Deferred Payment Scheme vs Progressive Payment: Which Suits You?
How a Deferred Payment Scheme (DPS) differs from the Normal Payment Scheme, who DPS tends to suit, why it is usually priced higher, and a clearly hypothetical side-by-side comparison.
When you buy a new launch in Singapore, the price is only half of the decision. How and when you pay it shapes your cash flow for years. Most buyers pay under the Normal Payment Scheme, also called progressive payment. Some developers also offer a Deferred Payment Scheme (DPS), which pushes most of the payment to completion. This guide compares the two, explains who DPS tends to suit and why it usually costs more, and works through a clearly hypothetical example. It is written for buyers watching LinkTown Residences (Hougang Central Residences), the upcoming private condo at the Hougang Central integrated development.
How the Normal Payment Scheme works
Under the Normal Payment Scheme (NPS), you pay in stages tied to construction milestones:
| Stage | % of price |
|---|---|
| Booking (Option to Purchase) | 5% |
| Sale and Purchase Agreement (about 8 weeks) | 15% |
| Foundation | 10% |
| Reinforced concrete frame | 10% |
| Partition walls | 5% |
| Roofing | 5% |
| Doors, windows, wiring, plumbing | 5% |
| Car park, roads, drains | 5% |
| TOP | 25% |
| CSC | 15% |
After your down payment, the bank disburses the loan stage by stage, and you pay interest only on what has been drawn. Instalments therefore start small and grow as the building rises. Our progressive payment guide works through NPS in detail.
How a Deferred Payment Scheme works
Under a DPS, you pay a portion upfront and defer the bulk until TOP. The exact split is set by the developer and varies. A structure you might see is roughly 20% paid in the early weeks and the balance at TOP, but some schemes stage the deferred portion differently.
The key difference: with most of the price due only at completion, your home loan is typically drawn much later. That means little or no loan interest during construction, and more time before you need the bulk of the money.
Not all developers offer DPS, and when they do it may apply only to certain units or be available for a limited period. Treat it as a feature to ask about, not an expectation.
Why DPS is usually priced higher
A developer financing a project over several years benefits from receiving money as construction progresses. Under DPS, most of that money arrives later, so the developer carries more of the funding cost and risk. That is usually reflected in a higher price for the same unit under DPS than under NPS.
A higher price has knock-on effects:
- Higher stamp duty, because BSD and any ABSD are calculated on the price.
- A higher loan amount, if you borrow the same proportion.
- Valuation risk. Banks lend on the lower of price or valuation. If the DPS price sits above what the bank values the unit at, you pay the gap in cash. See our bank valuation guide.
A hypothetical side-by-side comparison
The example below is hypothetical. It assumes a unit priced at S$1,700,000 under NPS and a DPS price 3% higher, with 20% paid upfront under DPS. These are assumptions for illustration, not LinkTown Residences terms.
| Normal Payment Scheme | Deferred Payment Scheme (hypothetical) | |
|---|---|---|
| Purchase price | S$1,700,000 | S$1,751,000 |
| Price difference | – | +S$51,000 |
| BSD (Singapore Citizen, first home) | S$54,600 | S$57,150 |
| Paid in the first few weeks | S$340,000 (20%) | S$350,200 (20%) |
| Paid during construction | Progressive, from foundation onwards | Little or none |
| Due at TOP and after | 40% (25% TOP + 15% CSC) = S$680,000 | 80% = S$1,400,800 |
Hypothetical figures. DPS premium, upfront percentage and timing vary by developer. BSD computed on the published tiers; verify with IRAS. Not an offer or LinkTown Residences pricing.
In this example, DPS costs S$51,000 more in price plus S$2,550 more in BSD, a total of S$53,550.
What might it save? Under NPS, you would pay interest on the loan as it is drawn during construction. As a purely illustrative assumption, if the drawn loan averaged S$500,000 over three years at 3% a year, interest would be about S$45,000. On those assumptions the two schemes cost roughly the same, and the answer would swing with the actual premium, interest rates and build time. Run your own numbers with the loan calculator.
Who DPS tends to suit
HDB upgraders timing a sale
This is the classic case. Many upgraders want to keep living in their flat while the condo is built, then sell near completion. Under NPS, they may be servicing a growing home loan while still paying for the HDB flat. DPS can shift most of that burden to around TOP, closer to when the flat is sold.
Two rules still bite. First, an HDB owner who buys a private property is generally subject to ABSD at the second-property rate, paid upfront; married couples with at least one Singapore Citizen may claim a refund if they sell the first home within the IRAS time limit (for an uncompleted purchase, generally six months after TOP or CSC, whichever is earlier). Second, HDB’s own rules, such as the minimum occupation period, apply. Our HDB upgrader guide covers the sequencing.
Buyers expecting a lump sum
Someone expecting proceeds from another sale, a maturing investment or an inheritance around the TOP date may find DPS matches their timeline better.
Who it may not suit
- Buyers who plan to sell before or soon after TOP. A higher entry price raises the bar for any gain, and Seller’s Stamp Duty applies within the holding period.
- Buyers stretching their budget. DPS defers the payment but does not reduce it. A large sum still falls due at TOP, and loan eligibility is assessed against your circumstances at that point.
- Buyers sensitive to valuation risk. The price premium increases the chance of a valuation shortfall.
Questions to ask at the preview
- Is any scheme other than NPS offered, and for which units?
- What is the price difference versus NPS for the same unit?
- Exactly what percentage is due when, and on what milestones?
- Will my bank lend on the DPS price, and when will the loan be assessed?
Get the answers in writing, ideally in the sales documents, and ask your lawyer to confirm how the schedule appears in the Sale and Purchase Agreement before you exercise the option. Also check our home loan guide for how TDSR and LTV limits apply either way.
If you would like to know whether alternative payment schemes are offered once LinkTown Residences releases its sales terms, register your interest.
Payment schemes for LinkTown Residences have not been announced; DPS may not be offered. All comparison figures are hypothetical. Stamp duty, ABSD refund and loan rules as published; verify with IRAS, HDB, MAS and your bank. This is general information, not financial advice.
