Heard of the term “OTP” while shopping for your dream flat? Don’t worry — it’s not an SMS code.
In the property world, OTP stands for Option to Purchase. It’s the first big step in locking down your future home, whether you’re buying a BTO resale flat or upgrading to something bigger.
In this quick guide, we’ll break down:
- What the HDB OTP is all about
- How much option fees cost in 2025
- What happens after you sign it
If you’re confused about the HDB home loan process, mortgage rates in Singapore, or just want to avoid rookie mistakes — this one’s for you.
Let’s get you sorted before you sign anything.
What Is an Option to Purchase (OTP) in Singapore?
If you’re buying a flat in Singapore — whether it’s an HDB resale or private condo — you’ll come across a key step called the Option to Purchase (OTP). This legal agreement gives buyers a short exclusive window to confirm the purchase of a property, in exchange for paying a small option fee.
Understanding how the OTP works can help you avoid costly mistakes and make smarter decisions, especially if you’re applying for a home loan in Singapore or comparing mortgage rates.
What does OTP mean and why is it needed when buying property?
The Option to Purchase (OTP) is a legal contract that gives you the exclusive right — but not the obligation — to buy a specific property within a fixed time frame. In return, you pay a small option fee (non-refundable if you back out).
Here’s why it matters: once the seller issues you the OTP, they can’t entertain other buyers. It protects your claim while you finalise your housing loan, check CPF usage, and confirm your finances.
💡 Expert tip: Before collecting any OTP, use a mortgage loan repayment calculator to check what monthly payments you can actually afford — especially with home loan interest rates in Singapore rising.
How does OTP differ between HDB and private properties?
While both HDB and private property buyers use an OTP to secure their purchase, the process, fees, and legal terms are not the same. Understanding these distinctions helps avoid confusion.
HDB OTP vs Private Property OTP in Singapore (2025)
| Feature | HDB OTP | Private Property OTP |
|---|---|---|
| Option Validity Period | 21 calendar days | 14 calendar days (usually) |
| Option Fee | $1 to $1,000 | Typically 1% of purchase price |
| Form Used | HDB-prescribed OTP form only | Custom agent/lawyer-drafted OTP |
| Submission Process | Through HDB Resale Portal | Handled by law firm/agent |
| Exercising the OTP | Submit intent online and pay deposit | Engage law firm to exercise & pay |
📌 Note: For HDB flats, the official OTP form must be used — no custom edits allowed.
What happens once the OTP is issued to the buyer?
Once the seller grants you the OTP, here’s what happens:
- You pay the option fee to the seller (this amount depends on whether it’s HDB or private).
- You enter the “option period” — 21 days for HDB — to confirm your decision.
- During this time, you should:
- Lock in your housing loan interest rate in Singapore
- Use your CPF savings calculation for upfront payment
- Budget for stamp duties using a BSD calculator
- Lock in your housing loan interest rate in Singapore
If you decide to proceed, you’ll exercise the OTP by signing and paying the required deposit — which makes the transaction legally binding.
✍️ Pro tip: Don’t feel pressured to sign immediately. It’s smarter to secure a good mortgage loan in Singapore first, then commit confidently.
How the HDB Option to Purchase Process Works (Step-by-Step)
Once you’ve agreed on the flat and price with the seller, the HDB OTP process officially begins. This is where things start to get real — and timelines matter.
From collecting the OTP form to finally exercising it, there are a few critical steps you must follow to avoid delays, penalties, or even losing your dream unit.
What are the key steps from OTP to exercising it?
Here’s how the Option to Purchase for HDB resale flats works in sequence:
- Seller grants the OTP — using the official HDB-prescribed form.
- Buyer pays the option fee — usually between $1 to $1,000.
- Option period begins — you have 21 calendar days to decide.
- Buyer exercises the OTP — by signing the form and paying the option exercise fee.
- Submit the resale application — through the HDB Resale Portal.
