Buying a BTO flat in Singapore? You’ll need one crucial document before you can even apply: the HDB Flat Eligibility (HFE) letter. Whether you’re planning to use an HDB loan or comparing bank loan options, getting your loan eligibility sorted early is non-negotiable.
In this updated 2025 guide, we’ll walk you through the difference between the new HFE letter and a bank AIP, how to apply, and what financing route suits you best. You’ll also find smart budgeting tips, common pitfalls to avoid, and expert advice for every step of your BTO journey.
What Is the Difference Between HFE, AIP, and BTO Loans?
Understanding the difference between these terms will save you time — and potentially your flat.
What Is an HFE Letter and Why Do You Need It?
The HDB Flat Eligibility (HFE) letter is now the only official document from HDB that assesses:
- Your eligibility to buy a flat
- Your HDB loan eligibility
- Your housing grant eligibility
It replaces the old HLE letter. Without it, you can’t apply for a BTO flat or proceed with resale applications.Apply for your HFE before the BTO launch period opens — not after. Delays can result in missing your booking window.
How Does an AIP Differ from HFE?
If you’re not using an HDB loan, you’ll need an Approval in Principle (AIP) from a bank. An AIP assesses how much the bank is willing to lend based on your income, credit history, and debts.
| Criteria | HFE Letter (HDB) | AIP Letter (Bank) |
| Assesses | Flat, loan & grant eligibility | Bank loan eligibility only |
| Provider | HDB | Banks like DBS, OCBC |
| Required for | BTO/resale application with HDB loan | BTO/resale with bank loan |
If you’re self-employed or on variable income, banks may offer more flexibility. Consider comparing bank loan options through a mortgage broker to save time and possibly secure better rates.
What Loan Options Are Available for BTO Buyers?
| Loan Type | Interest Rate | Max Financing | Early Repayment Penalty |
| HDB Loan | 2.6% (fixed) | Up to 80% | None |
| Bank Loan | 1.6%–2.3% (avg) | Up to 75% | Yes (typically 1.5%) |
HDB loans are safer for first-time buyers, while bank loans offer lower interest but less flexibility. Use a mortgage calculator to estimate your repayments.
Step-by-Step: How to Apply for Your HFE Letter
Before you can apply for a BTO or resale flat, the HDB Flat Eligibility (HFE) letter is your first step. This single application checks if you’re eligible to buy a flat, receive grants, and take up an HDB loan. Here’s how to apply for it smoothly — and avoid common delays.
What Documents Do You Need — And What Mistakes to Avoid
To apply for HFE, prepare:
- NRICs of all applicants
- 3 months of payslips or income proof
- CPF contribution history
- IRAS NOA (for self-employed)
- Details of other property ownership (if any)
Remember not to miss out minor details like mismatched names or wrong file formats. They delay approval more than you’d think.
How to Submit Your Application Online Through My HDBPage
- Log in to My HDBPage using Singpass
- Navigate to “Apply for HFE”
- Complete the form and upload all supporting documents
- Submit and wait for email notification
Each co-applicant must complete their sections as well.
What to Expect After Submission — Timelines, Tips & Red Flags
HDB takes about 21 working days to process the HFE. You’ll receive a breakdown of:
- Whether you can buy a flat
- Loan eligibility
- Grant eligibility
Here are some red flags to watch out for: Income inconsistencies, missing CPF contributions, or recent job switches.
Applying for AIP Instead? Here’s What to Know
If you’re planning to take a bank loan instead of an HDB loan, you’ll need an Approval in Principle (AIP) from your chosen bank. This document tells you how much you can borrow — and gives you the confidence to proceed with your flat purchase. Here’s what you need to prepare, and what to watch out for.
What You’ll Need to Prepare Before Getting AIP from a Bank
- Latest 3–6 months’ payslips
- CPF contribution history
- IRAS Notice of Assessment
- Credit report and outstanding loan statements
Tip: Use a mortgage broker to apply with multiple banks in one go and compare offers.
What Happens After You Get an AIP Letter
The AIP confirms your bank loan amount, tenure, and interest rate — valid for 30–90 days. Use this to confidently book your BTO or resale flat.
What Can Go Wrong If You Skip AIP or HFE?
- You can’t book a flat without a valid HFE
- A bank may reject your loan after you’ve signed an option
- You risk losing your option fee
Always get your HFE or AIP done before committing to any property decision.
Planning Your Finances After Getting HFE or AIP
Getting your HFE or AIP letter is just the beginning — now it’s time to make sure your home purchase fits your budget. From monthly installments to upfront costs and payment strategies, smart financial planning will keep your loan affordable in the long run.
