Scheduled Maintenance: CPF digital services will not be available on 7 Apr 2024, from 12am to 8am.

Your page is loading.
One moment please.

26 Oct 2023


1. Buy within your means


Buying a home is a significant milestone and a long-term financial commitment, so it is important to find one that you can afford in the long run. Don’t forget that there are fees such as stamp duties, agent fees, home insurance and renovation expenses that you will need to pay cash for, and the monthly loan instalments! 

A good gauge is to look for homes that are priced within 5 years of your combined annual income. For example, if your combined annual income is $100,000, you may want to look for a property that is priced within $500,000.


2. Keep your Mortgage Servicing Ratio (MSR) within 25%


The Mortgage Servicing Ratio (MSR) refers to the portion of your gross monthly income that goes towards repaying all property loans, including the loan being applied for. To ensure that your mortgage repayments remain sustainable, aim to keep your MSR within 25% of your gross monthly income.


3. Spend within the monthly contributions to your Ordinary Account (OA)


Your CPF Ordinary Account (OA) account is also meant for retirement needs. Avoid having monthly loan deductions that exceed your monthly contribution. Balancing these payments ensure you are financially prepared for the long-term.


4. Have sufficient savings in your Ordinary Account (OA)


If it is within your means, use cash to help pay for your housing loan, and retain an amount that is equivalent to 6 months’ worth of your monthly income. This way, you can still service your housing loan using OA savings in times of need.


5. Review life milestones and adapt your finances accordingly


Your needs, goals, and even circumstances will evolve over time. Review your finances regularly, and consider the various government schemes and benefits available to you. Be flexible and proactive in adapting your financial habits with changing life circumstances.



With these five tips, you can make informed decisions while ensuring your home ownership experience is smooth and worry-free. Remember that consistent financial planning and adaptability are key to long-term financial stability and a debt-free retirement.


The information provided in this article is accurate as of the date of publication.