Payment Scheme

Executive Condominium Payment Scheme

The Normal Payment Scheme (NPS) and Deferred Payment Scheme (DPS) are two different financing options for purchasing Executive Condominiums (ECs) in Singapore. Here’s a detailed comparison between the two:

Normal Payment Scheme (NPS)

Payment Schedule:

• Payments are made progressively based on the construction stages of the EC.
• Typical payment stages include:
• Booking Fee (5%): Upon booking the unit.
• Signing of Sale & Purchase Agreement (15%): Within 9 weeks of booking.
• Foundation Stage (10%)
• Reinforced Concrete Framework (10%)
• Completion of Brick Walls (5%)
• Completion of Roofing/Woodwork (5%)
• Completion of Car Park, Roads, and Drains (5%)
• Notice of Vacant Possession (25%)
• Completion Date (15%)

Deferred Payment Scheme (DPS)

Payment Schedule:

• Initial Downpayment (20%):
• 5% Booking Fee
• 15% within 9 weeks of booking (upon signing the Sale & Purchase Agreement).
• Remaining 80%: Deferred until the Temporary Occupation Permit (TOP) is issued (typically 2-3 years later).

Benefits and Drawbacks

Normal Payment Scheme (NPS):

Benefits:

• More predictable payment schedule.
• Potentially lower total cost as ECs under NPS might be priced slightly lower than those under DPS.
• Gradual payment can be easier to manage for some buyers.

Drawbacks:

• Continuous payments during the construction period can be financially straining.
• Interest on the mortgage starts accruing immediately after each progressive payment.



Deferred Payment Scheme (DPS):

Benefits:

• Eases immediate financial burden with the bulk of the payment deferred.
• No interim financing needed, potentially reducing interest costs during the construction period.
• More time to secure a mortgage and manage finances.

Drawbacks:

• Potentially higher purchase price due to the deferred payment option.
• Requires financial readiness to make a significant lump sum payment at TOP.
• Limited availability as not all EC projects offer DPS.

Considerations for Buyers

Choosing between NPS and DPS depends on several factors:

1. Financial Situation:

• DPS might be preferable for those who need more time to arrange finances or who prefer to minimize immediate financial outlay.
• NPS could be better for those who can manage progressive payments without financial strain.

1. Market Conditions:

• Interest rates and loan availability can influence the decision. If interest rates are low, securing a loan earlier (under NPS) might be advantageous.

1. Project Availability:

• Not all developers offer DPS, so availability may also influence the decision.

1. Future Income Stability:

• Buyers should consider their future income prospects to ensure they can handle the lump sum payment under DPS.

In summary, the choice between the Normal Payment Scheme and the Deferred Payment Scheme involves weighing immediate cash flow needs against the total cost and payment flexibility. Each scheme offers distinct advantages, and the best option will depend on individual financial circumstances and preferences.