Using CPF Savings

No CPF can be used if the remaining lease of a property is less than 30 years.  A property owner is eligible to use his CPF for the property is his age plus the remaining lease of the property is at least 80 years. The maximum amount of OA savings you can use is capped at a percentage of the property purchase price or the value of the property, whichever is lower.

You may use your CPF savings to pay for part of the property and to service the loan. But there is a cap to the amount of CPF savings you can use if you are taking a bank loan.This cap is known as the CPF Withdrawal Limit and is currently 120% of the Valuation Limit of each property. The Valuation Limit is the lower of the purchase price or valuation at the time of purchase. As an example: if the purchase price of an apartment is $300,000 and its valuation is $330,000, the Valuation Limit will be $300,000 and the Withdrawal Limit is $360,000.

Refer to the CPF Board website to understand how CPF rules will affect your ability to make the mortgage repayments when you turn 55.

If you have already used CPF for a property and wish to use CPF for your second property, you can only use the excess CPF Ordinary Account savings for your second property after setting aside the current BRS. The total CPF allowable for your second property is also capped at 100% of the Valuation Limit.

CPF Board has calculators to help you estimate when you will reach your housing limits. Do refer to the CPF Board website to work out your CPF Withdrawal Limit.

Once you have reached the Withdrawal Limit, you will not be allowed to use further CPF savings, and you will need to pay the remaining home loan in cash. Check your repayment schedule to find out how much cash you need to use and the period of time over which you will need to pay cash.

CPF savings can only be used for properties built on freehold or leasehold land with a remaining lease of at least 30 years provided the remaining lease can last you up to at least 80 years old.

For more information, please refer to the CPF Board website.

#Including the amount withdrawn for investment. For bank loan, you can only use CPF up to CPF Withdrawal Limit.

Source: MoneySENSE