17 Apr 2026

SOURCE: CPF Board

As your income grows and your kids get older, you may be thinking about upgrading to a new home. However, just like your first home purchase, moving to a new home involves significant financial commitment.

Before you decide to upgrade to a new home, here’s what you should consider first.

1. Make your home upgrade count

Selling your current home and upgrading to a larger property makes the most sense when there is a clear reason for the move – whether it’s about having more space, a closer location to your child’s school, or simply upgrading to a home that better suits your lifestyle.

Whatever your reason, ensure that these benefits outweigh the costs of upgrading. As a second-time buyer, you might need to budget for additional costs that were not applicable the first time round, such as legal fees from selling your home.

On top of the flat’s price, these costs can also eat into your savings for the future, so make sure the home upgrade does not come at the expense of your retirement and long-term financial security.

2. Upgrading your home might not be a straightforward process

House hunting takes time

Finding a suitable property for your next home can be a lengthy process. It may take months of house viewings before you find one that ticks all your boxes and proceed with the purchase.

A good way to begin your house hunt is by browsing available flats on the HDB Flat Portal, or other property listing platforms if you intend to upgrade to a private property.

Here are some things to note before you buy your next home:

• For resale flats, check the flat’s condition and whether the remaining lease can last the youngest buyer till age 95.
• For Build-To-Order (BTO) flats, expect a longer wait for key collection — typically around three to five years, depending on the project’s completion time.
• For private properties, only bank loans (no HDB loans) are available and CPF usage limits differ.

You can also use the Home Purchase Planner to help estimate a budget for your next home, based on your income, savings, and expenses. Additionally, the planner can factor in the sales proceeds from selling your current home and enables you to visualise the impact of your home purchase on your retirement.

Understand where your sales proceeds go

It’s natural to think you’ll get substantial cash proceeds from selling your current flat. However, these sale proceeds are first used to pay off any outstanding housing loan and refund the CPF amount previously withdrawn. This could leave you with less than expected to use for your next home purchase.

If you have used your CPF savings to pay for your current flat, you will need to refund the CPF principal amount withdrawn and its accrued interest, including any housing grants received.

If you are below age 55

The refund will be credited to your Ordinary Account (OA), which you can:

• use to buy your next home;
• leave in OA to earn risk-free interest; or
• transfer to your Special Account (SA) for higher retirement payouts.

If you are above age 55

The refund will be first used to top up your Retirement Account (RA) to your Full Retirement Sum (FRS).

Stay prepared for life's surprises

Unexpected situations such as sudden illness or job loss can quickly strain your finances. Without a steady income, you may not be able to pay off your new home mortgage. 

In addition, being part of the sandwich generation supporting both your ageing parents and growing children can add to the financial pressure when buying your next home.

Be sure to assess your finances and existing commitments before you start the home upgrading process! If you’re unsure where you might be financially in five years’ time, overleveraging on a home upgrade now could put you in a tough position in uncertain conditions.

3. Factor in your retirement needs

Upgrading to a new home may feel manageable now, but it can affect your finances and retirement needs in the long run. 

While the Home Purchase Planner helps you see how a major financial commitment like buying your next home impacts retirement, it’s also important to take steps to rebuild and grow your savings.

To ensure you have enough for your golden years whilst upgrading, building your retirement income is still possible by making small and simple adjustments.

If you used your OA savings to buy your next home and can comfortably afford it, you can also consider making a Voluntary Housing Refund as a last resort to boost your retirement savings. This puts money back into your CPF account to earn interest, helping your CPF savings grow so you can receive higher or longer payouts in your golden years.

Upgrade on your own terms

The idea of upgrading to a new home may seem exciting and within reach, but don’t forget to think about why you are upgrading, whether you are prepared for the complex process, and how the home purchase can impact your retirement needs. If there’s no rush–or need–to upgrade, make the move only if it works for your financial situation.

If you do go ahead and upgrade to a new home, planning early goes a long way. Knowing how the home buying and selling process works and the implications involved helps you avoid overleveraging and upgrade with greater confidence

When you’re ready, use the Home Purchase Planner to plan for your next home purchase with retirement in mind. This way, your new home does not become a source of financial stress or compromise your future years.

Information in this article is accurate as at the date of publication.