Buyers new to new launches sometimes assume the payment schedule works like a resale purchase, one large sum near the start, when in fact the whole point of the scheme is to spread cash outflow across the construction period.
How the milestones are structured
The scheme begins with a booking fee and a first instalment on signing the Sale and Purchase Agreement, followed by further instalments as construction reaches defined stages, foundation work, reinforced concrete framework, brick walls, ceiling, doors and windows, car park and roads, and finally a larger instalment on the grant of Temporary Occupation Permit. A final instalment, typically the smallest, follows the issue of the Certificate of Statutory Completion. The exact percentages attached to each milestone are set out in the standard schedule in your Sale and Purchase Agreement, and you should review this schedule with your lawyer before exercising the option.
How your loan disbursement tracks the schedule
If you are financing the purchase, the bank does not disburse the full loan amount at the start. Instead, it releases funds to the developer in step with each milestone as it is achieved and certified, matching your own instalment payments. Because interest only accrues on the amount actually disbursed, your monthly interest servicing during construction typically starts small and climbs progressively as more of the loan is drawn down, only reaching the full instalment amount once the unit reaches Temporary Occupation Permit and the balance of the loan is disbursed.
Why the cash flow shape matters for planning
Because payments are staggered over what is often 3 to 4 years from launch to Temporary Occupation Permit, the scheme reduces the immediate cash burden compared with paying the full price at once, but it also means your total interest cost and cash outflow are spread unevenly across the construction period rather than fixed from day one. Buyers who plan only around the initial downpayment, without mapping out how each milestone instalment lands against their income and other commitments, sometimes find later stage instalments arrive at an inconvenient time, particularly if construction runs ahead of schedule.
Progressive Payment Scheme vs Deferred Payment Scheme
A small number of developments offer a Deferred Payment Scheme instead, which shifts a larger share of the price to a later point, sometimes close to completion, in exchange for a price premium over the standard scheme. This is far less common in the current market than the standard Progressive Payment Scheme, and where it exists, the trade off between the higher price and the deferred cash outflow needs to be weighed against your own financing plan and cost of capital.
What to check before committing
Ask your bank for a full disbursement and interest projection tied to the actual milestone schedule in your Sale and Purchase Agreement, not a generic estimate, so you know roughly what each stage will cost you in cash and in interest. It is also worth asking the developer for an indicative construction timeline, since a project that runs slower than planned draws out your progressive payments over a longer period, while a faster one compresses them.
Frequently asked questions
Do I pay the bank or the developer under the Progressive Payment Scheme?
You pay the developer at each milestone, but if you have taken a bank loan, the bank disburses the corresponding portion directly to the developer on your behalf, and you only start servicing interest on the amount actually disbursed at that point.
Is the Progressive Payment Scheme compulsory for all new launches?
It is the standard scheme for most new private residential launches sold under the Housing Developers Rules. A small number of projects offer a Deferred Payment Scheme instead, which shifts more of the payment to a later date, though these are less common and usually carry a price premium.
Does my loan interest stay the same throughout construction?
No, because you are only charged interest on the loan amount disbursed so far, your monthly interest servicing typically starts low and rises progressively as more milestones are hit and more of the loan is drawn down, before settling into the full instalment after Temporary Occupation Permit.
Trying to map out your cash flow on a new launch?
Winfred lays out your actual milestone by milestone payment and interest schedule before you commit to an option.
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.