What is progressive payment?
Unlike resale properties where you pay the full purchase price at completion, new launch condominiums are paid in tranches as construction reaches defined milestones. This is called the Normal Progressive Payment Scheme (NPPS).
The payment schedule
The typical schedule: 5% Option Fee on booking, 15% on signing the Sales & Purchase Agreement (within 8 weeks), then tranches of 10% each as foundation, framework, partition walls, roofing, windows, fittings and TOP are completed. The final 15% is paid at legal completion.
Interest Absorption Scheme (IAS)
Some developers offer an IAS where they absorb the interest during construction. You only start repaying the full loan after TOP. This typically adds a small premium to the purchase price but improves cash flow during the construction period.
Planning your cash flow
Work with your banker to understand how progressive drawdowns affect your monthly instalments. Each tranche draws down the corresponding loan amount, and interest begins accruing on the drawn portion immediately.