Own a HDB Flat with $1,000 Income

Recently, Finance Minister Tharman Shanmugaratnam comment in parliament that a family with combined income of $1,000 could actually afford a small HDB flat. That created an uproar from many people, as $1,000 a month these days, could hardly pay for a basic life.

Emotions aside. Yes, it is indeed, possible to own a flat with an income of $1,000. The question is, what's the mathematics that the minister didn't explain (of course, in parliament, they don't go into the bits and pieces).

Here is the breakdown.
- New 2 room BTO flat (1 bed room) cost : $100,000
- Enhanced Additional Housing Grant : $40,000
- Special CPF Housing Grant : $20,000
- Loan needed : $40,000

The monthly installment (CPF/HDB Loan) :
- 30-year loan: $161 per month
- 25-year loan: $182 per month
- 20-year loan: $214 per month

So, actually, a family with $1,000 combined income, can actually afford to buy. Monthly installment is by CPF. As compared with RENTING from HDB, the same flat would cost $123 and $165 monthly and this amount is payable in cash.

This may free up a little more cash for such families (since installment is from CPF).