A contra facility lets you complete the sale of your existing flat and the purchase of your next home on the same day, so the sale proceeds are used directly to fund the new purchase instead of sitting in a separate bridging loan. It is one of the lesser-known tools I explain to upgrading families almost every month, because many only hear the word contra for the first time when their lawyer mentions it a few weeks before completion.
What a Contra Facility Actually Is
In a normal property transaction, you sell your existing home and receive the proceeds, then separately pay for your new home. If the two completion dates do not line up, you either need the cash on hand to cover the new purchase first, or you take a bridging loan to plug the gap until your sale proceeds come in. A contra facility removes that gap entirely by arranging for both completions, the sale of your old home and the purchase of your new one, to happen on the exact same day, through the same conveyancing lawyer.
Because both transactions settle simultaneously, the money from your sale is netted off against what you owe on your purchase. You are not borrowing against proceeds that have not arrived yet, you are simply directing proceeds that arrive and leave your account within the same completion process. This is why conveyancing lawyers sometimes call it a back-to-back completion, and it is most commonly used by HDB upgraders moving from a resale flat into a resale condo, or from one resale flat to another.
How the Timing Works in Practice
For a contra to work, your sale and your purchase need to be handled by the same law firm, or by firms willing to coordinate closely, because the funds have to be reconciled on the same day. Your lawyer calculates the net amount: the sale price of your old home, minus any outstanding HDB or bank loan and CPF refund, against the purchase price of your new home, minus your downpayment and loan disbursement. Whatever balance remains is what actually changes hands on completion day.
This means the Option to Purchase dates, the exercise dates, and the agreed completion dates on both transactions need to be set with the contra in mind from the start. In practice, this is a conversation that happens early, often at the point you are deciding how much time to give your buyer and how much time to ask your seller for, rather than something you can request last minute. I generally start structuring this with clients the moment they decide to upgrade, because the completion date on the sale and the completion date on the purchase both need buy-in from the other party’s lawyer too.
Contra Facility vs Bridging Loan: Which Fits Your Situation
A bridging loan is useful when your sale and purchase dates cannot be aligned, perhaps because your buyer needs a longer completion period, or your new home’s seller wants to complete sooner than your sale allows. It gives you short-term financing, usually interest-only, to cover the downpayment on your new home while you wait for your existing sale to complete. The tradeoff is the interest cost and the extra facility to arrange, on top of your home loan.
A contra facility avoids that interest cost altogether because there is no interim borrowing, the money simply flows through on one settlement day. The tradeoff is flexibility: contra only works if both completion dates can realistically be synchronised, which depends on your buyer’s timeline, your seller’s timeline, and both sets of lawyers being able to coordinate. If either side needs a materially different completion date, a bridging loan or an extended timeline may be the more workable option, and that is a decision worth discussing with your lawyer and your banker before you commit to either Option to Purchase.
The Risks and Practical Limitations
The main risk with a contra arrangement is that it depends on everything completing on schedule, with no room for delay on either side. If your buyer’s financing is delayed, or your seller’s own onward purchase falls through, the entire chain can be affected, because your sale and purchase are tied to the same day. This is different from a bridging loan, where a short delay in your sale simply means carrying the bridging facility a little longer, rather than disrupting a linked completion.
There is also less room to negotiate completion dates once a contra is set up, since you are essentially asking two separate transactions to move in lockstep. If you anticipate needing flexibility, for example if you are still deciding on renovation timelines or temporary accommodation, a contra’s rigidity may not suit you. I usually recommend contra only when both your sale and purchase are reasonably far along and stable, not when either side is still uncertain or subject to financing approval that has not come through yet.
Making Contra Work: What to Prepare Before You Commit
If you think a contra facility suits your upgrading plan, the first step is to engage one law firm, or coordinated firms, for both your sale and your purchase, and raise the contra arrangement with them as early as possible. Your lawyer will need details of your outstanding HDB loan or bank loan, your CPF refund amount with accrued interest, and your new home loan’s expected disbursement, all well ahead of the exercise of either Option to Purchase.
It also helps to have your new home loan approved in principle before you lock in your sale completion date, since the bank’s disbursement timeline feeds directly into whether the contra sums reconcile cleanly on the day. For HDB resale transactions specifically, HDB’s own resale completion appointment has its own scheduling process, so your lawyer will need to work within HDB’s available appointment slots as well as your private purchase’s completion date. None of this is difficult, but it does require more upfront coordination than a straightforward single transaction, which is exactly why getting the right conveyancing lawyer and timeline sorted early makes the difference between a smooth contra and a stressful one.
Common questions
Can I use a contra facility for an HDB flat to condo upgrade?
Yes, contra is commonly used when upgrading from an HDB resale flat to a resale condo, as long as both completions can be scheduled on the same day. HDB’s resale completion appointment timing needs to be coordinated with your condo purchase completion, so this is best arranged through your lawyer early in the process.
Does a contra facility cost extra compared to a normal sale?
A contra arrangement does not involve an interest-bearing loan, so you avoid bridging loan interest, but your lawyer may charge a slightly higher conveyancing fee for coordinating two linked completions. It is worth asking for this upfront when engaging your law firm.
What happens if my buyer’s financing falls through after I arrange a contra?
If your buyer’s sale cannot complete as scheduled, your linked purchase completion is also at risk since the funds were meant to flow through on the same day. This is the key reason contra works best when both the sale and purchase are already fairly firm, with financing approved, rather than still pending approval.
Is a contra facility the same as a bridging loan?
No. A bridging loan is short-term financing that covers your new purchase while you wait for your sale proceeds to arrive separately. A contra facility avoids borrowing altogether by completing both transactions on the same day so the proceeds are used directly, without an interim loan.
Can I still do a contra if I am buying a new launch condo?
Contra is generally not used for new launch purchases under the progressive payment scheme, since there is no single completion date to align with your HDB sale. It is mainly suited to resale-to-resale or resale-to-resale-condo transactions where both sides have a fixed completion date.
If you are weighing up a contra facility against a bridging loan for your upcoming move, it really comes down to how well your sale and purchase timelines can align, and that is easier to assess with an actual set of numbers in front of you. Feel free to drop me a message on WhatsApp or DM if you would like to run through your specific situation, no pressure at all.