What Monthly Instalments Will You Face — And Can You Afford Them?
| Loan Type | $400K Loan (25 Years) | Monthly Repayment |
| HDB Loan | 2.6% | ~$1,630 |
| Bank Loan | 1.8% | ~$1,470 |
Use the mortgage calculator to fine-tune based on your budget.
Even if you’re approved for a high loan, borrow conservatively to leave room for rising costs or emergencies.
What Other Upfront Costs Should You Budget For?
| Cost Type | Estimated Amount |
| Option Fee | $500–$2,000 |
| Downpayment (HDB Loan) | 20% CPF |
| Downpayment (Bank Loan) | 20% CPF + 5% Cash |
| Legal Fees & Stamp Duty | Use BSD calculator |
CPF vs Cash — What’s the Smartest Way to Pay?
Use CPF for:
- Downpayment
- Legal fees
- Monthly instalments
But consider paying part of the loan in cash to retain CPF for retirement and reduce accrued interest.
After You Get Your HFE or AIP — What’s Next?
Once you’ve secured your HFE or AIP, the next steps move fast — from flat booking to signing your loan agreement. Here’s what to expect, what documents you’ll need, and how to stay on track throughout the process.
What to Do Before and After Flat Booking
- Ensure your HFE or AIP is valid
- Attend your flat booking
- Sign Agreement for Lease or bank loan Letter of Offer
- Appoint a lawyer (for bank loans)
How to Renew or Revise Your HFE If It Expires or Income Changes
HFE is valid for 6 months. Reapply early if:
- Income changes
- Household structure changes
- Booking date is near expiry
What Documents You’ll Need When Signing the Loan Agreement
- NRICs
- Income docs (again)
- HFE/AIP letter
- Option to Purchase
- CPF setup (for deductions)
HDB Loan vs Bank Loan — Which Is Right for You?
Choosing between an HDB loan and a bank loan is one of the biggest financial decisions in your BTO journey. Each comes with its own pros, cons, and long-term impact. Let’s break down the key differences to help you decide with confidence.
What Are the Key Differences in Terms and Rates?
| Feature | HDB Loan | Bank Loan |
| Rate | 2.6% fixed | 1.6%–2.3% avg |
| Repayment Flex | High | Medium–Low |
| Early Penalty | No | Yes |
Who Should Take an HDB Loan, and Who’s Better Off with a Bank Loan?
- Take an HDB loan if you want peace of mind and flexibility
- Choose a bank loan if you want to save on interest and have cash flow stability
Compare offers via a mortgage broker to save time and money.
Should You Refinance Later — And When?
After your 5-year MOP, you can refinance from HDB to a bank loan if market rates are lower.
Common Mistakes Buyers Make With HFE or AIP
Even eligible buyers can run into issues if they’re not careful with the HFE or AIP process. From delayed applications to missing documents, small missteps can lead to big setbacks. Here are the most common mistakes — and how to avoid them.
What Happens If You Delay Your Loan Application?
- You risk losing your BTO queue slot
- You may miss interest rate locks from banks
- Reapproval may be harder if income drops
What Are the Most Common Document Errors?
- CPF vs IRAS mismatch
- Missing payslips
- Wrong file format
- Inconsistent income reporting
How to Increase Approval Odds on the First Try
- Apply early
- Submit all required documents
- Keep your credit clean
- Don’t change jobs mid-process
FAQs About HFE, AIP and BTO Loans
Still unsure about how HFE, AIP, or home loan options affect your BTO journey? You’re not alone. Here are answers to some of the most frequently asked questions — so you can move forward with clarity and confidence.
Can I Switch from HDB Loan to Bank Loan Later?
Yes — but only one way. You can refinance to a bank loan, but can’t go back to HDB after that. Use a refinance calculator to check potential savings.
What If My HFE or AIP Letter Expires Right Before Booking?
You’ll need to reapply. Always track expiry dates and renew at least 2–3 weeks before flat booking.
Can I Apply for Both HFE and AIP at the Same Time?
Yes — and it’s smart if you’re still undecided. But stick with one option before signing the lease or Letter of Offer.
Conclusion: Get Loan-Ready Before Your BTO Dreams Slip Away
Getting your HFE or AIP early can make or break your homeownership plans. Don’t wait for the BTO ballot results — act now, compare wisely, and plan confidently. Need help? Let Ace Mortgage guide you through the process, match you with the best loan, and make home financing feel easy.
