Thursday, October 27, 2016

Why Online Gambling Is More Dangerous Than Going To A Casino

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

If you have friends or relatives in Singapore who are addicted to online gambling, keep them offline before they lose everything they have. Gambling is gambling, whether it’s on the internet or not, right? In reality, there’s a big difference between the two. Remember that the internet provides a dimension of convenience, which can actually make things worse for problem gamblers. If you have friends or relatives in Singapore with such an addiction, here’s why you might want to keep them offline:
 
How Does the Internet Make Online Gambling More Dangerous?
There are seven main ways the internet affects gambling:
    It reduces the sting of loss
    It makes it possible to gamble at any time
    It extends gambling time
    It removes distance barriers
    It makes it possible to play multiple games at once
    It adds further gamification elements
    It makes gambling more addictive
 
1. It Reduces the Sting of Loss
One of the reasons casinos use chips instead of cash (apart from security concerns) is that it reduces the sting of loss. When we have to physically take money and give it to someone else, there is more psychological pain. Having to do that often could deter us from further gambling. Going online creates a further level of abstraction: the gambler doesn’t have to physically handle any kind of currency, not even chips. With the pain of loss diminished, gamblers are more willing to keep gambling, even when they’ve lost huge sums.
 
2. It Makes It Possible to Gamble Anytime
With physical gambling, one needs to set a time and place to meet. The other gamblers need to be available, and there must be a banker. With online gambling, none of this is necessary – a gambler just pulls out a smartphone, and can start placing bets right away. Needless to say, this results in even more gambling.
 
3. It Extends Gambling Time
Because online gambling is 24/7, there is never a need to stop. Much like in a professional casino, there is always a game going on somewhere; at the very least, they can go to a different gambling website. Coupled with the fact that it can be done from the comfort of home, this means longer gambling hours. This creates greater opportunities to lose money, because in most forms of gambling, the longer you play the more likely you are to lose. This also has a negative lifestyle impact, in the form of fatigue from sleepless nights, and bad health from being too sedentary.
 
4. It Removes Distance Barriers
Online gambling can take place anywhere. Gamblers can place bets while they are on the bus or train, or in the comfort of their own home. There isn’t even a queue at the 4D stand to deter them anymore. This convenience encourages them to gamble even more. For games such as live Poker (it is illegal to do this online in Singapore, but it still happens), the lack of distance means there is a constant pool of players. The gambler never runs out people to gamble with.
 
5. It Makes Multiple Games Possible
If it’s buying the lottery, an online gambler is more inclined to play a wide range of lotteries, rather than just one. This can happen at a physical stand as well of course, but it is much easier to do when just tapping around on your phone. For card games, gamblers may be able to join more than one room, and take part in multiple games. That does mean a chance to lose even more cash.
 
6. It Has More Gamification Elements
Some gambling sites add perks on top of just the games. For example, there may be a cash prize for the biggest winner of the day, or free chips for anyone who logs a certain number of hours. This is an added dimension of temptation.
 
7. It Makes Gambling More Addictive
Some gambling sites send newsletters or push notifications about the next game, current first prize amount, etc. If these notifications are always popping up on a gambler’s phone or computer, it can make quitting much harder. At least with physical gambling, just staying away from a certain place or group of people is enough.
 
It’s Harder to Stop Online Gambling
Despite the Singapore government’s attempts to regulate it, people still find ways to gamble online. The internet is meant to be porous after all, so there’s only so much that can be done to censor and ban such sites. The best thing to do, if you know a gambling addict, is to take them offline for a time.
 
 

Sunday, October 23, 2016

4 Awful Money Scams Singaporeans Keep Falling For

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

If it’s too good to be true, it probably is. Protect your savings and watch out for these money scams in Singapore. We can all be thankful that Singapore is low on crime. It’s unlikely that someone will pick your pocket or rob you with a knife. But that doesn’t mean we lack criminal elements. Crooks in Singapore are simply smarter, and they know what makes us tick. Here are the common scams in Singapore today, and why smart Singaporeans fall for them.
 
