Buying a resale HDB flat in Singapore? Then you’ve probably heard the term HDB valuation — and maybe even COV (Cash Over Valuation). Confused? You’re not alone.
Many buyers get caught off guard when the agreed price is higher than HDB’s official valuation — and that difference? It has to be paid in cash.
In this guide, we’ll explain what HDB valuation really means, how COV works, and what to watch out for — so you can buy smart, budget right, and avoid any nasty surprises.
Let’s break it down, step by step.
What is Cash Over Valuation (COV) in an HDB Purchase?
COV, or Cash Over Valuation, is one of the most misunderstood — and most expensive — parts of buying a resale flat in Singapore. It’s not part of the official price tag you see online, and it can quietly add $10,000–$80,000 to your upfront costs if you’re not prepared.
Let’s break it down clearly.
What does COV mean and how is it calculated?
COV is the difference between your offer price and HDB’s official valuation.
It kicks in when you agree to pay more than what HDB thinks the flat is worth.
🔎 Simple example:
- Seller’s price: $600,000
- HDB’s valuation: $570,000
- ➡️ COV: $30,000 (paid in cash, upfront)
This amount isn’t covered by your housing loan or CPF — it’s entirely out-of-pocket. Even if you’re eligible for a high loan amount, the bank or HDB will only finance up to the valuation, not your agreed price.
🧮 Want to double-check how much of your purchase price is loanable? Use our HDB home loan calculator to test scenarios.
Why COV exists and when buyers need to pay it
COV usually pops up when:
- The flat is in a hot location (e.g. near MRT or top schools)
- It’s rare or in high demand (e.g. corner units, high floor, unblocked views)
- Buyers are rushing to secure a deal and outbid others
Since HDB valuations rely on past transactions, but sellers can set future-facing prices, there’s often a gap — and that’s your COV.
Buyers pay COV only when the agreed price > valuation. If the seller’s price matches the valuation exactly, there’s no COV.
Related: Learn the full HDB resale procedure and timeline on HDB’s official site.
Why COV must be paid in cash and not CPF or loan
This part surprises many first-time buyers: you cannot use CPF or your housing loan to cover COV.
Why?
Because your loan amount (whether from HDB or a bank) is based on the valuation, not the agreed price. CPF usage also follows the same rule — up to the valuation only.
Which means:
- Your loan + CPF can cover up to $570,000 (in the earlier example)
- The $30,000 difference has to be paid in cash at the time of completion
📌 Pro tip: Always have a buffer set aside — COV can hit unexpectedly, especially in rising markets.
Need help planning for COV or structuring your financing? Speak with a trusted mortgage broker in Singapore who can guide you through your options.
What You Should Know About Paying COV
Cash Over Valuation (COV) doesn’t just affect your offer price — it can significantly impact your cash flow, loan eligibility, and risk exposure. Many buyers don’t realise just how much more they’ll need to fork out until it’s too late.
Here’s what you need to know before committing to a high-COV deal.
How does COV affect your total cash outlay for the flat?
Because COV must be paid entirely in cash, it adds significantly to your upfront costs — on top of other essentials like stamp duty and legal fees. The table below gives you a clear picture of how each cost is typically funded:
Breakdown of Upfront HDB Resale Costs and How They Are Paid
| Cost Component | How It’s Paid |
|---|---|
| HDB Valuation Amount | CPF / Housing Loan |
| COV (Amount Above Valuation) | Cash only (not loanable or CPF-eligible) |
| Buyer’s Stamp Duty (BSD) | CPF or Cash |
| Legal & Administrative Fees | CPF or Cash |
| Renovation or Furnishing | Cash or Personal Loan |
Use our BSD calculator to work out your full upfront payment based on the flat price and valuation.
How does COV relate to your bank loan or LTV limit?
