How To Save Money On Maternity Costs In Singapore

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Find out how government schemes and insurance can help you save money on maternity costs in Singapore, without sacrificing the quality of care. When your Facebook feed is flooded with pictures of mothers cuddling their babies, you don’t see the financial costs they have to juggle. But the moment you want to start your own family, you’ll want to know how much you need save for maternity medical costs. Will you be able to afford it? Thanks to government schemes and insurance policies, giving birth to a child in Singapore isn’t as expensive as you think. Here are some ways to save money on maternity costs.

 

1. Use Your Medisave Maternity Package

The Medisave Maternity Package (MMP) covers prenatal medical expenses such as ultrasounds, plus delivery expenses. There are a few different components to the scheme, with varying claimable amounts for prenatal expenses, hospital room stays and the actual delivery itself. Below is a table that breaks how much can be claimed from the MMP. 

 

Type of Expense	Cost	Medisave Claimable
Prenatal medical expenses (ultrasound, tests, etc.,)	From S$800 onwards	S$900
Normal delivery at a public hospital (Two nights in a Ward A room)	From S$3,500 onwards	S$900 (S$450/night x2)S$750 (delivery)   Total claimable: Up to S$1,650
Normal delivery at a private hospital (Two nights in a 1-bed room)	From S$5,800 onwards
Caesarean delivery at a public hospital (Three nights in a Ward A room)	From S$6,900 onwards	S$1,350 (S$450/night x3)   S$2,150 (delivery) Total claimable: Up to S$3,500
Caesarean delivery at a public hospital (Three nights in a 1-bed room)	From $8,700 onwards

 

 

2. Don’t Forget the Baby Bonus

Besides Medisave, the government also helps lower maternity and newborn costs for couples via the Baby Bonus scheme. Depending on the number of children you have, the amount of upfront cash and matching grants increase in tandem. The following table illustrates how the scheme works.

 

Birth Order	Cash Gift (inclusive of Baby Bonus Plus)	CDA Contributions
		CDA First Step	Government Dollar-for-Dollar Matching
1st  and 2nd	8,000	3,000	Up to 3,000
3rd  & 4th	10,000	3,000	Up to 9,000
5th  & Beyond	10,000	3,000	Up to 15,000

 

In brief, you’ll receive an upfront cash disbursement upon the birth of your child, which you can use to cover maternity and newborn expenses. You’ll also be entitled to start a Child Development Account (CDA), a specialised account that gives you 12 years to save for your child’s future needs. The government will match the amount of money deposited in the CDA, up to a cap. Find out more about the Baby Bonus scheme here.

 

3. Get a Maternity Insurance Policy

Another way you can defray the high costs of giving birth is by getting a maternity insurance plan. Most such plans offer comprehensive coverage, so you can make a claim for pre- and post-natal hospital visits, as well as delivery charges. Getting a maternity plan will help you budget for the birth of your child, as you only pay premiums for a limited time period. As with all other insurance premiums, opt to pay on an annual or one-time basis to enjoy a slightly lower rate. Most major insurers do not offer standalone maternity care plans. Instead, they usually try to upsell you by bundling the maternity plan with another regular premium plan. If you’re planning to get life insurance for your newborn, you can try asking for lower premiums for both plans. Your insurer may offer vouchers in lieu of discounts, which you can then use to further reduce your out-of-pocket expenses. However, if you prefer to purchase a standalone plan, Pacific Prime offers several standalone maternity cover plans from third-party insurers. A quick check on their website found that the cheapest plan starts from S$792 per year for maximum annual coverage of S$800,000. It’s important to note that maternity insurance policies have waiting periods of 10 to 12 months. This means that you cannot claim any treatment costs, be it hospitalisation or delivery, during this time. Be sure to speak to a qualified insurance agent for the full picture before you sign up for a maternity plan, or any other insurance plan.

 

4. Choose a Public Hospital

It goes without saying that choosing a public hospital over a private one can cut your cost by half. Each has its pros and cons, but if cutting costs is important, then pick a public hospital for the birth of your child. Visit the MOH website to compare the costs of normal delivery and Caesarean delivery at public and private hospitals in Singapore. With government subsidies, insurance plans and the right payment method, you can realise substantial savings on your maternity costs. This frees you up to focus on your newborn, instead of worrying about the bills.

Can A Singaporean Survive On This Portfolio?

I have a friend (Let's call him Mr Cat). Mr Cat is in his early thirties, contemplating about quitting his job and living on his portfolio. I told him that his dream is not possible unless his portfolio is generating cash flow of at least $2k per month. Mr Cat then showed me his current portfolio, which is rather impressive if I do say so myself. Mr Cat is single without the need to support his parents. He lives in a fully-paid 4-room HDB flat left behind by his late mother. His savings are meagre though.

