“I never thought I would have a place to call my own,” 57-year-old Sheila tells us as we sip coffee in her four-room HDB flat in Sengkang. It has been just over 10 years since her divorce and the past decade has seen a whirlwind of changes in her life. For one, she has bought her own flat, where she now lives with her 28-year-old son, a public servant. “The thing that surprised me the most is that I could pay the monthly instalments of about $950 entirely with CPF, which frees up my cashflow for daily necessities,” shares Sheila, who works full-time as an educator.
This payment option was especially useful in the months immediately after her divorce. “Back then, there were many things that needed to be paid for with cash,” she recalls. “Lawyers’ fees (for the divorce), renovation costs and even the mover’s fees. So it was really a relief that I was able to pay for the new flat with my CPF savings.”
Breaking down the costs
It’s not just the monthly instalments that Sheila has funded with her CPF savings; she also dipped into these monies to pay for upfront costs.
“I paid the 20 per cent downpayment on my flat with CPF,” she says, adding that she is financing her house with a bank loan, as back then, she had found a loan package with lower interest rates. “The remaining five per cent I paid for with cash.”
On the other hand, homeowners who choose to finance their flats with a loan from HDB can use their CPF savings to pay the required downpayment (10% of purchase price) in full.
Besides the downpayment, Sheila could also use her CPF savings for other housing-related expenses, like the stamp duty and legal fees, and Home Protection Scheme premiums.
All of these payments were funded with the sums in Sheila’s CPF Ordinary Account (OA), which had been steadily growing over her 20-year career in education. The first HDB property was fully paid for by her ex-husband. “When I was younger, I used to wonder what I would use my CPF savings for,” she says. “Who knew that it would be to fund a place to call my own?”
