Rates and thresholds change. The current figures are kept in one place: the Singapore property rules reference.
Every resale purchase in Singapore, HDB or private, involves two separate numbers once an Option to Purchase is on the table: what you agreed to pay, and what an independent valuer says the unit is worth. When the first number is higher than the second, that gap has a name, and it changes how much cash you need to bring to the table.
How the valuation and the price come apart
A bank valuation, done by a panel valuer the bank appoints, or an HDB valuation for a flat, is an independent professional estimate of market worth, based on recent comparable transactions, condition, and location. The purchase price is whatever buyer and seller privately agree to during negotiation. In a competitive market, especially for a unit with few comparable transactions or unusual appeal, sellers can ask for and get a price above what a valuer would independently support. That difference is cash over valuation.
Why it must be paid in cash
Your loan quantum, up to the standard 75% loan to value ratio on a first housing loan, is calculated against the lower of valuation or price. Your CPF withdrawal for the purchase works the same way, capped by the valuation limit. So if you agree to pay $1.05 million for a unit valued at $1 million, your loan and CPF are both computed off the $1 million figure, and you must fund the remaining $50,000 gap yourself, in cash, separate from your other minimum cash requirements. There is no mechanism to borrow or use CPF for the amount above valuation.
Does this still apply to HDB resale flats?
Yes, functionally, even though HDB stopped publishing a formal COV figure in the resale price framework some years back. HDB resale prices are negotiated directly between buyer and seller with no price ceiling, and HDB still commissions its own valuation once an OTP is granted. If your agreed price is above that valuation, the same cash rule applies, the difference cannot be financed through a bank loan or the HDB loan, and cannot be drawn from CPF.
What commonly goes wrong
Buyers sometimes agree to a price under pressure during a hot market or a bidding situation without first getting a sense of where valuation is likely to land, then discover the cash gap only after the OTP is granted, when they are already committed and the option fee is on the line. Because valuation is only confirmed after the OTP is exercised, not before, there is always some uncertainty, but a panel valuer or your bank's mortgage team can often give an informal indicative range before you commit.
What to check before you commit
- Ask your bank or mortgage broker for an indicative valuation range on the specific unit before signing the OTP, not after.
- Confirm you actually have the cash on hand to cover a likely gap, on top of your minimum cash down payment, stamp duty, and legal costs.
- Look at recent comparable transactions yourself, a large, unexplained gap between asking price and recent sales in the same block or project is worth questioning before you pay the option fee.
- Remember the option fee itself is non refundable if you decide the cash gap is too large to proceed once valuation comes back.
Frequently asked questions
Can I use CPF or my loan to cover cash over valuation?
No. Both the bank loan and any CPF withdrawal are computed against the valuation, or the price, whichever is lower. Any amount above the valuation must be settled in cash, it cannot be financed.
Does cash over valuation still apply to HDB resale flats?
Yes, in practice. HDB resale prices are negotiated freely between buyer and seller, and if the agreed price is higher than HDB's valuation, that gap works the same way, cash out of pocket, even though HDB no longer publishes a formal COV figure as it once did before 2014.
Is a high cash over valuation a red flag?
A large gap is worth questioning, since it means you are paying meaningfully more than an independent valuer thinks the property is worth. It is not automatically wrong, strong locations and low supply can justify it, but it raises your resale risk if the market softens.
Not sure what a unit will value at?
Winfred checks likely valuation against comparable transactions before you commit to a price, so cash over valuation is never a surprise after the OTP is signed.
Book a free 30 minute callWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Rates and rules reflect the position as at 9 Aug 2026; verify current figures with IRAS, HDB, or MAS before making any decision.