Can I use CPF OA to pay more than 20% of purchase price

firsttimebuyer

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Can I use CPF OA to pay more than 20% of the down-payment of the purchase price?

I plan to use CPF OA to pay maybe 30% of purchase price.

Is that possible?
 
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robydjrsg

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Can I use CPF OA to pay more than 20% of the down-payment of the purchase price?

I plan to use CPF OA to pay maybe 30% of purchase price.

Is that possible?

I think it should be possible & sounds reasonable to reduce the loan amount.
 

simplelifez

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possible.
by mentioning 20%, I will assume u taking bank loan.

yup, you can pay more but cannot pay less.
 

firsttimebuyer

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possible.
by mentioning 20%, I will assume u taking bank loan.

yup, you can pay more but cannot pay less.

Lets say if I have $130K in my CPF OA, and my purchase price is $400K (resale flat).

can I take out $100K out of CPF OA? I was under the impression I must keep $20K in CPF OA.
 

hwmook

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Lets say if I have $130K in my CPF OA, and my purchase price is $400K (resale flat).

can I take out $100K out of CPF OA? I was under the impression I must keep $20K in CPF OA.

You can use any amount in CPF OA to pay for mortgage.
 

Ashton

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Definitely can, in fact it is ideal to lessen the loan amount.
My CPF cleared around 45% of my resale flat price.

Try to keep some in your OA for stamp duty and buffer.
For HDB loan, you can only keep 20k max in your OA.
For bank loan, you can keep any amount you want.
 

OneMantou

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Money in cpf generates more interest p.a (on compounded amount) than the interest rate paid to bank (based on decreasing principal remaining).. would it make sense to use larger amt of cpf right at the start, which also locks in the point that accrued interest starts computing?
 

Gymrat76

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Money in cpf generates more interest p.a (on compounded amount) than the interest rate paid to bank (based on decreasing principal remaining).. would it make sense to use larger amt of cpf right at the start, which also locks in the point that accrued interest starts computing?

Yup, I always keep a chunk in CPF which is generating 2.5% interest as not only do I need to return the money to CPF plus accrued interest when I sell my house, but I also lose out on the 2.5% interest PA that they offer. Since bank loan is hovering in the low 1% now, would make sense to take a larger loan then use CPF if/when bank interest>CPF interest
 

sgpropertyblog

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Can I use CPF OA to pay more than 20% of the down-payment of the purchase price?

I plan to use CPF OA to pay maybe 30% of purchase price.

Is that possible?



Yes, you can use more than 20% of ur CPF to downsize your loan amount..

if u r taking HDB loan, max u can keep aside is $20k, but u can also choose to wipe out all in ur OA

if u r taking bank loan, u can use watever amount in your OA..

having said that, current bank interest rates are very low, as low as 1.45% for HDB, so it would make more sense to take more loan and leave your CPF monies inside to 'grow' and also to slowly pay for ur mortgage every mth..
 

firsttimebuyer

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Yes, you can use more than 20% of ur CPF to downsize your loan amount..

if u r taking HDB loan, max u can keep aside is $20k, but u can also choose to wipe out all in ur OA

if u r taking bank loan, u can use watever amount in your OA..

having said that, current bank interest rates are very low, as low as 1.45% for HDB, so it would make more sense to take more loan and leave your CPF monies inside to 'grow' and also to slowly pay for ur mortgage every mth..

So let's say the HDB resale property price I am aiming for is $400K.

Can I wipe out my entire $130K (the full sum in my CPF OA), use another $100K in cash?

Then my down-payment is $230K.

The remaining $170K I take out a bank loan and the installments I pay out using CPF?
 

PropExpert

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So let's say the HDB resale property price I am aiming for is $400K.

Can I wipe out my entire $130K (the full sum in my CPF OA), use another $100K in cash?

Then my down-payment is $230K.

The remaining $170K I take out a bank loan and the installments I pay out using CPF?

For bank loan, max will be 75% of purchase price/valuation (whichever is lower). For the downpayment, as long as you fulfilled at least 5% mandatory cash portion, the rest you can use CPF/cash.

I think most here are advising you not to empty your CPF as by keeping it in your OA, it earns you a higher interest of 2.5% compared to bank interest rates from 1.4%. Also, by putting in all your CPF, you will incur the "accrued interest" immediately. When you sell off your property in future, you have to pay back this accrued interest yourself.

As for your cash downpayment, if you do not have any investment plans tat generate higher yield, by all means pay down as much as you are comfortable.

Lastly, yes, you can use CPF to pay your monthly installments as long as you have sufficient CPF in your OA to deduct.
 
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jinmuddy

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If I not wrong they will clean out all your OA first when buying house.
 

hwmook

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If I not wrong they will clean out all your OA first when buying house.

Only if you take HDB loan. Now they allow you to keep up to $20k. You can use OA to invest so that they cannot clear all.
 

bermudas

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For bank loan, max will be 75% of purchase price/valuation (whichever is lower). For the downpayment, as long as you fulfilled at least 5% mandatory cash portion, the rest you can use CPF/cash.
Actually, what is the whole idea behind this "5% cash" portion? I mean, if our CPF OA can cover the 25% or more.... why would there be a need for this "5% cash" portion?

Still can't wrap my head around this requirement.
 
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