When it comes to housing loans, the Loan-to-Value (LTV) ratio is always based on the lower of:
- The agreed resale price, or
- The official HDB valuation
That means even if you’ve secured a great loan package, you can only borrow based on the valuation amount, not your agreed price.
For example:
- Valuation: $580k
- Purchase price: $600k
- Max 75% LTV = loan cap of $435,000
- COV + remaining downpayment = all from cash/CPF
📌 This is why it’s so important to factor in COV when budgeting — especially if you’re stretching your CPF savings or loan eligibility.
What risks come with overpaying COV above valuation?
Overpaying COV can put you at risk in three key ways:
- Cash Drain: If you use a big chunk of your cash for COV, you may not have enough left for renovations, emergencies, or other homeownership costs.
- Negative Equity Risk: If the market cools and your flat’s value drops, you may owe more on your mortgage than the flat is worth — especially if you sell early.
- Tougher Refinancing Later: If you overpaid, future banks may not value your flat as high, limiting your ability to refinance or cash-out later on.
Not sure how much is “too much” for COV? Compare with recent transactions or consult a mortgage advisor before committing to the deal.
What is HDB Valuation and How Does It Work?
HDB valuation is the official value of a resale flat as determined by HDB’s appointed valuer — not the seller, not your agent. It’s important because it affects your loan amount, how much CPF you can use, and whether you’ll need to pay Cash Over Valuation (COV).
Let’s break down how it works
How does HDB determine the official valuation of a resale flat?
HDB uses a licensed private valuer to assess the flat after you get the Option to Purchase (OTP). The valuation is based on:
✔️ Recent transactions of similar units
✔️ Floor level & flat size
✔️ Remaining lease
✔️ Flat condition (renovated vs original)
✔️ Location — MRTs, schools, amenities
📌 You cannot choose the valuer. The valuation is submitted digitally and typically takes 3–5 working days.
See also: How to request an official flat valuation on HDB
(Note: HDB does not disclose exact valuation formulas — it’s based on past sales and internal assessment)
When is the valuation done during the resale process?
Understanding the timing of your valuation request is key to avoiding costly surprises like unexpected Cash Over Valuation (COV). You can only request an official valuation after receiving the Option to Purchase (OTP) from the seller. Here’s how the typical timeline looks:
Timeline for Submitting and Receiving HDB Valuation
| Step | Timeline |
|---|---|
| Seller grants OTP | Buyer accepts offer and signs Option |
| Buyer submits valuation request | Within 1 working day via MyHDBPage |
| Valuation outcome | 3–5 working days after submission |
📌 The final valuation directly affects your loan eligibility and CPF usage. If the agreed price is higher than the valuation, the difference becomes COV, which must be paid in cash.
Worried about busting your budget? Use our mortgage loan repayment calculator to check your comfortable loan range before making an offer.
What factors influence your flat’s valuation?
HDB valuations aren’t random. They’re based on recent resale data and key attributes of your flat. Here’s what valuers usually look at:
Key Factors That Influence HDB Valuation
| Factor | Impact on Valuation |
|---|---|
| Recent resale prices nearby | 🔼 Sets the base — higher recent prices raise valuation |
| Flat type & layout | 🔼 Larger flats typically have higher valuation |
| Remaining lease | 🔽 Shorter lease (esp. <60 years) reduces valuation |
| Floor level | 🔼 Higher floors usually command better valuation |
| Renovation & condition | 🔼 Well-renovated flats may receive a slight value boost |
| Location (MRT, schools) | 🔼 Prime areas with strong amenities = higher valuation |
Personally, I always recommend checking a few recent transactions in the same block before making an offer as it gives you a rough idea of how far off the seller’s price might be from the valuation. You can use HDB’s Resale Flat Prices Tool to do this quickly.
What Affects the Valuation of an HDB Flat?
Ever wondered why two similar flats can have very different valuations? That’s because HDB valuations aren’t just about square footage — they’re based on a mix of market trends and flat-specific factors.
