CPF Accrued Interest On Your House: What You Need To Know

Have you ever wondered how much you’ll have to pay back from your CPF when you sell your house? Well, if you’ve used your CPF Ordinary Account (OA) funds to finance your property, then you’ll need to pay back the principal amount plus accrued interest.

Although it may seem like a burden to contribute 20% of your salary to your CPF, it can come in handy during times of need, such as paying for your child’s education or monthly insurance premiums. And while using your CPF to finance your home may seem like a good idea at the time, it’s important to remember that you’ll need to repay the funds with interest when you sell your property.

Think of the government as your loving and prudent parents – they want to make sure you have enough for retirement. So, if you’ve used your CPF funds to pay for your house, you’ll need to pay back the principal amount plus accrued interest when you sell your house to ensure that you have enough for your future.

Don’t let the thought of paying back your CPF deter you from buying a home. Instead, be aware of the CPF accrued interest on your housing loan and plan accordingly for your future.


Understanding CPF Accrued Interest on Housing Loans in Singapore: What It Is and Why It Matters

When you use money from your CPF Ordinary Account (OA) to pay for a house in Singapore, you have to pay back the same amount plus an accrued interest when you sell the property. While it may seem like a convenient way to finance your home, there’s a catch.

The accrued interest is in place of the funds that would have accumulated if you hadn’t used your CPF OA to pay for your house. This means that you’ll have to pay back more than what you originally withdrew.

Even if you received housing grants to help with the purchase, you’ll still need to pay back the grant amount into your CPF OA. It’s important to be aware of these factors when planning for your home purchase and future finances.

While using your CPF OA to pay for a house can be helpful, it’s important to remember that it’s not free money. Plan ahead and consider the accrued interest and repayment requirements to ensure that you have enough for your retirement.


Understanding Which CPF Funds You Need to Repay for Your House in Singapore

If you’ve used CPF funds to finance your home in Singapore, you’ll need to repay the amount with accrued interest when you sell the property. But which CPF funds do you need to repay?

It’s simple – any CPF funds you’ve used for your home in any way must be repaid.

These include:

  • Initial downpayment for HDB flat/private property
  • Stamp duties and legal fees
  • Monthly housing loans and lump sum payments
  • Housing grants received
  • Home protection scheme premiums (for HDB flats only)
  • Accrued interest for all the above


How to Calculate CPF amount plus Accrued Interest Used for Your House

When you sell your property in Singapore, you’ll need to pay back any CPF funds you’ve used to finance your home with accrued interest. But how much do you need to pay back?

The total amount you’ll need to repay is the principal amount you took out to finance your home plus the accrued interest, which is calculated at a rate of 2.5% per annum and compounded annually. The interest is calculated monthly from the time you took out the funds until you sell your property.

If you want to save on accrued interest, you can choose to make voluntary payments before you sell your home, up to the principal amount. This will help reduce the amount of interest that will continue to accumulate until you sell your property.

When you sell your property, you’ll need to make a full repayment of CPF funds if the sales proceeds exceed the amount you owe. If the sales proceeds are not enough to cover the full CPF amount, you do not need to make a payment for the shortfall as long as the house is sold at market value. Any option fees received in cash by the buyer will be considered part of the sale proceeds and must be returned to their CPF account.

While it may seem complicated to calculate the accrued interest, you can easily view the amount online through the CPF Online Services under “My Statement.” 


When must I pay back the CPF funds Used with Accrued Interest?

If you’ve used your CPF funds to finance your house, you’ll have to pay it back once the property is sold. However, you can choose to make an early voluntary housing refund without incurring any penalties. 

The voluntary refund can be made in partial or in full, but it’s capped at the principal amount with accrued interest. This means that you can’t make additional top-ups to your CPF OA if the amount exceeds the principal amount you took out to finance your home.

To apply for a voluntary refund, simply submit an application online or through the myCPF mobile app. It’s always better to plan ahead and take care of your finances so you won’t have to worry about accumulated interest or penalties in the future.


Case Study Example: Ms. A

Let’s take a look at a real-life scenario to better understand how CPF funds work. Meet Ms. A, who used S$200,000 from her CPF Ordinary Account (OA) to pay for down payment & stamp duty and received a S$50,000 housing grant under the Enhanced CPF Housing Grant (EHG) from the government in January 2021.

She also used $1000 from her CPF OA to pay for the monthly housing instalments

After the minimum occupancy period (MOP) of five years, Ms. A decides to sell her house in January 2026. Here’s the catch – she has to return the CPF funds with the accrued interest at a prevailing rate of 2.5% per annum, which is compounded yearly, for the five years she has used the money.

So, how much does Ms. A have to pay back to her CPF accounts?
The total amount she needs to pay back is $347,090.82



Now there are many scenarios where the numbers differ and usually calculations are done on a case by case basis. 

This is just a simple example to help you understand that there is more than meets the eye when it comes to the CPF accrued interest topic that everyone seems to be talking about. 

The fact is you don’t even need to know how to calculate as you can see the amount at one glance through your CPF account statement. 

More importantly, it is what you decide to do after finding out the CPF amount that you have used plus accrued interest.

If you are planning a move or upgrade and wish to assess your financial situation or have a safe property plan for the future, do contact us for a non-obligatory sharing session.

Wondering if it’s the right time to buy, sell, or wait it out?

These decisions can be tough, and there isn’t a one-size-fits-all answer.

But don’t worry, that’s where we come in!

At Let’s Talk Property, we are here to provide clarity to you and guide you step-by-step in your real estate journey!

Whether you’re a first-time buyer or a seasoned investor, we hope to partner with you to create a clear plan that’s tailored to your unique needs and provide objective guidance to help you make the best real estate decision.

So, if you’re looking to buy, sell, or just want to chat about your real estate options, we’re here for you!

With our extensive on-the-ground experience, you can trust us to provide a top-notch real estate experience that’s both informative and stress-free.

Do contact us for a sharing session!

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Best Regards,
Let’s Talk Property
Dillon @ 9389 1992

P.S. HDB Owners, with so much UNCERTAINTY, Should you BUY, SELL or WAIT?
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