When buying a New Launch BUC (Building Under Construction) unit in Singapore, buyers usually do not pay the full purchase price upfront. Instead, they make payments in stages according to the project’s construction progress. This is commonly known as the Progressive Payment Scheme (PPS).
Understanding the Progressive Payment Schedule can help buyers plan their cash, CPF and bank loan requirements in advance and avoid cash-flow pressure during construction.

1. What Is a Progressive Payment Schedule?

A Progressive Payment Schedule sets out how a buyer pays for a condo in stages, based on the project’s actual construction progress and the payment percentages agreed in the contract.
The usual process is:
Construction milestone completed → Developer issues a payment notice → Buyer pays the amount due → Bank releases the relevant loan amount
Therefore, payment for a new launch condo is not usually made all at once. It is made progressively as the project reaches the specified construction milestones.

2. How Does Progressive Payment Work?

After signing the Sale and Purchase Agreement (S&P), the buyer must make payments according to the construction milestones and payment schedule set out in the contract.
When a specified construction milestone is completed, the developer will generally issue a payment notice requiring the buyer to pay the corresponding amount.
If the buyer takes a bank loan, the bank will generally disburse the loan progressively as payments become due, rather than releasing the full loan at the beginning of the purchase.
The buyer’s funds may therefore come from:
• Cash: To pay the required cash portion of the down payment and other cash expenses
• CPF: May be used to pay for the property, subject to applicable CPF rules
• Bank loan: Drawn down progressively in line with the construction and payment milestones

3. Progressive Payment Schedule: When Are Payments Made?

The exact payment percentages and timing may vary by project. The following is a common illustrative example for a purchase with a 75% loan:



The table is illustrative. The payment stages, percentages and permitted funding arrangements must be checked against the project’s S&P and the buyer’s CPF and loan arrangements.

4. How Do Cash, CPF and Bank Loans Work Together?

When buying a condo, buyers generally need to plan for the combined use of cash, CPF and a bank loan.
In general:
Cash and/or CPF → May be used for the down payment, stamp duty and legal fees, subject to applicable rules
Bank loan → Drawn down progressively according to the loan amount and payment schedule
Buyers should calculate not only the amount needed at the time of purchase, but also the payments and loan interest that may fall due at each stage over the following years.

5. Do Buyers Pay Loan Interest During Construction?

The bank loan is generally not drawn down in full at the beginning of the purchase.
For example, if the buyer has a bank loan and only part of the project has been completed, the bank may have released only part of the loan to meet payments due at that stage.
During construction, interest is generally charged on the loan amount already drawn down. As construction progresses and the bank releases more of the loan, the outstanding loan balance and interest costs generally increase. This is one of the costs buyers should factor into their plans when purchasing a new launch condo.

6. When Does the Buyer Start Paying the Full Mortgage?

Progressive payments do not mean that the buyer starts paying the full mortgage from the first day of the purchase.
During construction:
Construction progresses → Bank draws down the loan in stages → Buyer pays interest on the loan amount already drawn down
As the project approaches TOP and completion, a greater portion of the loan may have been drawn down.
After the project is completed and the relevant statutory completion requirements are met, the buyer moves into the regular full mortgage repayment stage. The precise timing and repayment arrangements depend on the loan terms and the transaction.

7. How Should Buyers Plan for Progressive Payments?

Before buying a new launch condo, buyers should work through the following figures:
1). Total purchase price
Confirm the total purchase price of the new condo.
2). Initial payment
Calculate the cash and CPF required at the signing stage.
3). Bank loan amount
Confirm the expected loan-to-value ratio and whether the buyer qualifies for the required loan amount.
4). Future payment schedule
Use the project’s payment schedule and expected construction timeline to estimate the amount due at each stage.
5). Additional costs
In addition to the purchase price, budget for:
• Buyer’s Stamp Duty (BSD)
• Additional Buyer’s Stamp Duty (ABSD), if applicable
• Legal fees
• Mortgage payments and interest
• Renovation costs
• Maintenance fees
• Property tax
The key is to plan for the amount required at each stage over the coming years, rather than focusing only on the amount due at the time of purchase.

8. Five Common Mistakes Buyers Should Avoid

1). Focusing only on the initial payment
The initial payment is only part of the purchase cost. Buyers also need to plan for subsequent progressive payments.
2). Overlooking loan interest during construction
As the bank loan is progressively drawn down, interest costs may also increase.
3). Ignoring stamp duties and other additional costs
BSD, ABSD where applicable, legal fees and other expenses should all be included in the financial plan.
4). Assuming the bank will release the entire loan upfront
For a new launch condo, the bank loan is generally drawn down progressively according to the construction and payment schedule, rather than released in full at the beginning.
5). Not checking the project’s actual payment terms
Payment arrangements may differ between projects. Buyers should refer to their own SPA and the developer’s payment notices, rather than relying entirely on another project’s payment schedule when budgeting.

9. Frequently Asked Questions

Q1: Do all condos use Progressive Payments?
Uncompleted condos generally use a payment structure linked to construction progress. The specific payment arrangements and milestones should be confirmed in the project’s contractual documents.
Q2: Who receives the Progressive Payments?
The developer generally issues payment notices according to the contract and construction progress. Buyers should make payment as instructed, to the project’s designated bank account. If the buyer has a bank loan, the bank will disburse the relevant loan amount according to the financing arrangements.
Q3: Does buying a new launch condo mean that buyers do not need to make payments for the first few years?
No. Buyers usually need to make the initial payment first, followed by further payments as construction progresses. If a bank loan is used, buyers should also budget for the interest or repayments arising from the loan amount already drawn down.
Q4: Are the payment percentages the same for every condo?
Under the standard Progressive Payment Schedule, the payment percentage for each construction stage is generally fixed. However, the amount and timing of payments due may differ depending on the project’s construction progress when the buyer purchases the property. Buyers should refer to the project’s S&P and payment notices.
Q5: Can CPF be used for Progressive Payments?
CPF may be used to pay eligible property-related costs, subject to CPF rules. The amount available depends on the buyer’s CPF account balance and individual circumstances.

Conclusion

When buying an uncompleted new launch condo in Singapore, understanding the Progressive Payment Schedule is essential.
The key is not just to ask, “How much do I need to pay now?” Buyers should also understand:
When each payment is due → How much is payable at each stage → How cash, CPF and the bank loan work together → How much interest or loan repayment may be due during construction
Planning ahead can help buyers estimate their funding needs more accurately and reduce cash-flow pressure during construction and after the property is completed.