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CPF Housing Withdrawal Limits: What You Need to Know

July 9, 2018

If you’re reading this, chances are you’re probably relying on — or intending to rely on — your CPF to pay the monthly mortgage instalments for your property. However, there’s a limit on how much CPF funds you can use in some cases. To avoid the rude shock of realising you’ve exceeded your CPF Housing Withdrawal Limits for property (and have to pay the remainder of your home loan in cash), read this article. You’ll find out exactly how much of your home can be paid off with your CPF funds.

Understanding the CPF Housing Withdrawal Limits

In a nutshell, the total amount of CPF funds that you can use to pay off your property depends on two limits: the Valuation Limit (VL) and Withdrawal Limit (WL).

Let’s take a second to define these: the VL refers to the purchase price or the value of the property at the time of purchase (whichever is lower). The WL refers to the maximum amount of your CPF you can put towards the property, and this is currently set as 120% of the VL.

CPF Housing Withdrawal Limits Infographic

Found the infographic useful? Let’s go into greater detail:

If you’re getting a HDB loan:

For a BTO flat

Good news! Neither the VL nor the WL applies to you, and you can use your CPF to pay off your house in full.

For a resale/DBSS flat

The VL applies to you. If you want to use your CPF savings beyond your VL, then you’ll have to:

  • Meet the Basic Retirement Sum (BRS) in your Ordinary Account (OA) and Special Account (SA) if you’re below 55, or
  • Meet the BRS in your OA, SA and Retirement Account (RA), if you’re 55 and above

Detailed scenario:

Say you want to buy a resale flat with a remaining lease of 65 years. Given that the purchase price of the flat is $500,000 and the value of the flat is $480,000, your VL will be capped at $480,000.

Now, calculate your monthly instalment based on your loan amount, tenure and interest rate.

Assuming a $100,000 downpayment, a loan amount of $400,000, a tenure of 30 years and an interest rate of 2.6%, you’ll pay $1,601 each month. Given that your VL is $480,000, you’ll hit the limit within 22 years and 1 month. If you’re unable to meet your BRS at this point of time, then you’ll have to switch to paying cash once this happens. If you’ve met your BRS, then you’ll be able to continue using your CPF savings to pay your mortgage.

(For HDB loans, the WL is not applicable.)

[To find out if you’ll hit your CPF Housing Withdrawal Limits, access the CPF Housing Withdrawal Limits Calculator.]

[To find out the maximum amount of CPF funds you can use for a property with less than 60 years of lease remaining, access CPF’s Property with Less Than 60 Years Lease Calculator.]

If you’re getting a BANK loan:

As long as you’re taking a bank loan, both the VL and WL applies to you, regardless of your housing type.

For a flat purchase at $500k and valued at $480k:

VL = $480,000

WL = $480,000 x 1.2 = $576,000

Like the previous scenario, you’ll have to meet your BRS to continue to service your mortgage with your CPF savings, once you go beyond your VL of $480,000. The difference here is, once you hit your WL of $576,000 (at the 27 years, 4 months mark for a 30-year tenure), you’ll have to start paying cash regardless of whether you’ve met your BRS or not.

A final word on using CPF funds to finance your property

To minimise the cash outlay for their properties, many Singaporeans will try and milk their CPF for all it’s worth. Before you do so, be mindful whether you’ll hit the CPF Housing Withdrawal Limits before your loan tenure is up. If you do, make sure you’ll have enough cash savings by then and have the financial means to service the rest of your loan tenure by cash.

Also, consider whether it’s worth paying your instalments via CPF, given that you face the double consequence of sacrificing the 2.5% interest rate that you would otherwise earn in your CPF Ordinary Account, plus the fact that you’ll have to return accrued interest to your CPF account if you sell the property. Long story short, if you decide to use the bulk of your CPF funds to finance your property, make sure you have a good cash savings and/or investment plan for your retirement.


If you found this article helpful, recommends Deciding between HDB loans and bank loans? Here’s a quick reference and 5 property financial disasters homeowners don’t realise they’re exposed to

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