Scam 1: Internet Love Scams
According to the Singapore Police Force, internet love scams have almost doubled (98.7 per cent increase) between 2015 and 2016. We’ve gone from 150 reported cases in January to June 2015, to 298 reported cases in the same period for 2016. In an Internet love scam, a stranger forges an intimate relationship with you online. They then offer promises of sex, or a visit, or ask for financial help due to personal problems. This leads to the scammer asking you to transmit money to them, often in the form of gift cards (gift cards such as Alipay cards or iTunes cards are the preferred medium, as it is harder to trace where the money goes without a bank transaction). The biggest reported loss was by a 58-year-old woman, who transferred a jaw-dropping S$1.2 million to a scammer. The scammer had convinced her he was wealthy and wanted to invest S$6.8 million in Singapore, but his funds had been “impounded” in Malaysia.
 
Why Do Singaporeans Fall For This?
Quite often, the victims do have a suspicion that they are being scammed. They willingly choose to suspend that instinct, however, on the hope that they may be wrong. This isn’t “stupid” or “weird” at all: even in real relationships, people stay on despite knowing that their partner cheats, is abusive, is not sincerely concerned about them, and so on. The victims are too emotionally invested to quit. In the case of sham prostitution (the scammer just offers sex), the victims expect clandestine transactions because such arrangements are illegal. So they don’t question the odd requests. They are also too embarrassed to ask for help later and could become blackmail targets. If they want to try and cancel the deal, for example, the scammer can simply threaten to expose them.
 
Scam 2: Online Shopping Scams
This should be a thing of the past, given the layers of security involved in online shopping (and peer reviews). The problem is, a number of Singaporeans still shop on unverified or dubious websites. The other half of the problem involves auction sites, such as eBay or Carousell. Despite the site administrators’ best efforts, scammers will always be trying to use the system. The promise of anonymity (and lack of legal consequences) is too tempting for crooks. In some cases, victims click on an ad that promises free iPads, laptops, vacation tickets, etc. for “filling in a survey”. Once they “win”, all they need to do is pay for shipping.
 
And then pay for tax.
And then they find out it’s a one-for-one deal, so while one iPad is free, they need to pay for the other one. It just keeps dragging on, payment after payment, while nothing arrives. For auction sites, it can be hard to distinguish between a true scam and a dispute. Sometimes, when items are not what they expect, it prompts the buyer to launch a police report against the seller. However, there are also outright scammers on auction sites. In May this year, a group of Singaporeans teamed up to take down rogue accounts on Carousell. Most of the scammers simply didn’t mail the goods after taking the money.
 
Why Do Singaporeans Fall For This?
For the people lured by fake ads, it is simple sunk cost fallacy. Once they have paid a few hundred dollars for two or three transactions, it seems a waste to stop paying. So they allow losses to accumulate, before they finally give up. For auction site scams, it’s because most of the time transactions are safe. This lulls the users into a false sense of security. While they may be smart online shoppers, they may still get lazy eventually, and not want to take steps like physically meeting the seller to exchange cash.
 
Scam 3: Free Algorithm Trading
Algorithmic trading is a real thing. This is when computers run applications that track price movements, and buy and sell according to programmed parameters. Large banks and funds use them all the time. Needless to say, the workings behind such an algorithm are top secret. They are money making machines, which financial institutions may spend millions to develop or buy. But you can get one for free off the internet! Just run it on your computer, and it will trade for you. This gives you the same incredible advantage that financial institutions fork out tons of money for! Obviously, it doesn’t work. The free algorithm does have a cost: the scammers that gives it to you will want a small cut of any winning trade. To use an analogy, this is like allowing someone to play jackpot with your money. Whenever they win, they take a small cut of it. Whenever they lose, it’s your money. The algorithms are often nonsensical, and do nothing but make random frequent trades. Out of 100, at least six or seven might win by luck and make the scammer some money. You, on the other hand, will probably find your account run to the ground.
 