You’ll also need to finalise your HDB home loan application (or bank loan) during this time. This is critical — because if you miss the deadline, the OTP expires and your option fee is forfeited.
🧠 Quick reminder: The OTP must be exercised before it expires, not on the last minute.
How to fill and submit the HDB OTP form correctly in 2025?
The HDB OTP form is a fixed-format document that you must use — it can’t be edited or replaced. You’ll receive it directly from the seller (or agent), and it includes:
- Flat details & address
- Agreed sale price
- Option fee amount
- Validity period
- Signatures of both buyer and seller
After exercising the OTP, both parties must submit the resale application within 7 calendar days.
Expert Tip Box: CPF Usage & HDB Submission Deadlines
| Item | Action | Deadline |
|---|---|---|
| CPF Usage | Apply to use CPF for stamp duties or downpayment | During option period |
| OTP Exercise | Buyer signs and pays exercise fee | By Day 21 (inclusive) |
| HDB Resale Submission | Both buyer and seller must apply | Within 7 days after exercise |
📌 You’ll also need your HLE letter or bank loan approval-in-principle ready before exercising the OTP, especially if you’re using a bank loan for HDB.
What’s the current OTP validity period for HDB flats?
As of 2025, the HDB OTP validity period is fixed at 21 calendar days. That means if the seller issues the OTP on 1 July, it must be exercised on or before 21 July.
There are no extensions allowed, and if you miss this window, the OTP expires and your option fee is gone.
🛎️ Buyer tip: Always mark your deadline clearly. Even one day late = you’ll need to start all over again.
HDB Option Fee in 2025 — How Much and When to Pay
The option fee is the first payment you’ll make when securing an HDB resale flat. It’s not a huge amount compared to the full downpayment — but it’s a critical commitment. Pay it, and the flat is reserved for you during the OTP period. Miss the deadline, and that money might be gone.
Understanding how much to pay, when to pay it, and how it compares to private property helps you make smarter, safer choices — especially with so many buyers rushing into deals without checking their home loan eligibility.
How much is the option fee for HDB resale flats today?
As of 2025, the HDB option fee must be between $1 and $1,000. It’s negotiable between the buyer and seller — but must fall within that official range set by HDB.
💡Most buyers offer between $500 to $1,000 for resale flats, depending on the location and demand. A higher option fee can signal stronger intent to the seller, which may help secure a competitive unit.
When is the option fee paid — and is it refundable?
You’ll pay the option fee upfront the moment the seller issues the OTP. This usually happens in-person at the first flat viewing agreement or agent meeting.
If you later decide not to exercise the OTP, the option fee is non-refundable. That’s why it’s so important to secure your HDB loan approval or bank mortgage before collecting the OTP.
However, once you exercise the OTP, the option fee will go toward the overall purchase price — it’s not an extra cost.
❗ Buyer tip: Never hand over more than $1,000 for the HDB OTP — even if pressured. That’s the official cap.
How does HDB option fee differ from private property?
While the concept is similar, the option fee for private properties works very differently. It’s not just a symbolic sum — it’s a percentage of the entire price.
Option Fee Comparison: HDB vs Private Property (2025)
| Feature | HDB Resale Flat | Private Property |
|---|---|---|
| Option Fee Range | $1 to $1,000 (fixed range) | 1% of purchase price |
| Legal Cap | Yes – cannot exceed $1,000 | No – depends on agreed sale price |
| When Paid | Upon OTP issuance | Upon OTP issuance |
| Refundable? | No, if buyer backs out | No, if buyer backs out |
| Applied to Final Price? | Yes | Yes |
📌 For private properties, this can mean paying $15,000–$30,000 upfront on a $1.5M condo. That’s a lot more risk if you’re still unsure about your mortgage loan approval.
What Happens After Receiving the OTP?
Once you’ve received the HDB Option to Purchase (OTP), the countdown begins. You now have a fixed window — 21 days — to decide whether to go ahead with the flat purchase.
