — where a 25% instalment (S$500,000) falls due in one go and the drawn loan jumps from S$700,000 to S$1,200,000. If your financing was ever going to be stress-tested, it is at TOP, not at booking.

Your mortgage grows with the building

Because you are charged interest only on what the bank has actually disbursed, the monthly cost starts trivially small and ramps. BUC loans are almost always SORA-pegged floating packages, so the rate below is illustrative — we use 2.5% a year — and your actual rate will differ:

That last jump is the one buyers miss. The comfortable ~S$1,500-a-month figure during construction is interest-only on a half-drawn loan. The real repayment — principal plus interest on the full S$1,500,000 — only appears once the project completes, and it is more than four times the mid-construction number. Plan your cash flow around the completion figure, not the one you see while the crane is still up.

It is also worth saying plainly what the scheme is and is not. It is a cash-flow convenience, not a discount: you pay interest on every dollar the bank has drawn, throughout construction, so spreading the payments does not make the home cheaper — it makes the early years lighter. (The Deferred Payment Scheme, where a developer lets you hold off most of the price for a fee, is a different animal with its own premium — a topic for another day.)

What to actually do with this

Size the first two months, not the average. The gentle middle is real, but the S$469,600 up front — of which at least S$100,000 must be cash — is the gate. Have it liquid before you book, not "findable."

Budget the completion mortgage from day one. The number that matters for long-run affordability is the ~S$6,729 that starts at CSC, not the ~S$1,500 you pay while the building goes up. If the completion figure is uncomfortable, the purchase is uncomfortable — the construction phase is just a grace period.

Respect the rate risk. Your loan balance escalates across two to three years of construction, and it does so on a floating rate. If SORA climbs before completion, a bigger balance meets a higher rate at exactly the wrong time. Stress-test the completion payment a couple of points above today's rate before you commit.

You can run your own unit, loan and timeline through the new-condo purchase planner, and check where mortgage pricing sits this month in our mid-2026 mortgage read. The scheme is a genuinely useful piece of financial plumbing — but only if you plan for the cliff at the start and the step-up at the end, rather than the easy stretch in between.

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Sources: The ten-stage progressive payment schedule and its basis in the Housing Developers Rules per Mortgage Master and PropertyGuru, cross-checked against the standard Sale and Purchase Agreement payment schedule. Buyer's Stamp Duty computed on the residential tiers in force since 15 February 2023 (1% first S$180k, 2% next S$180k, 3% next S$640k, 4% next S$500k, 5% next S$1.5m). Monthly figures computed by TRIBE at an illustrative 2.5% floating rate; BUC packages are SORA-pegged and actual rates vary. Grand Dunman (District 15) referenced as an illustrative under-construction launch only. Loan, LTV and stamp-duty rules are set by MAS, HDB and IRAS and can change — verify current terms before committing.

Silas Tan is a District Director at Huttons Asia and co-founder of TRIBE. This article is for informational purposes and does not constitute financial or investment advice. CEA Registration R000303I.