 

Updated on 19 May 2017

A Police report was filed against Felix Leong Bao Jie

How Much Do You Need To Buy Your First Flat In Singapore?

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

We’ve simplified the 2016 prices for a BTO flat, resale flat, executive condominium, and mass-market condominiums in Singapore. If you’ve been thinking about buying a flat in Singapore, you might have felt confused and overwhelmed about the fees and costs involved. In this article, we get down to brass tacks. Here’s much you realistically need in the bank to buy your first house, and what other expenses to prepare for.

 

What are the Property Prices in Singapore for 2016?

The costs of properties can vary significantly, based on factors such as surrounding amenities and condition. There will always be the occasional neighbourhood or unit in which the price is much higher or lower than the norm. These are general estimates only:

2016 Property Prices in Singapore
	BTO Flats (Non-Mature Districts)	BTO Flats (Mature Districts)	Resale Flats	Executive Condominiums	Condominiums (Mass-Market)
One-Bedroom Flat	–	–	–	Approx. S$420,000 to S$560,000	Approx. S$600,000 to S$700,000
Two-Bedroom Flat	–	–	–	Approx. S$640,000 to S$720,000	Approx. S$800,000 to S$900,000
Three-Room Flat	S$150,000 to S$190,000	S$200,000 to S$300,000	S$350,000 to S$380,000	Approx.S$776,000 to S$960,000	Approx. S$970,000 to S$1.2 mn
Four-Room Flat	S$295,000 to S$350,000	S$290,000 to S$320,000	S$420,000 to S$550,000	Approx S$1.12mn to S$1.4mn	Approx. S$1.4mn to S$1.8mn
Five-Room Flat	S$390,000 to S$500,000	S$400,000 to S$550,000	S$520,000 to S$700,000	Approx S$1.6mn to S$1.76mn	Approx. S$2mn to S$2.2mn
Penthouse Unit	–	–	–	Usually a minimum	Usually a minimum price of S$3mn

 

Why Resale Flats are More Expensive

A resale flat costs more because home prices tend to appreciate over time. A resale flat also means there is no wait time (you may have to wait two to three years for a BTO flat to be finished). There may be more amenities built up around the flat, as it has been around longer. For resale flats, there may be a premium on top of the actual flat price. This is called the Cash Over Valuation (COV). This varies significantly in different estates, from zero COV (no premium) to large amounts like S$50,000. In extreme cases, there have been “million dollar flats” resulting from sky high COVs. The current record holder is a maisonette in Bishan, which sold for a COV of $250,000 in 2014.

 

On Condominiums and Executive Condominiums

The prices we listed above are for most mass-market condos. Prices will be significantly higher for condos close to the Orchard area, as those would be considered luxury properties. As a general guideline, a new Executive Condominium (EC) is about 20 per cent cheaper than an equivalent new condo. This price difference falls to around nine per cent after the Minimum Occupancy Period (MOP) of five years, and narrows further to five per cent afterward. In short, deduct 20 per cent off the equivalent condo price for a new EC, and nine per cent for an EC that is at the five to 10-year mark.

 

How Much Money Do You Need to Save for Your First Flat?

We can work this out in steps, using a four-room flat and a three-bedroom condo as our examples. In addition to these costs, we suggest you build an emergency fund that can cover six months of your mortgage payments, if your CPF is not already sufficient for such a provision.

 

1. At Least 5% Downpayment

If you are using an HDB Concessionary Loan, you will need to make a downpayment of 10 per cent of the purchase price or valuation, whichever is higher. The downpayment can be paid from your CPF Ordinary Account (OA), in cash, or through a combination of both. If you are using a bank loan, you will need to make a downpayment of 20 per cent of the purchase price or valuation, whichever is higher. At least five per cent of this downpayment must be in cash. Of the remaining 15 per cent, you can pay from your CPF OA, in cash, or a combination of both. Note that you must use a bank loan for ECs. Note that this total downpayment is inclusive of the Option to Purchase (OTP). The OTP is a non-refundable deposit, that must be put down two weeks before the sale of the house. This deposit is counted as part of the downpayment, once you exercise the option. For example: In the case of a three-room BTO flat with a price of S$180,000, the downpayment is S$18,000. This can be from your CPF OA, in cash, or a combination of both. In the case of a three-bedroom condo at a price of S$900,000, the downpayment is S$180,000. Of this S$180,000, at least S$45,000 must be paid in cash. The remaining S$135,000 can be paid through your CPF OA, or a combination of your CPF OA and cash. With some discipline and careful planning, you can save money for your flat’s down payment before you turn 35.