Why Do Singaporeans Fall For This?
It sounds clever, and the victims can tell their friends they are engaged in algorithmic trading. In some cases, the victims may also be spurred on by a temporary lucky streak. To those who are not financially savvy, they may think “free” means a total lack of cost. They think that, since a cut is only taken on a win, they are “not paying anything”.
 
Scam 4: Exotic and Unregulated Investments
Recently, 20 Singaporeans just lost S$1 million in an investment scam, which involved sports betting. Earlier in the year, we heard about investments in Aquilaria trees that went sour. Go back even further, and we can see gold buyback schemes got a lot of attention. These unregulated investments are sometimes outright scams, and sometimes due to someone having a plan that doesn’t work out. Either way, it boils down to the same thing: someone wants to a run a risky business, but they want to do it with your money. Put it this way: if you want to set up a business tomorrow, it’s safer to convince investors to give you the money you need (you can also pay yourself a salary out of their funds), than to mortgage your house and start one.
 
Why Do Singaporeans Fall For This?
The first batch of investors often do get paid. Most often, a ponzi structure is used, in which money from the second batch of investors is used to pay off the first. Now because the first batch of investors sees the investment is “working”, they will attest to it and rope others in to join them. Even smart people can be drawn in, when they receive word of mouth proof from a friend or relative. As for the original investors, many will double down. If you find an investment that really does seem to work, chance are you’ll invest twice as much at the next opportunity.

Thursday, October 20, 2016

Why Is A Low Inflation Rate Bad For Singapore?

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

Simply put, low inflation means the cost of living in Singapore isn’t rising as quickly. But it also poses its own set of problems for the Singaporean economy. At SingSaver.com.sg Explains the News, we use plain English to explain what’s happening in the economy and what it means for ordinary Singaporeans. Surveys show Singaporeans are expecting a further bout of low inflation in 2016. The expectations follow on the back of a long period of falling consumer prices, with last July marking 21 consecutive months of negative inflation. What does this mean, and why is the low inflation rate in Singapore a problem?
 
What is Low Inflation?
Inflation refers to the rising cost of living. It is commonly measured in two ways. The first is to use the Consumer Price Index (CPI), which tracks the movement of prices in a basket of goods (e.g. Housing, transport, food, and so forth). The other way is to use core inflation, which excludes the cost of private housing and transport (this method reasons that Singaporeans don’t need private housing and transport). Without going into too much technical detail, inflation in Singapore has slowed. It is at the lowest point in 30 years. This means that, while our cost of living is still rising, the speed at which it rises has slowed. When it comes to inflation, think of it as a tightrope: you can’t lean too far to either side. Inflation that is too high is bad, but inflation that is too low poses its own problems, which we’ll explain in a minute. The central bank of each country (the Monetary Authority of Singapore in our case) will usually aim to achieve a given inflation rate, which is specific to the country’s needs. One way of doing this is pumping more money into the economy, or encouraging low interest rates. This targets inflation rate is usually between two to three per cent for developed countries.
 
Okay, Why is This Not a Good Thing?
The problems with low inflation are:
    It could reflect a weak economy
    Over a prolonged period, it can lead to a deflationary price spiral
    It is bad for Singaporeans who are in debt
 
1. It Could Reflect a Weak Economy
This isn’t always a direct connection, but low inflation often coincides with economic weakness. For example, notice that current low inflation goes hand in hand with a drastic slump in Singapore’s exports and manufacturing, and a recent spate of layoffs. As the economy worsens, people get nervous and they begin to spend less. They buy smaller houses, skip on the idea of buying a car, go on cheaper vacations, etc. This lack of spending means various businesses struggle to expand, or see shrinking profit margins. Now, when no one is buying anything, what’s the point of maximising factory output? Or hiring more staff? For Singaporeans who are jobless, or who are in low-income positions, low inflation is nothing to be too happy about. Sure, it means things will be a little cheaper for them; but it also means they have fewer chances of finding a well-paying job. There’s an old – and accurate – saying that when no one’s buying, no one’s hiring either.
 
