BEWARE: CPF Accrued Interest

[catlover24]

https://www.99.co/blog/singapore/hdb-sale-proceeds-cpf/

If you buy a resale HDB flat today and take a CPF Family Grant of $50,000 for your purchase, your principal plus accrued interest on this grant amount alone would be $107,991.81 after 30 years — more than double of the grant amount you originally took!

There's a chart in the article that shows the effects of CPF Accrued Interest too, quite shocking.

So, if you're confident your property will appreciate, the lesson is to avoid grants and pay mortgage installments using CASH intead?

 

[fotoudavid]

Unavoidable to use CPF... Grant plus CPF accrued interest will take out all money

 

[Wk7777]

https://www.99.co/blog/singapore/hdb-sale-proceeds-cpf/



There's a chart in the article that shows the effects of CPF Accrued Interest too, quite shocking.

So, if you're confident your property will appreciate, the lesson is to avoid grants and pay mortgage installments using CASH intead?

erm.... if u r eligible to get a grant of $50K, why should you reject the handout??
anyway nowadays, people don't stay in the same HDB flat for 30 years anymore...

if you are so worried about the accrued interest of the CPF Grant, you can choose to sell your house after MOP. Then this $50K + accrued interest goes back into your CPF for your next property purchase...

If you are really looking to stay for 30 years kind...Alternatively, you can check with CPF Board after the purchase, tell them that you will like to refund the CPF monies paid from your OA, they will tell you an amount + any accrued interest to date, then you give them a cheque of that amount.....

https://www.cpf.gov.sg/Assets/members/Documents/FORM_HSDVR.pdf

TADAH, you get extra money in your CPF already...

 

[kindaichi83]

why would you not want the grant

it is credited back to your cpf account for future use, whether it is to buy another house or for your retirement account

senseless article

 

[Sakagamii]

end up all go back to ur cpf acct wad. wad is the article trying to say

 

[Gixxerfied]

Worry only if you planning to sell your house.

If you planning to die in the same house like me then dont bother about this but instead on how fast you can clear the mortgage before you get restricted on using your O/A.

 

[endlssorrow]

Grant interests should keep at least 10% to stop people from really buy and sell to make money

 

[Storm7979]

The accured intrest is eventually going back to ur cpf ma.
If the concern is eating into the cash proceeds when selling then if i use cpf to pay and accumulate my cash, isn't it the same?

 

[XGZ1503]

Worry only if you planning to sell your house.

If you planning to die in the same house like me then dont bother about this but instead on how fast you can clear the mortgage before you get restricted on using your O/A.

Let say when reach 55yrs and OA have more than min sum, will we still be required to return all the $$ to CPF after we sell the flat?

 

[windwaver]

https://www.99.co/blog/singapore/hdb-sale-proceeds-cpf/



There's a chart in the article that shows the effects of CPF Accrued Interest too, quite shocking.

So, if you're confident your property will appreciate, the lesson is to avoid grants and pay mortgage installments using CASH intead?

Do you really understand what's accrued interest?

What's the big worry?

 

[GeraldineT]

Let say when reach 55yrs and OA have more than min sum, will we still be required to return all the $$ to CPF after we sell the flat?

if u reached 55 and ur OA + SA account is more than retire minimum sum, u can chose to cash out a certain amount.

if u haven't reach 55 and u used ur OA every month for the HDB contribution, when u sell the house, the $$ would be what they say in the article. however if ur monthly installment u use cash to pay, then u will get back more cash.

 

[kindaichi83]

Worry only if you planning to sell your house.

If you planning to die in the same house like me then dont bother about this but instead on how fast you can clear the mortgage before you get restricted on using your O/A.

but if u take the govt money and then used it to buy private ok what

after all even if u pay the accured interest back to cpf, you can still use it to offset the 20% downpayment

not take is stupid

 

[henrylbh]

I may more than glad that they want me to return CPF used plus interest when selling my house. Else the money with me will earn pittance from the bank. The money goes back to CPF earns min of 2.5% and can be withdrawn in any amount and at any time from 55, if one meets BRS which is achievable for most. The money returned can still be used to buy the next property shares etc.

 

[catlover24]

I may more than glad that they want me to return CPF used plus interest when selling my house. Else the money with me will earn pittance from the bank. The money goes back to CPF earns min of 2.5% and can be withdrawn in any amount and at any time from 55, if one meets BRS which is achievable for most. The money returned can still be used to buy the next property shares etc.

Either bank or CPF? That's a false dichotomy right there. If you can't be bothered to research on investment vehicles or participate in them, if you can't be bothered to take charge and responsibility of your hard-earned money, then that's your businesses, but don't treat everyone else as idiots...

 

[Gixxerfied]

but if u take the govt money and then used it to buy private ok what

after all even if u pay the accured interest back to cpf, you can still use it to offset the 20% downpayment

not take is stupid

不拿白不拿。。。tio boh???

my grant only 15k before all the changes to shg a few months after i apply for my flat..

Apply May 2013 launch. Aug 2013 NDR changes came out and only backdate to july 2013 launch..

 

[henrylbh]

Either bank or CPF? That's a false dichotomy right there. If you can't be bothered to research on investment vehicles or participate in them, if you can't be bothered to take charge and responsibility of your hard-earned money, then that's your businesses, but don't treat everyone else as idiots...

For majority it's in the bank or spent. For those who invest, majority is adverse or got burned. CPF is for the good of majority though some can do better than CPF. For those who think they are better off with money in hand instead of CPF, they can still use the money in CPF for investment, though the option is not that great.

 

[windwaver]

For majority it's in the bank or spent. For those who invest, majority is adverse or got burned. CPF is for the good of majority though some can do better than CPF. For those who think they are better off with money in hand instead of CPF, they can still use the money in CPF for investment, though the option is not that great.

Yeah, most people I know didn't make anything out of what they withdrew from CPF. Maybe it'll change since the younger generation is more market savvy than the baby boomers.

Nevertheless, it is much more straight forward for people who are not into investing to just leave it in CPF.

 

[theblueark]

Very happy to see this thread full of well informed ppl with good understanding of CPF and accrued interest

 

[Forever84]

Don't understand what's the issue at hand... Lol

Unless u sold your house without enough to pay for the interest. Which in case you probably shouldn't have sold your house

 

[darknite84]

Dumb TS. Please dont take grant then. Let other smarter people take.

And to use cpf for housing payments depends on how hard you are able to make your existing funds work. If you are a savvy investor then by all means maximise your cpf usage and use the additional cash flow for something else. If someone dont really invest, and has spare cash, better to use cash to make installments. But honestly it's better to directly make partial or full repayment.