Here’s what really moves the needle.
How location, lease balance, and renovation condition affect value
These three factors play a big role in determining your flat’s valuation:
- Location
Flats near MRT stations, good schools, hawker centres, or shopping malls often receive higher valuations. Mature estates like Bishan, Queenstown, or Toa Payoh tend to fetch more due to demand and convenience. - Remaining Lease
A shorter lease (especially under 60 years) can drag down your flat’s value. Valuers consider the lease decay when estimating how much your property is “worth” over time. This is why buyers often pay more for flats with 90+ years remaining. - Flat Condition & Renovations
While major renovations don’t guarantee a higher valuation, they do help. Flats that are modern, well-maintained, and move-in ready may receive a small boost — especially if they stand out in the area.
📌 Remember: Valuation isn’t sentimental. It’s based on quantifiable market value, not how much you spent on your built-in wardrobe or fancy tiles.
Do recent transactions in the area influence valuation outcomes?
Yes — this is one of the biggest factors valuers consider.
They look at past 3–6 months of similar transactions:
- Same block or neighbouring blocks
- Same flat type (e.g. 4-room, 5-room)
- Similar floor levels and orientation
If nearby units recently sold for $580k, that will likely anchor your valuation — regardless of what your seller is asking for.
Need a clearer picture of total costs based on value? Use our Buyer’s Stamp Duty calculator to estimate how much you’ll be paying upfront.
Can sellers or buyers influence the valuation request?
Short answer: No — neither party can control how the valuation is done.
What you can do:
- As the buyer, you’re the one who must submit the Request for Value on HDB’s portal (within 1 working day after getting OTP)
- The valuer may or may not physically inspect the flat — it’s at their discretion
What you can’t do:
- Pick your own valuer
- Submit photos or justify your offer price
- Appeal the outcome
It’s a neutral process designed to protect both buyer and seller — and ensure loans and CPF usage are based on real market data, not inflated pricing.
Still unsure if you’re overpaying for a resale flat? Our HDB home loan guide can help you plan your next move with confidence.
How to Check and Estimate Your HDB Flat’s Valuation
Since you can only get the official HDB valuation after securing the Option to Purchase (OTP), many buyers try to estimate the value before committing to an offer. This helps avoid unpleasant surprises like paying unexpected Cash Over Valuation (COV).
Here’s how to get a rough idea of what your dream flat might be valued at — even before making an offer.
Can buyers estimate valuation before getting the official report?
Yes — while you can’t get an official number upfront, you can make a very close estimate based on:
- Recent sale prices of similar flats
- Flat attributes like floor level, remaining lease, and location
- Trends in the neighbourhood (e.g. rising vs cooling market)
Most property agents and experienced buyers will review 3 to 5 past transactions in the same block or area to set expectations.
If the seller is asking significantly above these past prices, there’s a good chance COV will apply.
What tools or sites help track recent HDB resale prices?
Here are some reliable platforms to check historical HDB prices:
- 🏠 HDB’s Resale Flat Prices Tool
Official and direct from HDB. Lets you search by town, block, flat type, and transaction date. - 📈 Property portals like PropertyGuru or 99.co
Useful for comparing current listings (asking price) and recent past sales side-by-side. - 🧾 Mortgage brokers and agents
A knowledgeable mortgage consultant can help assess if a seller’s price is in line with the market and valuation trends.
Always compare at least 3 similar flats in terms of size, lease, and floor level to get an accurate estimate.
Why valuations and transaction prices often don’t match
The biggest reason is that HDB valuation is based on past data, while seller pricing reflects current demand — or just personal expectations.
So when:
- The market is heating up
- The flat is in a prime location
- There are multiple buyers interested…
…the seller may ask for more than the official valuation — leading to COV.
On the flip side, if demand is slow, prices may match or even dip below valuation, giving buyers a good deal.
🔍 Looking for resale reference prices? Compare with recent HDB listings before committing to any deal — it helps anchor your expectations.