2. It Can Lead to a Deflationary Price Spiral
A deflationary price spiral is an economy destroying effect, in which prices start to fall uncontrollably. It starts with everyone refusing to spend for some reason (perhaps there’s economic uncertainty). Businesses can’t make money with no customers, so they shrink or close down. This mean laying off workers. As more people get laid-off, the available purchasing power falls even more. People with no jobs can’t afford to spend; and when you see everyone losing their jobs, you might decide to hoard your money even if you are employed. This leads to even more businesses closing, and more people getting fired. At a certain point, the cost of goods will start to fall regularly. People will then be even more inclined to wait, because (1) the longer they wait, they cheaper things will get, and (2) they are too terrified of the collapsing economy to spend, even if things are cheap. Eventually, the result will be mass unemployment and poverty. Central banks have nightmares about deflation, and are very sensitive about it. This is why the Bank of Japan and European Central Bank have imposed negative interest rates: they have started to charge banks money for holding large deposits. This is to force banks to give out as many cheap loans as possible, to promote spending that gets the economy back in gear. Singapore is still far from such a position. Nonetheless, we might see our banks being encouraged to continue providing low interest loans.
 
3. It Is Bad for Singaporeans Who Are in Debt
Some amount of inflation is always good for people who are in debt. This is because the inflation rate, to some degree, offsets the interest rate on a debt. A simple example: a S$100 debt would have been a big deal in 1940, but it would be considered trivial today. That’s inflation at work. The higher inflation is, and the more money there is sloshing around in the economy (high inflation and high money supply tend to go hand-in-hand), the easier it gets to repay your debts. For people who are currently in serious debt issues, the low inflation environment doesn’t help them much.
 
What Can We Do About It?
Not much, as this is due to wider economic factors in the world (like cheap oil, for instance). Just enjoy the fact that the cost living is not going up as quickly anymore. Maybe even take that vacation now, while it’s still affordable.

Tuesday, October 18, 2016

How To Save Money On Maternity Costs In Singapore

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

Find out how government schemes and insurance can help you save money on maternity costs in Singapore, without sacrificing the quality of care. When your Facebook feed is flooded with pictures of mothers cuddling their babies, you don’t see the financial costs they have to juggle. But the moment you want to start your own family, you’ll want to know how much you need save for maternity medical costs. Will you be able to afford it? Thanks to government schemes and insurance policies, giving birth to a child in Singapore isn’t as expensive as you think. Here are some ways to save money on maternity costs.
 
1. Use Your Medisave Maternity Package
The Medisave Maternity Package (MMP) covers prenatal medical expenses such as ultrasounds, plus delivery expenses. There are a few different components to the scheme, with varying claimable amounts for prenatal expenses, hospital room stays and the actual delivery itself. Below is a table that breaks how much can be claimed from the MMP. 
 
Type of Expense
Cost
Medisave Claimable
Prenatal medical expenses
(ultrasound, tests, etc.,)
From S$800 onwards
S$900
Normal delivery at a public hospital
(Two nights in a Ward A room)
From S$3,500 onwards
S$900 (S$450/night x2)S$750 (delivery)
 
Total claimable: Up to S$1,650
Normal delivery at a private hospital
(Two nights in a 1-bed room)
From S$5,800 onwards
Caesarean delivery at a public hospital
(Three nights in a Ward A room)
From S$6,900 onwards
S$1,350 (S$450/night x3)
 
S$2,150 (delivery)
Total claimable: Up to S$3,500
Caesarean delivery at a public hospital
(Three nights in a 1-bed room)
From $8,700 onwards
 
 
2. Don’t Forget the Baby Bonus
Besides Medisave, the government also helps lower maternity and newborn costs for couples via the Baby Bonus scheme. Depending on the number of children you have, the amount of upfront cash and matching grants increase in tandem. The following table illustrates how the scheme works.
 
