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16 Jul 2020 


An image of a child holding wooden cubes and blocks

“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?”

Looking ahead

An image of a miniature standing on top of stacked coins

Sheila knows that her golden years are on the horizon and that she has to start planning for her life in retirement. While she plans to continue working for as long as she can, she is also aware of the effect of age on her body. “I feel older, especially on some days when the whole body aches,” she laughs. “But what to do? Have to keep working to keep myself busy and occupied.”


Sheila is glad that she has almost paid off her house in full and that she is still chalking up savings in her OA and MediSave Account (MA) for her housing and healthcare needs. She also set aside savings in her Retirement Account (RA) when she turned 55 two years ago. This amount will provide her with monthly payouts under CPF LIFE from age 65, for as long as she lives. She intends to use these payouts to supplement her savings to meet her retirement needs as she kicks back and enjoy her golden years. 


Sheila was able to strike a balance in using her CPF savings for housing and saving up for retirement by being prudent with her property choice: because she chose a smaller flat in a non-mature estate, she was able to ensure that her OA savings will not be depleted and can continue to grow every month, despite the $950 being used to pay off her housing loan.


“Over the years, the savings in my MA have grown significantly as well, and I am indeed grateful for that peace of mind,” she explains. “I know that if something were to happen to my health, at least I have my MediSave to pay for my medical needs.” 


Sheila’s independent spirit is clear when we ask her about whether she plans to tap into her son’s MA, should she need extra money to pay for future medical costs. “Let him keep that for when he is old and sick,” she quips.


How much CPF savings would you use for your home purchase?

It may be tempting to use all your CPF savings to pay for your house; but do remember that your CPF savings are also meant for your retirement needs. Here are some things to consider when deciding whether to use all your OA savings for your house or leave some for your future needs:   

An infographic on considerations before using your CPF Ordinary Account savings for your home

It’s also important to note that there are limits on the amount of CPF savings that can be used for a home purchase. The amount you can use for your house depends on these factors:

  • Are you buying a new or resale HDB flat?
  • Can the flat’s remaining lease cover the youngest buyer, who is using his/her CPF savings for the flat, to at least 95 years old? If the duration of the flat’s remaining lease cannot cover the youngest buyer to at least 95 years old, CPF usage will be pro-rated based on how near to age 95 the property’s lease can last him/her. 
  • Are you financing your HDB flat with an HDB loan or bank loan? 


You can use the CPF Housing Usage Calculator ​to calculate this amount, or check how much more of your OA savings you can use for your home purchase under the “Property” section on your CPF statement.


​Information accurate as at 16/7/2020​