Common Misconceptions About Valuation and COV
Despite how often COV comes up in resale flat conversations, many buyers still get confused by what it really is — and what it isn’t. Let’s clear the air on a few common myths that could cost you thousands if misunderstood.
“COV is set by the seller”
This is one of the most common misunderstandings.
👉 The seller does not set the COV amount.
They set the asking price. COV only exists if the agreed price exceeds the official HDB valuation.
For example:
- Seller asks for $600,000
- Buyer agrees
- HDB valuation comes in at $570,000
- COV = $30,000
If the valuation had matched the price exactly, there would be no COV at all.
📌 It’s the gap between price and valuation — not something the seller declares upfront.
“COV can be paid with CPF”
Nope — COV must be paid in cash. You cannot use:
- Your CPF Ordinary Account
- Any portion of your home loan
This is because CPF and loans are only allowed up to the HDB valuation, not the agreed resale price.
So if you don’t have enough cash savings, even a $10K COV can become a dealbreaker — or worse, a budget disaster.
💡 If you’re unsure how much you can comfortably afford, explore options with a refinance HDB loan to reduce monthly costs elsewhere.
H3: “HDB will always accept my declared resale price”
Actually, HDB doesn’t care what you’re paying — they care what the flat is worth based on market data.
That means:
- Your loan amount and CPF usage is based strictly on their valuation, not your offer price
- If your offer is way above valuation, you’ll have to top up the difference in cash (that’s your COV)
If the valuation is lower than expected, you still have to pay the agreed amount — or risk forfeiting your option fee.
Remember: only HDB’s valuation determines what’s loan-eligible — everything else is out-of-pocket cash.
Final Thoughts: Stay Smart When Dealing with Valuation and COV
HDB resale flat purchases already come with a lot of paperwork — the last thing you want is to be blindsided by Cash Over Valuation or an unexpectedly low valuation.
Here are three practical tips to help you navigate the resale process like a pro.
Always budget a buffer above valuation, just in case
Even if you’re targeting a flat that seems reasonably priced, always assume there could be a small COV involved. Whether it’s $5,000 or $30,000, having extra cash saved up will keep you from panicking when the valuation comes in lower than expected.
📌 Rule of thumb: Keep at least $10K–$20K in liquid cash ready if you’re buying in a popular area.
Get your valuation request in early to avoid surprises
Once you get the Option to Purchase (OTP), don’t delay — submit your Request for Value via MyHDBPage within 1 working day.
The faster you submit it:
- The quicker you know how much CPF or loan you can use
- The more time you have to negotiate or walk away if COV is too high
🔗 Tip: You can check your HDB loan eligibility ahead of time using our HDB home loan guide.
Work with trusted agents or brokers to avoid overpaying
Some buyers overpay simply because they don’t know how to check recent transactions or calculate financial limits. A reliable mortgage broker or experienced agent can help you:
- Compare recent resale prices
- Estimate likely valuation outcomes
- Structure your loan with minimal cash outlay
Need advice on flat valuation or financing? Get help from a trusted mortgage broker in Singapore.
Conclusion: Understanding HDB Valuation and COV Before You Commit
Whether you’re a first-time buyer or a seasoned upgrader, understanding how HDB valuation works — and how Cash Over Valuation (COV) affects your budget — is crucial to making a smart resale flat purchase in Singapore.
✅ Always base your budget on HDB’s official valuation, not just the asking price
✅ Be ready to cover any COV in full, using cash only
✅ Use available tools to check recent resale prices and estimate valuation early
Getting blindsided by a high COV can throw off your entire plan — but with the right knowledge and support, you can avoid overpaying and buy with confidence.
Need help navigating HDB valuations or planning for COV?
Speak to a trusted mortgage broker in Singapore for free advice on your flat purchase, financing options, and how to minimise out-of-pocket costs.