Birth Order
Cash Gift (inclusive of Baby Bonus Plus)
CDA Contributions
CDA First Step
Government Dollar-for-Dollar Matching
1st  and 2nd
8,000
3,000
Up to 3,000
3rd  & 4th
10,000
3,000
Up to 9,000
5th  & Beyond
10,000
3,000
Up to 15,000
 
In brief, you’ll receive an upfront cash disbursement upon the birth of your child, which you can use to cover maternity and newborn expenses. You’ll also be entitled to start a Child Development Account (CDA), a specialised account that gives you 12 years to save for your child’s future needs. The government will match the amount of money deposited in the CDA, up to a cap. Find out more about the Baby Bonus scheme here.
 
3. Get a Maternity Insurance Policy
Another way you can defray the high costs of giving birth is by getting a maternity insurance plan. Most such plans offer comprehensive coverage, so you can make a claim for pre- and post-natal hospital visits, as well as delivery charges. Getting a maternity plan will help you budget for the birth of your child, as you only pay premiums for a limited time period. As with all other insurance premiums, opt to pay on an annual or one-time basis to enjoy a slightly lower rate. Most major insurers do not offer standalone maternity care plans. Instead, they usually try to upsell you by bundling the maternity plan with another regular premium plan. If you’re planning to get life insurance for your newborn, you can try asking for lower premiums for both plans. Your insurer may offer vouchers in lieu of discounts, which you can then use to further reduce your out-of-pocket expenses. However, if you prefer to purchase a standalone plan, Pacific Prime offers several standalone maternity cover plans from third-party insurers. A quick check on their website found that the cheapest plan starts from S$792 per year for maximum annual coverage of S$800,000. It’s important to note that maternity insurance policies have waiting periods of 10 to 12 months. This means that you cannot claim any treatment costs, be it hospitalisation or delivery, during this time. Be sure to speak to a qualified insurance agent for the full picture before you sign up for a maternity plan, or any other insurance plan.
 
4. Choose a Public Hospital
It goes without saying that choosing a public hospital over a private one can cut your cost by half. Each has its pros and cons, but if cutting costs is important, then pick a public hospital for the birth of your child. Visit the MOH website to compare the costs of normal delivery and Caesarean delivery at public and private hospitals in Singapore. With government subsidies, insurance plans and the right payment method, you can realise substantial savings on your maternity costs. This frees you up to focus on your newborn, instead of worrying about the bills.

Sunday, October 16, 2016

Can A Singaporean Survive On This Portfolio?

I have a friend (Let's call him Mr Cat). Mr Cat is in his early thirties, contemplating about quitting his job and living on his portfolio. I told him that his dream is not possible unless his portfolio is generating cash flow of at least $2k per month. Mr Cat then showed me his current portfolio, which is rather impressive if I do say so myself. Mr Cat is single without the need to support his parents. He lives in a fully-paid 4-room HDB flat left behind by his late mother. His savings are meagre though.



 
Updated on 19 May 2017

A Police report was filed against Felix Leong Bao Jie

How Much Do You Need To Buy Your First Flat In Singapore?

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

We’ve simplified the 2016 prices for a BTO flat, resale flat, executive condominium, and mass-market condominiums in Singapore. If you’ve been thinking about buying a flat in Singapore, you might have felt confused and overwhelmed about the fees and costs involved. In this article, we get down to brass tacks. Here’s much you realistically need in the bank to buy your first house, and what other expenses to prepare for.
 
