Decision Guide
CPF or Cash for Your Downpayment?
Using CPF is not free money — you repay every dollar to your CPF with 2.5% accrued interest, compounded, when you sell. When CPF is the right call, when cash is, and the limits on how much CPF you can use.
By Ailsa JinCEA Registration Number R071279APropNex Realty Pte. Ltd.Published 2026-09-04
The minimum you must put down
Loan-to-value limit
- HDB loan
- 75%
- Bank loan (first housing loan)
- 75%
Downpayment
- HDB loan
- 25%
- Bank loan (first housing loan)
- 25%
…of which in cash
- HDB loan
- $0 — CPF OA can cover all of it
- Bank loan (first housing loan)
- At least 5% of the price
…the rest
- HDB loan
- CPF OA (or cash)
- Bank loan (first housing loan)
- 20%, in CPF OA or cash
The LTV shown is for a first housing loan within the tenure and age limits; a second loan, a long tenure or older age lowers it. Current as of September 2026 (HDB, MAS).
What using CPF actually costs
Accrued interest. CPF charges you 2.5% a year, compounded, on every OA dollar you used — from the day it left your account to the day you refund it on sale.
On sale, the price repays the outstanding loan first, then refunds your CPF principal plus accrued interest. Only the remainder is cash in your hand. Use a lot of CPF and sell early, and the cash can be thin.
It is not a loss. The refund lands back in your OA, still earning 2.5%, ready for the next home — as long as you did not actually need the money as cash.
If the sale price, after clearing the loan, does not cover the full CPF refund, you do not top up the shortfall in cash — provided you sold at market value. But you walk away with nothing, and any housing loan still outstanding is yours to clear.
How much CPF OA you can use
New HDB flat, HDB loan
- CPF OA limit
- The full purchase price, including the loan — no Valuation Limit
Resale HDB flat, HDB loan
- CPF OA limit
- Up to the Valuation Limit; beyond it only if your Basic Retirement Sum is set aside
Any flat or condo, bank loan
- CPF OA limit
- Up to the Valuation Limit, then up to 120% of it — and only with your Basic Retirement Sum set aside
Beyond those limits
- CPF OA limit
- Cash only
Valuation Limit = the lower of the purchase price and the valuation at the time of purchase (CPF Board).
A sensible split
Keep 6–12 months of expenses, mortgage included, in cash before you put anything extra into the flat.
Past that buffer, using CPF OA is reasonable — it would only earn 2.5% sitting there, which is exactly the accrued interest you will “owe”.
Paying more in cash to preserve CPF only wins if that cash is genuinely invested above 2.5% after tax — not just left in the bank or spent.
A voluntary housing refund later — putting cash back into CPF before you sell — stops the accrued interest compounding and leaves more cash on completion.