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Beta page on home purchase

This is part of a trial service to help home buyers through the process of buying and selling HDB flats using CPF savings.

flat and condo along a street
graph of 3-month compounded Singapore overnight rate from May to October 2022

Banks are gradually offering home loans which are pegged to Singapore Overnight Rate Average (SORA). The 3-month compounded SORA has been increasing steadily since 2022 and average interest rates will likely remain high in the coming months as a result of the continuous interest rate hikes by the United States Central Bank.


What this means for you is that you may see higher monthly instalments for your housing loan over time. It is crucial to exercise extra prudence in borrowing and to maintain an emergency fund as a backup for any unexpected events in a heightened interest rate environment. It is also important to exercise caution in taking on new financial commitments.



Do note that whether you buy your next flat or sell your existing one first, the Loan- to-Value limits remain the same i.e., up to 80% for an HDB loan and 75% for a bank loan.

west, north and north east region on Singapore Map

There are exciting plans to develop these urban areas into the Punggol Digital District and the Jurong Lake District, creating vibrant communities for living and working.




father, mother and child inside a house

James and Mary have shortlisted 2 properties that fit their dream home criteria.

Flat type 5 room flat at  Jurong East 5 room flat at Ang Mo Kio
Purchase price ~ $500,000 ~ $670,000
Remaining lease ~ 55 years ~ 55 years

Upon the sale of their flat, they are able to utilise $431,000* of the sales proceeds to purchase their next flat.


The breakdown below shows the capital James and Mary have to purchase their next flat.


*Proceeds include cash proceeds from the sale of the flat + CPF refunds from previous flat sale

Cash proceeds from previous flat sale $234,000
+ Ordinary Account balance (existing + refunded) + $197,000**
= Capital available for next flat purchase = ~$431,000

**This amount is inclusive of

  1. Both members Ordinary Account balance before flat sale
  2. Refund of the amount that members used for the previous flat and interest accrued on the amount used for the previous flat

James and Mary currently earn an monthly income of $2,700 each.

If the couple purchases the 5-room flat at Jurong East, their monthly instalment*** would be approximately $150 each.

Purchase price $500,000


(Capital available) 

Loan amount ~ $69,000

If the couple purchases the 5-room flat at Ang Mo Kio, their monthly instalment*** would be approximately $550 each.

Purchase price $670,000


(Capital available)

Loan amount ~ $239,000

***This is based on the following assumptions:

  1. James and Mary take an HDB loan
  2. They utilise the full sales proceeds and CPF refunds to pay the downpayment for their new flat
  3. 25-year loan tenure

If the couple purchases the more affordable 5-room flat at Jurong East, James will receive an estimated monthly payout of ~$2,200 to $2,300**** from age 65.

bigger bag of monies

If the couple purchases the costlier 5 room flat at Ang Mo Kio, James will receive an estimated lower monthly payout of ~$1400 to $1,500**** from age 65.

smaller bag of monies

****This is based on the following assumptions:

  1. Assumes a CPF LIFE Standard Plan payout of a male
  2. Assumes a steady income growth of 2% annually
  3. Member continues to work till the age of 65
  4. Existing Ordinary Account/Special Account balance is transferred for the creation of the Retirement Account upon reaching age of 55
  5. No withdrawals were made at the age of 55

chart showing a borrower's TDSR should be lesser or equal to 55%
chart showing that the MSR is capped at 30& of the borrower's gross monthly income
Difference in LTV between HDB loan and bank loan

Some payments to be made in cash...

  Bank loan HDB housing loan
  • Loan quantum
  • You can borrow up to 75% of the flat purchase price if the loan period is 25 years and below
  • You can borrow up to 80% of the flat purchase price
  • However, you will be required to use all of your Ordinary Account savings above $20,000 first
  • Downpayment and payment during key collection
  • The minimum downpayment and payment during key collection required is 25% of the purchase price
  • You may use your Ordinary Account savings for your downpayment
  • However, 5% of it has to be paid for in cash
  • The minimum downpayment and payment during key collection required is 20% of the purchase price which can be fully paid for using your Ordinary Account savings
  • Use of CPF savings and previous property sales proceeds
  • You may use or retain any amount in your Ordinary Account (up to applicable limits)
  • If you are taking a second HDB loan(up to applicable limits), you and the essential occupier need to use 50% of the cash proceeds from the disposal of the existing or last-owned HDB flat
  • Interest rates
  • Bank interest rates fluctuate as these are more affected by the economic environment
  • The HDB interest rate is 0.1% above the Ordinary Account interest rate, which is currently 2.6%
  • Repayment amounts
  • Fluctuates depending on loan interest rate
  • Relatively constant due to stable interest rate
  • Capital repayment or refinance loan
  • Early and late repayment penalties may apply
  • Penalties are subject to the terms and conditions of the loan provider
  • May only refinance loan with banks and unable to refinance to HDB loan
  • There is no early repayment penalty, but a late payment charge of 7.5% per annum
  • Option to refinance to bank loan

Using cash Using CPF

Less flexibility for your other expenses

Using cash to pay for your home purchase/loan means less cash available for your other expenses. However, the unused CPF monies will contribute to your retirement sum.

More flexibility for your other expenses

Using your CPF frees up your cash savings and allows you to use it for other expenses.