What are the Property Prices in Singapore for 2016?
The costs of properties can vary significantly, based on factors such as surrounding amenities and condition. There will always be the occasional neighbourhood or unit in which the price is much higher or lower than the norm. These are general estimates only:
2016 Property Prices in Singapore
 
BTO Flats (Non-Mature Districts)
BTO Flats
(Mature Districts)
Resale Flats
Executive Condominiums
Condominiums (Mass-Market)
One-Bedroom Flat
Approx. S$420,000 to S$560,000
Approx. S$600,000 to S$700,000
Two-Bedroom Flat
Approx. S$640,000 to S$720,000
Approx. S$800,000 to S$900,000
Three-Room Flat
S$150,000 to S$190,000
S$200,000 to S$300,000
S$350,000 to S$380,000
Approx.S$776,000 to S$960,000
Approx. S$970,000 to S$1.2 mn
Four-Room Flat
S$295,000 to S$350,000
S$290,000 to S$320,000
S$420,000 to S$550,000
Approx S$1.12mn to S$1.4mn
Approx. S$1.4mn to S$1.8mn
Five-Room Flat
S$390,000 to S$500,000
S$400,000 to S$550,000
S$520,000 to S$700,000
Approx S$1.6mn to S$1.76mn
Approx. S$2mn to S$2.2mn
Penthouse Unit
Usually a minimum
Usually a minimum price of S$3mn
 
Why Resale Flats are More Expensive
A resale flat costs more because home prices tend to appreciate over time. A resale flat also means there is no wait time (you may have to wait two to three years for a BTO flat to be finished). There may be more amenities built up around the flat, as it has been around longer. For resale flats, there may be a premium on top of the actual flat price. This is called the Cash Over Valuation (COV). This varies significantly in different estates, from zero COV (no premium) to large amounts like S$50,000. In extreme cases, there have been “million dollar flats” resulting from sky high COVs. The current record holder is a maisonette in Bishan, which sold for a COV of $250,000 in 2014.
 
On Condominiums and Executive Condominiums
The prices we listed above are for most mass-market condos. Prices will be significantly higher for condos close to the Orchard area, as those would be considered luxury properties. As a general guideline, a new Executive Condominium (EC) is about 20 per cent cheaper than an equivalent new condo. This price difference falls to around nine per cent after the Minimum Occupancy Period (MOP) of five years, and narrows further to five per cent afterward. In short, deduct 20 per cent off the equivalent condo price for a new EC, and nine per cent for an EC that is at the five to 10-year mark.
 
How Much Money Do You Need to Save for Your First Flat?
We can work this out in steps, using a four-room flat and a three-bedroom condo as our examples. In addition to these costs, we suggest you build an emergency fund that can cover six months of your mortgage payments, if your CPF is not already sufficient for such a provision.
 
1. At Least 5% Downpayment
If you are using an HDB Concessionary Loan, you will need to make a downpayment of 10 per cent of the purchase price or valuation, whichever is higher. The downpayment can be paid from your CPF Ordinary Account (OA), in cash, or through a combination of both. If you are using a bank loan, you will need to make a downpayment of 20 per cent of the purchase price or valuation, whichever is higher. At least five per cent of this downpayment must be in cash. Of the remaining 15 per cent, you can pay from your CPF OA, in cash, or a combination of both. Note that you must use a bank loan for ECs. Note that this total downpayment is inclusive of the Option to Purchase (OTP). The OTP is a non-refundable deposit, that must be put down two weeks before the sale of the house. This deposit is counted as part of the downpayment, once you exercise the option. For example: In the case of a three-room BTO flat with a price of S$180,000, the downpayment is S$18,000. This can be from your CPF OA, in cash, or a combination of both. In the case of a three-bedroom condo at a price of S$900,000, the downpayment is S$180,000. Of this S$180,000, at least S$45,000 must be paid in cash. The remaining S$135,000 can be paid through your CPF OA, or a combination of your CPF OA and cash. With some discipline and careful planning, you can save money for your flat’s down payment before you turn 35.
 