During this option period, you’re expected to finalise your financing, prepare documents, and get ready to exercise the OTP. If you miss this window, your chance (and your option fee) disappears.
Here’s what happens next.
What must buyers do to “exercise” the OTP?
To exercise the OTP, you must:
- Sign the OTP form (on the buyer’s portion)
- Pay the option exercise fee to the seller (this can be up to $4,000)
- Submit your resale application via the HDB Resale Portal
Keep in mind that the total deposit paid — the option fee and exercise fee — must not exceed $5,000. For example, if you paid $1,000 for the OTP, your exercise fee can be a max of $4,000.
🧠 Expert tip: Secure your home loan approval before exercising. This is a binding commitment — not just paperwork.
What documents are needed when exercising the OTP?
Before you can submit the resale application, have these documents and details ready:
- A valid HLE letter (if using HDB loan) or bank approval letter (for bank loans)
- Completed and signed HDB OTP form
- NRIC copies of all buyers
- CPF withdrawal plans (if applicable)
- Any supporting documents for grants or family nucleus eligibility
You’ll need to upload these into the HDB portal during submission. If you’re unsure about CPF usage or financing, tools like this mortgage loan calculator can help you estimate what’s realistic.
What happens if you miss the deadline to exercise?
If you don’t exercise the OTP within 21 days, the OTP automatically expires — and here’s what happens:
- Your option fee is forfeited (yes, even if it’s $1,000)
- The seller is free to offer the flat to someone else
- You’ll have to restart the flat-search and negotiation process from scratch
⚠️ Real talk: This is more common than you think — especially when buyers underestimate loan processing time. Don’t wait until the last day to act.
How to Download the Official HDB OTP Form
Before you can “chope” your HDB resale flat, you’ll need the official Option to Purchase (OTP) form — no shortcuts, no custom edits. HDB requires all resale transactions to use its prescribed OTP format, or the application will be rejected.
Let’s walk through where to get it, how to handle it, and what to double-check before submission.
Where is the HDB OTP form available online?
You can download the official HDB OTP form directly from HDB’s website:
👉 Download the HDB Option to Purchase (OTP) form
It’s typically under the “Buying a Resale Flat > Step-by-step Guide” section.
🧠 Pro tip: Bookmark the page — you’ll need this form again if you restart negotiations or make changes.
Can you submit a digital version, or must it be printed?
The OTP form must be printed and physically signed by both buyer and seller. HDB does not accept digital signatures or PDF markups for resale flats.
Once it’s signed:
- You can scan and upload the signed version to the HDB Resale Portal during your resale application.
- Keep the original copy — HDB may request to view it physically later during appointments.
✍️ Don’t sign on behalf of anyone else (even family). Everyone listed must sign with their own hand.
What to check before handing over the signed form?
Before you pass the signed OTP to the seller (or upload it to HDB), check these details carefully:
- 🏠 Flat address and unit number — no typos
- 💲 Agreed sale price — matches verbal agreement
- 📅 Option grant date — this starts your 21-day countdown
- 💸 Option fee amount — ensure it’s within the legal $1–$1,000 range
- ✍️ Signatures of all buyers and sellers
Any errors could delay your application or even void the OTP — which means starting over.
📌 Quick check: Snap a photo of the completed OTP before handing it over, just in case you need to cross-reference later.
Legal Rights & Responsibilities After Signing the OTP
Once the HDB Option to Purchase (OTP) is signed, both you and the seller enter into a legally binding agreement — but with specific terms and protections. While it’s not yet a full sale contract, it carries real legal weight under Singapore property law.
Here’s what you need to know about your rights, the seller’s obligations, and what happens if things go off track.
Is the OTP legally binding in Singapore?
Yes, the OTP is legally enforceable once signed by both parties.
For the buyer, this means:
- You have the exclusive right to purchase the flat for 21 days.
- The seller cannot offer the unit to anyone else during this period.
However, you’re not obligated to exercise the OTP — it gives you the option, not the duty, to complete the purchase. The catch? You lose the option fee if you walk away.