More stable returns on your savings for retirement and housing

The unused monies in your Ordinary Account can earn up to 3.5%* risk-free interest. These Ordinary Account monies can also be a source of emergency fund for financing your flat in times of need or savings for your retirement.

Less certainty on your savings for retirement and housing

While you can place the unused cash in various investment instruments and possibly earn a higher rate of return than the Ordinary Account, it is also possible to earn a lower rate of return or even make a loss.

Potentially higher cash proceeds upon sale

Using cash means that you will not need to make a CPF refund to your CPF account upon the sale of your property. Thus, you may receive higher cash proceeds.

Possibly lower proceeds upon sale

You will need to refund more to your CPF account and thus may receive lower cash proceeds. Nonetheless, you can still use your CPF refund for your next flat, even though it cannot be used for payments that need to be paid in cash such as renovation.

  New Flat Resale Flat
  • Search, plan, contract
  • Check eligibility to buy flat and grants available
  • Search for desired area to live in upcoming flat launches
  • Register intent to buy
  • Search for desired flat
  • Negotiate with seller and request for Option to purchase (OTP)
  • Choose mode of financing
  • Request for value from HDB
  • Exercise OTP
  • Application process
  • Apply for flat online at HDB's website during sales launch or open booking
  • Book a flat based on queue position
  • Pay the option fee
  • Submit resale application
  • Endorse resale documents
  • Pay resale fees
  • Obtain approval from HDB
  • Completion of sale
  • 6 months after booking of flat, sign the Agreement for Lease
  • Make downpayment
  • When the flat is ready, collect the keys
  • Pay balance purchase price
  • Attend completion appointment at HDB

  HDB flat Others
  • Plan, contract
  • Register intent to sell on HDB's website
  • Receive a preliminary assessment on your eligibility to sell your HDB flat
  • Determine the selling price of your flat, list flat for sale, negotiate with buyers
  • Grant Option to Purchase (OTP) to potential buyers
  • Doing paperwork and listing flat for sale
  • Viewing and negotiations with buyer
  • Grant OTP to potential buyers
  • Application process
  • Buyer exercises OTP
  • Buyer and seller to submit resale applications online within 7 days of each other
  • Endorse resale documents
  • Pay resale fees
  • Obtain resale approval
  • Buyer exercises OTP
  • Buyer signs Sale and Purchase agreement
  • Buyer pays Buyer's Stamp Duty / Additional Buyer's Stamp Duty (if any)
  • Completion of sale
  • Attend completion appointment at HDB
  • Completion of sale upon full payment

required CPF reund before 55 and after 55

Joint tenancy


If you or your co-owners decide to sell your share of the property, you would need to convert the joint tenancy to a tenancy-in-common first.




If you hold the property under tenancy-in-common, you are able to sell your share in the property.


Similar to a sale of the entire property, you will be also be required to refund the principal amount of CPF used and the accrued interest (P+I) based on your respective proportions.


You might need to fork out additional cash to refund to your CPF account if you use more CPF monies than your share of property. This is to ensure that CPF members who had used more CPF savings than their share of property will still have sufficient CPF savings for their retirement and housing needs.

hand holding house sign

When selling our flat, we tend to overlook the costs involved, and may overestimate our total proceeds received in cash. Besides paying off the outstanding home loan, we also have to refund the CPF principal amount used plus accrued interest, and to pay for expenses such as your agent's commission and sale-related administrative and legal fees. It is also possible not to have any cash proceeds despite selling your flat at a higher price!



Let's take a look from the context of John and Sarah to help us make a more informed choice when it comes to our own flat sale.

When John and Sarah got the keys to their HDB flat 5 years ago in 2017, they purchased it at $240,000. The breakdown of the costs is as follows:

Initial flat purchase cost
Purchase price $240,000
Downpayment (10%) $24,000
Loan taken (90% LTV)  $216,000

John and Sarah sold their flat at $520,000. Upon settling the outstanding loan, making the required CPF refunds and other costs involved, they received balance sales proceeds of $234,000. The breakdown is as follows:

Selling transaction
Selling price* $520,000
-outstanding loan - $183,000
- CPF refunds (principal amount used and accrued interest)  - $90,000
- other expenses related to sale (agent commission, admin and legal fees)  - $13,000
= Balance sales proceeds = $234,000

*Selling price includes the option monies received from buyer

John explaining to Sarah why the cash proceeds is lower than what she expected

When you pay your monthly instalments to HDB or banks, only the principal amount gets deducted from your outstanding loan balance. The interest is paid to HDB or banks for granting you the loan.


In this case, you may notice that despite paying approximately $59,000* in monthly instalments so far, only 56%($33,000/$59,000) goes towards paying off the principal amount. The remaining sum of $26,000 are interest expenses that do not reduce your overall loan balance.


Do take note of the above, so as to be more informed of where your monthly instalments are going to!


*$59,000 is the sum of the total monthly instalments paid over 5 years, based on a HDB loan of $216,000 and a 25 year loan tenure

kettle flowering money plant

While upgrading your flat, it is important to ensure that your retirement needs are taken care of as well. While it may not be top of mind when buying your home, your housing purchase has a significant impact on your ability to pursue the purposeful retirement you are dreaming of.


Find out how you can ensure your retirement needs are not compromised while upgrading your flat.