What Is A “Negative Sale”?

A negative sale is a situation where a homeowner sells their property, but they do not get any cash from the sale.

This happens when the outstanding loan amount and the accrued interest on CPF used for the down payment, monthly instalment, and buyer stamp duty are more than the sale price of the property.

Let’s take an example of a homeowner who bought a house for $600,000.

10 years later, they decide to sell at $700k.

This means that they will at least get back some cash since they sold at a profit right?

Not quite so.

Let’s take a closer look at how using CPF to pay for a home can lead to a negative sale situation.

Assuming they bought a house for $600,000 using a bank loan and CPF savings, they would need to put down 5% of the purchase price in cash, which amounts to $30,000. The remaining 20% of the purchase price, which is $120,000, can be paid using CPF. Additionally, they would also need to pay buyer stamp duty, which amounts to around $12,600.

Assuming a 75% loan-to-value ratio, their loan amount would be $450,000.

With an interest rate of 4.5% and a loan tenure of 25 years, their monthly installment would be around $2,500. If they use your CPF savings to pay for the monthly installment, they would be using around $30,000 worth of CPF savings every year to pay off their loan.

Now let’s fast forward 10 years. Suppose they decide to sell their home for $700,000. The first amount that would be deducted from the sale price is the outstanding loan amount, which would be around $325,000 after paying off the loan for 10 years. Additionally, they would need to refund all their CPF savings used for the home, including the accrued interest of 2.5%. This is where the problem lies.

$700,000 (Selling Price) 
– $325,000 (Outstanding Loan)
– $510,647 (CPF + accrued interest)
= -$135,647

As you can see from the above calculation, this means the homeowner will not get any cash from the sale and will still have a shortfall of $135,647. To avoid a negative sale, the homeowner needs to sell the property for at least $835,647 or more

Some people may think that the CPF board will waive away the CPF return shortfall of $135,647, and they do not have to use cash to pay back to their CPF OA. Besides, they can also use the amount that goes back into their CPF OA to buy their next house.

However, negative sales affect homeowners in two ways.

Firstly, those who need cash urgently may not be able to get any cash from the sale, even if they sell their property at a higher price than the purchase price. Furthermore, for the next house that you decide buy, any cash that you need to fork out has to be from your own pocket.

Secondly, homeowners who use their CPF to pay for their property may lose out on the 2.5% per annum accrued interest that could have been earned if the money was left in their CPF account.

For example, as per the above calculations, if they did not use the money in their CPF OA to buy and finance their house, 10 years later they will have $510,647.

However because they used their CPF funds to buy a house… they lost $135,647. This $135,647 is actually their money!

A loss of $135,647 is quite substantial isn’t it?

That said, negative sales are rare in the case of HDB Build-To-Order flats. They are typically priced at a subsidised rate making them less prone to negative sales.

However, this is not the case for HDB resale flats, where negative sales are more prevalent.


In conclusion, using your CPF savings to buy a house is a viable option, but it is crucial to understand the risks involved and the long-term impact it can have on your finances.

Homeowners should consider whether they will end up in a negative sale situation that could affect their future plans.

Therefore, it is essential to assess your financial situation carefully and ensure that you plan and make informed decisions to avoid or minimise negative sales situations.

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?
Find out more by clicking HERE


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