For the seller, they are bound to hold the unit exclusively for you and honour the agreed sale price.
Can the seller withdraw after issuing OTP?
No — once the seller issues the OTP and collects your option fee, they are legally required to reserve the flat for you for the full 21-day period.
They cannot back out or change the agreed price during this time.
⚠️ If a seller tries to withdraw early or re-sell to someone else, you may have grounds to file a complaint with HDB or take legal action.
What are your rights if the deal falls through?
If the deal fails before you exercise the OTP, you can walk away — but you forfeit the option fee.
If the deal falls through after you’ve exercised the OTP, it gets more serious. This could happen if:
- Your loan gets rejected and you can’t pay the deposit
- The seller delays resale submission beyond 7 days
- There’s a failure to meet HDB eligibility conditions
In most cases, HDB will step in to mediate. But if either party clearly breaches the terms, legal recourse (and possible forfeiture of funds) may follow.
Buyer vs Seller Rights After Signing HDB OTP (2025)
| Party | During 21-Day Option Period | After OTP Is Exercised |
|---|---|---|
| Buyer | Right to buy at agreed price; can walk away (lose fee) | Must proceed with resale submission or risk legal action |
| Seller | Must reserve unit; cannot accept other offers | Must submit resale application within 7 days or risk default |
| Both | Must not alter terms or sign other OTPs | Bound by HDB resale procedures and timelines |
💡 Always document key timelines and agreements. Screenshot your signed OTP and confirm resale application submission via the HDB portal.
What If You Want to Cancel After Signing the OTP?
Life happens — sometimes, even after signing the Option to Purchase (OTP), circumstances change. Maybe your loan didn’t go through, your CPF isn’t enough, or you simply had second thoughts.
So… can you back out? And if yes, what’s the cost?
Let’s break down your options (and consequences) clearly.
Can the buyer legally back out of the OTP agreement?
Yes, you can back out before exercising the OTP — but it comes at a price.
In the case of HDB resale flats, you’re under no legal obligation to go through with the deal until you officially exercise the OTP. That means if you change your mind during the 21-day option period, you can walk away.
However, once you’ve exercised the OTP, the commitment becomes legally binding — and withdrawing at that point becomes much more complicated (and financially painful).
⚠️ If you’ve already exercised, backing out could expose you to legal action by the seller or rejection of future HDB applications.
Will the option fee be forfeited or partially refunded?
If you choose not to proceed, your option fee is forfeited — no refunds, even if your reason feels valid.
This is stated clearly in the OTP form itself and is non-negotiable under HDB rules.
What Happens to Your HDB Option Fee if You Cancel the OTP (2025)
| Scenario | Option Fee Outcome |
|---|---|
| Backed out before exercising OTP | ❌ Forfeited |
| Backed out after exercising OTP | ❌ At risk of further penalties |
| Seller cancels the deal unlawfully | ✅ Buyer may claim refund or damages |
💡 Pro tip: This is why it’s crucial to secure loan approval before collecting the OTP — not after.
Are there legit reasons accepted by HDB for withdrawal?
HDB may consider certain exceptional situations where withdrawal is allowed without heavy penalty — but these are rare and must be well-supported.
Legit reasons may include:
- Sudden job loss or retrenchment
- Medical emergencies with documentation
- Buyer passes away before exercise
- Fraud or misrepresentation by seller
Even then, you’ll need to write in to HDB with proper proof — and there’s no guarantee of getting your option fee back.
📌 Bottom line: Unless there’s a major crisis, assume your option fee is non-refundable once the OTP is issued.
🚨 Real Scenario: “I lost my job after collecting the OTP — what now?”
If you collected the OTP and lost your job before exercising it, you technically have the right to walk away — but you’ll lose the option fee.
