{"id":25045,"date":"2022-07-25T11:50:00","date_gmt":"2022-07-25T03:50:00","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=25045"},"modified":"2024-10-11T12:01:48","modified_gmt":"2024-10-11T04:01:48","slug":"9-must-know-things-about-using-cpf-to-buy-a-house","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/9-must-know-things-about-using-cpf-to-buy-a-house\/","title":{"rendered":"9 must-know things about using CPF to buy a house"},"content":{"rendered":"
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Most Singaporeans know they can use CPF to pay for their home loan, and… that is it. But there’s much more to it than that.<\/p>\n\n\n\n

1. Whether you use a bank or HDB loan affects how much CPF you can use<\/h2>\n\n\n\n

When you take an HDB concessionary loan<\/a>, you can borrow up to 85% of the price or value of your flat (whichever is lower). The remaining 15% can be paid through CPF.<\/p>\n\n\n

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You can borrow up to 85% of the price or value of your flat (whichever is lower) with a HDB loan.<\/figcaption><\/figure><\/div>\n\n\n

When you take a bank loan, you can only borrow up to 75% of the price or value of your house (whichever is lower). Another 20% can be paid through your CPF, while 5% must be paid in cash.<\/p>\n\n\n\n

Read this: HDB concessionary loan: Know your eligibility + How to apply for HLE<\/a><\/i><\/p>\n\n\n\n

2. You can now reserve up to S$20,000 in your CPF OA when buying a house<\/h2>\n\n\n\n

When you use your CPF to buy a flat, you no longer have to use everything in your Ordinary Account (OA). You can now set aside S$20,000.<\/p>\n\n\n\n

Why would you do this? Well, it provides a “safety buffer” in case things go wrong. You can use this money to pay your home loan if you get retrenched, fall sick and cannot work, etc.<\/p>\n\n\n

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You can now set aside S$20,000 in your CPF OA.<\/figcaption><\/figure><\/div>\n\n\n

However, there may be good reason not to set aside the full S$20,000; just a sufficient sum to cover your loan repayments for six months should do. We explain why<\/a> in this article.<\/p>\n\n\n\n

3. There is a limit to how much CPF you can use for your housing<\/h2>\n\n\n\n

This cap is called the CPF Withdrawal Limit<\/a>. It is based on the Valuation Limit (VL) of the house you buy.<\/p>\n\n\n\n

(The VL is the lower<\/strong> of the property price or valuation \u2014 if your flat costs S$350,000, but the valuation is S$340,000, then the VL is S$340,000).<\/p>\n\n\n\n

The CPF Withdrawal Limit is capped at 120% of the VL. Any amount beyond that has to be paid for in cash.<\/p>\n\n\n\n

Read this: CPF Housing Withdrawal Limits: What you need to know<\/a><\/i><\/p>\n\n\n\n

4. You can pay your home loan with your CPF regardless of whether you buy public or private property<\/h2>\n\n\n\n

You can use CPF to pay the home loan for public and <\/em>private housing. However, the usual restrictions (such as the withdrawal limit in point 3) still apply.<\/p>\n\n\n\n