2. Conveyance Fees
There are legal involved, in processing the paperwork for property ownership. For new HDB flats, the cost of legal fees is calculated as follows:
First $30,000 of property value: S$0.90 per S$1,000
Next $30,000 of property value: S$0.72 per S$1,000
Remaining Amount: $0.60 per S$1,000
There is no need to calculate this manually. Just enter the price of the flat in the HDB legal fee calculator. In addition, there is a Caveat Registration Fee of S$64.45 that must be paid to the Singapore Land Authority. For our sample three-room BTO, with a price of S$180,000, the fee would be $121. Inclusive of the Caveat Registration Fee, this would be S$181.45. For bank loans, the conveyancing fees can range between S$1,100 to S$3,000. Note that this price varies between law firms, and you can request to use a cheaper law firm than the bank’s default choice. If you use a mortgage broker, they will usually try to find a cheaper law firm for you. If you use HDB’s default law firm, the conveyancing fees can be paid from your CPF. If you are using another law firm (such as one chosen by the bank), you will have to ask the firm whether fees can be paid via CPF. For our sample condo, we will assume conveyancing fees of about S$1,500.

3. Home Insurance Premiums
The basic fire insurance for HDB flats comes from Etiqa, and is not a significant cost (S$1.50 to S$7.50 for a five-year term). Basic fire insurance is mandatory. For our three-room flat, it is just S$4.50 for five years. However, you should consider comprehensive home insurance. This gives you coverage for things such as temporary accommodation and storage costs (you will need both in the event of fire), and third party coverage (if the fire is your fault and your neighbour’s house burns down, they might be able to hold you liable for damages). We strongly recommend that all homeowners get a comprehensive insurance policy. Although the risk is small, the financial damage that can ensure is devastating. Remember that you will also have to repair and refurnish the house, after any disasters. The cost differs based on the insurer, but typical rates are between S$45 to over S$700 per annum (the most expensive policies may also include accident plans, which cover you and your family in the event of an accident). Policies for private homes cost more as compared to flats. We will assume our sample three-room flat has an insurance cost of S$45 per annum, whereas our sample condo has an insurance cost of around S$200 per annum.
 
4. Renovation and Furnishing Costs
The maximum cap on most renovation loans is six months of your income, or S$30,000. We will also assume this is the general amount spent on furnishing your unit, whether you pay it all in cash or take a loan. Interest rates on renovation loans range from three to five per cent per annum, so be sure to compare between banks before buying. The typical loan tenure is between three to five years.
 
5. Maintenance Fees
These are conservancy fees in HDB estates. You will have to check the rates with your town council, but they are generally in the range of S$20 to S$90 per month for Singapore citizens (reduced rates). Non-citizens pay a normal rate, which is notably higher (check with your town council for specific details). We will assume our three-room flat has conservancy charges of S$45 per month. For condos, maintenance fees depend on the management council. These typically range from S$200 to S$350, although there are cases when fees are even higher – for high-end developments with a concierge service or elaborate facilities, it is possible to see monthly costs of S$400 or more. We will assume our sample condo has maintenance fees of S$250 per month.
 
6. Property Taxes
Property taxes are determined by your home’s Annual Value (AV). The AV is the annual amount that you would get from renting out your property (check with the Inland Revenue Authority of Singapore to determine your home’s AV). You do not need to work out the amount manually. Just use this online calculator to determine your tax rate. For our sample three-room flat, we will assume an AV of S$14,400. The tax payable would be around S$512 per annum. For our sample condo, we will assume an AV of S$36,000. The tax payable is S$2,240 per annum.
 
7. Mortgage Repayments
For HDB flats, the mortgage interest rate is always 0.1 per cent above the prevailing CPF OA rate. This is currently 2.6 per cent per annum. For private property, the mortgage rate fluctuates. However, it is has been around 1.8 per cent per annum since 2008. We will assume a 25-year loan for both our sample properties. The loan for the three-room flat is S$162,000 (after down payment), and this comes to a repayment of $735 per month for 25 years. The loan for the condo is S$882,000 (after down payment). Assuming the rate stays at around 1.8 per cent, this comes to a repayment of S$3,653 per month, over 25 years.
 
Total Cost: The initial cost of the three-room flat, taking into consideration all of the above, is around S$48,181 (including CPF funds used). The monthly cost you have to be prepared to pay is about S$827 per month, for 25 years. The initial cost of the condo would be S$211,500 (including CPF funds used). The monthly cost is about S$4,057, for the next 25 years.

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