If you’ve already exercised the OTP, it becomes trickier. HDB may allow a withdrawal only if you can’t secure a home loan, even after trying multiple banks. You’ll need to provide:
- Loan rejection letters from at least 2 financial institutions
- Explanation letter to HDB detailing your change in circumstances
🛑 Important: Always speak to a mortgage broker in Singapore before signing the OTP — they can help assess your risk of rejection and avoid this situation entirely.
Pro Tips Before You Sign the OTP
Before you hand over that option fee and lock in the unit, it’s worth slowing down and doing one final check. At this stage, rushing can cost you — especially if you haven’t confirmed financing or missed a small legal detail.
H3: What should you double-check before paying the option fee?
Here’s your last-minute sanity checklist before accepting the OTP:
- ✅ Is your HDB HLE letter or bank loan pre-approval ready?
- ✅ Do you have enough CPF and cash to cover downpayment and stamp duties?
- ✅ Have you verified the flat details and valuation?
- ✅ Did you read the option fee amount, validity period, and seller terms carefully?
- ✅ Are you aware of the option expiry date — and confident you can act in time?
If you hesitated at any of those, it’s better to pause and ask for advice before putting money down.
FAQs About Option to Purchase (HDB + Private)
Still have burning questions about the OTP process? Here are quick answers to some of the most common queries we get from buyers — whether you’re purchasing an HDB resale, BTO flat, or private condo.
Do BTO buyers need an OTP too?
No — BTO buyers do not use an OTP the way resale or private property buyers do.
Instead, HDB issues an Agreement for Lease once your flat is ready to be booked. That document serves a similar purpose: it confirms your intent to buy and outlines the payment schedule. But there’s no option fee or 21-day holding period like in resale transactions.
So if you’re applying for a BTO flat with HDB housing grants, you won’t need to worry about the OTP process.
Can foreigners or PRs use OTP to buy property in Singapore?
Yes — foreigners and PRs can use an OTP, but only if they’re eligible to purchase the property in question.
- PRs can buy HDB resale flats, but only after meeting the 3-year minimum stay requirement.
- Foreigners cannot buy HDB flats, but they can purchase private condos and must also go through the OTP process.
- Mixed-nationality couples (e.g. Singaporean + PR or foreigner) may have additional restrictions — and should consult a mortgage advisor before proceeding.
The OTP document and process are still valid regardless of nationality — but eligibility rules vary widely.
What happens if your loan gets rejected after signing OTP?
If your housing loan gets rejected after you’ve signed the OTP, things can get stressful fast.
Here’s what could happen:
- If you haven’t exercised the OTP yet: You can choose not to proceed, but your option fee will be forfeited.
- If you’ve already exercised the OTP: You’re legally committed, and the seller may take action if you fail to complete the transaction.
To avoid this, make sure you’ve secured either an HLE letter from HDB or a bank approval-in-principle (AIP) before even thinking about collecting the OTP.
🔍 Need help checking your loan eligibility? Use this mortgage loan repayment calculator before making any commitments.
Summary: What You Need to Know About the HDB Option to Purchase (OTP)
Buying a flat in Singapore? The Option to Purchase (OTP) is one of the most important legal steps — especially if you’re purchasing an HDB resale flat or private property.
Here’s a quick recap of what you should remember:
- ✅ The OTP gives you the exclusive right to buy a flat for 21 days (HDB) or 14 days (private).
- ✅ You’ll pay a non-refundable option fee — $1 to $1,000 for HDB, or 1% for private property.
- ✅ To proceed, you must exercise the OTP within the option period, submit your resale application, and finalise your home loan in Singapore.
- ❌ If you back out, the option fee is forfeited — and if you’ve exercised, the risks are even higher.
- 📄 Always download and use the official HDB OTP form and follow proper deadlines.
- 🧠 Before signing, make sure your loan is pre-approved and your finances are solid — or speak to a Singapore mortgage broker for no-obligation advice.
Need expert help?
Before signing anything, you can talk to a Singapore mortgage broker for free, no-pressure advice. They’ll help you assess your loan eligibility, interest rates, and whether you’re really ready to commit.
