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Should I use my CPF to buy private residential property?

Image credit: CPF

Using your CPF Ordinary Account (OA) savings to finance your private property is an alternative to using cash and is a personal decision. Home buyers should however be mindful not use all their CPF OA savings to finance their private property. That is because CPF is essentially for ones retirement, and the more that is used for property, the less one may have for retirement.

The more it is used for property, the less one may have for retirement. One also has to bear in mind the other items one is servicing with your CPF OA savings (such as children’s local tertiary education and insurance premiums; and the reduced CPF contribution rates as one ages).

Home-buyers may use their CPF OA to buy more than one property.

There are however some restrictions in place under the Multiple Property Rule before one can use the CPF OA for property purchases. The Multiple Property Rule requires home seekers who want to buy second or subsequent property to ensure that the property they want to buy comes with a remaining lease of at least 60 years after meeting certain conditions based on their age.

If one is below 55 years of age, they need to set aside the current Basic Retirement Sum in their Special Account, including the amount used for investments, and Ordinary Account before they can continue to use their CPF savings. If one is 55 years old or older, they need to set aside their Basic Retirement Sum in their Retirement Account, Special Account (including the amount used for investments) and Ordinary Account before they can continue to use their CPF savings.


If you are using CPF to service the housing loan for two private properties, CPF will deduct from your CPF OA to pay the monthly installments as requested by you.

There is no fixed order of deduction as to which property will be paid first. CPF members need to ensure that they have sufficient funds in their CPF OA account for the monthly installments deductions. The sale proceeds will be used to pay off the outstanding housing loan taken to buy the private property and the required CPF refund in the order agreed among the owners, financiers and the CPF Board.

If  home seekers are using their CPF savings to finance their private property, they will have to refund the following to their CPF account:

  • the principal CPF amount (P) which you have withdrawn for the private property; and
  • the accrued interest (I) which you would have earned if the savings were not withdrawn from your CPF account.If you are 55 years old and above:

If you are 55 years old and above:

  • CPF members will also need to refund the pledged amount on top of the P and I if they had pledged their property to withdraw their Retirement Account (RA) savings in cash;
  • The amount refunded to members’ CPF account will be used to meet their retirement savings up to the Full Retirement Sum (FRS) in their RA. Thereafter, any balance will be paid to CPF members in cash within 1 week from the time the refunds are credited to their CPF account;
  • Members can also choose to retain the balance in their  CPF account by writing to CPF Board at least 2 weeks before the completion of the sale of their property. Members should also note that the withdrawal rules for members aged 55 and above will apply subsequently should they want to withdraw these savings;
  • Members can make a request to only refund up to their FRS if they are unable to wait for the pay-out by writing to CPF Board at least 2 weeks before the completion of the sale of their property.

An important consideration always is, how do one determine a suitable loan amount, repayment period and repayment amount which is within ones financial means. This is where the services of a mortgage consultant becomes useful as the consultant, being a professional, will be able to estimate an affordable home price, taking into consideration your gross household income and expenses, as well as the repayment amount and repayment period.

Written by: Phoenix Lee/Contributor iCompareLoan

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Written by Ravi Chandran


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