CPF Housing Withdrawal Limits: What you need to know

6 min read

If you’re reading this, chances are you’re probably relying on — or intending to rely on — your Central Provident Fund (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:

Note that your CPF savings can only be used if the property you’re purchasing is freehold or has a remaining lease of more than 20 years, with enough lease to cover the youngest buyer until they’re at least 95 years old.

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

Read this: What happens if your housing loan deductions reach your CPF Basic Retirement Sum (BRS)?

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 S$500,000 and the value of the flat is S$480,000, your VL will be capped at S$480,000.

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

Assuming a S$100,000 downpayment, a loan amount of S$400,000, a tenure of 30 years and an interest rate of 2.6%, you’ll pay S$1,601 each month.

With a VL is S$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.)

Find out if you’ll hit your CPF Housing Withdrawal Limits with the CPF Housing Withdrawal Limits 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 S$500k and valued at S$480k:

VL = S$480,000

WL = S$480,000 x 1.2 = S$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 S$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.

Buying a second property?

If you’re buying a second property, the WL will be capped at 100% of the VL.

You can use your remaining CPA OA to fund your second property, after setting aside your BRS.

After hitting your CPF limit, the remainder of your monthly mortgage needs to be paid in cash.

Buying a property with less than 60 years of remaining lease?

You can still use your CPF OA to fund such a property, under certain conditions:

Scenario 1: If you have a property financed with OA savings that DOESN’T cover you till you’re 95:

  • You need to set aside the relevant BRS, depending on your age.

Scenario 2: If you have a property financed with OA savings that WILL cover you till you’re 95:

  • You need to set aside the relevant FRS, depending on your age.

Scenario 3: If you DON’T have a property financed with OA savings:

The percentage of your OA payments for either of these three scenarios will be pegged to the lower of the purchase price or valuation price of the property.

Also regardless of which scenario you find yourself in, the lease needs to cover the youngest buyer until they’re at least 95 years old.

This is the HDB’s way of ensuring you’ll have a roof over your head while having enough funds for your retirement.

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. The more CPF funds you allocate on housing, the less you’ll have for retirement, so make sure your debt repayments don’t make up the majority of your income.

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.

Read this: More people were unable to fully return their CPF monies after selling their house

Long story short, if you decide to use the bulk of your CPF funds to finance your property, make sure you have a decent cash savings and/or investment plan for your retirement.

Have a question on CPF housing withdrawal limits? Ask us in the comments below!

If you found this article helpful, 99.co 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

Looking to sell your property?

Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.

One easy way is to send us a request for a credible and trusted property consultant to reach out to you.

Alternatively, you can jump onto 99.co’s Property Value Tool to get an estimate for free.

If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal 99.co.

Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.

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