 

2. Conveyance Fees

There are legal involved, in processing the paperwork for property ownership. For new HDB flats, the cost of legal fees is calculated as follows:

First $30,000 of property value: S$0.90 per S$1,000

Next $30,000 of property value: S$0.72 per S$1,000

Remaining Amount: $0.60 per S$1,000

There is no need to calculate this manually. Just enter the price of the flat in the HDB legal fee calculator. In addition, there is a Caveat Registration Fee of S$64.45 that must be paid to the Singapore Land Authority. For our sample three-room BTO, with a price of S$180,000, the fee would be $121. Inclusive of the Caveat Registration Fee, this would be S$181.45. For bank loans, the conveyancing fees can range between S$1,100 to S$3,000. Note that this price varies between law firms, and you can request to use a cheaper law firm than the bank’s default choice. If you use a mortgage broker, they will usually try to find a cheaper law firm for you. If you use HDB’s default law firm, the conveyancing fees can be paid from your CPF. If you are using another law firm (such as one chosen by the bank), you will have to ask the firm whether fees can be paid via CPF. For our sample condo, we will assume conveyancing fees of about S$1,500.

3. Home Insurance Premiums

The basic fire insurance for HDB flats comes from Etiqa, and is not a significant cost (S$1.50 to S$7.50 for a five-year term). Basic fire insurance is mandatory. For our three-room flat, it is just S$4.50 for five years. However, you should consider comprehensive home insurance. This gives you coverage for things such as temporary accommodation and storage costs (you will need both in the event of fire), and third party coverage (if the fire is your fault and your neighbour’s house burns down, they might be able to hold you liable for damages). We strongly recommend that all homeowners get a comprehensive insurance policy. Although the risk is small, the financial damage that can ensure is devastating. Remember that you will also have to repair and refurnish the house, after any disasters. The cost differs based on the insurer, but typical rates are between S$45 to over S$700 per annum (the most expensive policies may also include accident plans, which cover you and your family in the event of an accident). Policies for private homes cost more as compared to flats. We will assume our sample three-room flat has an insurance cost of S$45 per annum, whereas our sample condo has an insurance cost of around S$200 per annum.

 

4. Renovation and Furnishing Costs

The maximum cap on most renovation loans is six months of your income, or S$30,000. We will also assume this is the general amount spent on furnishing your unit, whether you pay it all in cash or take a loan. Interest rates on renovation loans range from three to five per cent per annum, so be sure to compare between banks before buying. The typical loan tenure is between three to five years.

 

5. Maintenance Fees

These are conservancy fees in HDB estates. You will have to check the rates with your town council, but they are generally in the range of S$20 to S$90 per month for Singapore citizens (reduced rates). Non-citizens pay a normal rate, which is notably higher (check with your town council for specific details). We will assume our three-room flat has conservancy charges of S$45 per month. For condos, maintenance fees depend on the management council. These typically range from S$200 to S$350, although there are cases when fees are even higher – for high-end developments with a concierge service or elaborate facilities, it is possible to see monthly costs of S$400 or more. We will assume our sample condo has maintenance fees of S$250 per month.

 

6. Property Taxes

Property taxes are determined by your home’s Annual Value (AV). The AV is the annual amount that you would get from renting out your property (check with the Inland Revenue Authority of Singapore to determine your home’s AV). You do not need to work out the amount manually. Just use this online calculator to determine your tax rate. For our sample three-room flat, we will assume an AV of S$14,400. The tax payable would be around S$512 per annum. For our sample condo, we will assume an AV of S$36,000. The tax payable is S$2,240 per annum.

 

7. Mortgage Repayments

For HDB flats, the mortgage interest rate is always 0.1 per cent above the prevailing CPF OA rate. This is currently 2.6 per cent per annum. For private property, the mortgage rate fluctuates. However, it is has been around 1.8 per cent per annum since 2008. We will assume a 25-year loan for both our sample properties. The loan for the three-room flat is S$162,000 (after down payment), and this comes to a repayment of $735 per month for 25 years. The loan for the condo is S$882,000 (after down payment). Assuming the rate stays at around 1.8 per cent, this comes to a repayment of S$3,653 per month, over 25 years.

 

Total Cost: The initial cost of the three-room flat, taking into consideration all of the above, is around S$48,181 (including CPF funds used). The monthly cost you have to be prepared to pay is about S$827 per month, for 25 years. The initial cost of the condo would be S$211,500 (including CPF funds used). The monthly cost is about S$4,057, for the next 25 years.