How To Pay Back Your CPF Housing Loan


Using CPF housing loans, Singaporeans can borrow from their CPF Ordinary Account (OA) to buy property.

What this means is that you can use your CPF OA savings to pay off your housing loan. This makes it easy for you to raise the downpayment you need when buying a home.

However, you will need to pay back the CPF savings you used to purchase a property and the interest the money would have accrued.

This article will help you understand how to pay back CPF housing loan, and the repayment process, as well as the various methods of repayment.

Why You Should Make A Voluntary CPF Loan Refund

A voluntary CPF refund involves returning the money you borrowed from your CPF without having to wait for the sale of the property.

In most cases, Singaporeans wait until they sell the property they had bought with CPF funds to refund the money. On the contrary, a voluntary CPF refund can be made before you sell the property.

We look at the main benefits of making a voluntary CPF loan refund and why you should know how to pay back CPF housing loan.

You Will Have More Retirement Funds

The more funds you return to your CPF OA, the more money you will have to cater for retirement.

If you are below 55 years old, any voluntary refund goes to your CPF OA. Consequently, if you are over 55 years old, any voluntary refund you make goes to your CPF Retirement Account (RA) to meet your Full Retirement Sum (FRS).

Reduce The Amount You Need To Refund To CPF When You Sell Your Home

When you sell a property and you borrowed from your CPF to buy it, you need to refund your CPF savings from the proceeds.

On selling such a property, you will need to pay off any outstanding loans that relate to the property. You will also need to refund the money you took from the CPF OA account.

A voluntary refunding of the money reduces the amount you need to pay back to your CPF account. When refunding the amount, you have to return the principal and the interest, which compounds annually. The current interest rate is 2.5% per annum.

The longer you stay with the money, the more you will have to refund. This means when you sell your home, you may end up with negative cashflow.

It is therefore better to refund the money borrowed from your CPF account in the shortest time possible. Don’t wait until you have sold your property.

If you end up with negative cashflow, CPF will write off the additional amounts.

In other words, you will not have to fork out cash from your pocket to pay the CPF funds. However, this only happens if you sell your property at or above market value.

You Can Reuse Your CPF OA Funds For Other CPF Schemes

On returning the CPF funds, you can use the money on other CPF schemes. Other CPF schemes are as follows:

Ordinary Account: The OA savings can be used for housing, investment, and education.

Special Account (SA): This account caters to retirement income and investment towards your retirement.

MediSave: The money in this account can be used for hospital expenses, approved outpatient medical care, and approved medical cover.

Refunding the CPF funds gives you a buffer as you can use the refunds to cater for other expenses such as your medical, renovation, or education needs. Plus, you can build up your retirement savings.

You Will Have More Cashflow When You Sell Your Property

Accrued CPF interest will eat into your cashflow when you sell your property. A voluntary refund will mean you reduce the amount of accrued interest you pay.

You don’t have to use your proceeds to refund the CPF savings.

Grow Savings To Purchase Your Next Home

Your CPF savings earn you an interest of 2.5% per annum, which is better than most savings and deposit accounts.

By repaying the borrowed amounts, you will have more money in your CPF savings account. This will make purchasing your next property easier as you will have enough money that you can use for the next purchase.

How Much Voluntary Housing Refund To Make

CPF funds are meant for your retirement. As such, any amounts withdrawn from the fund must be returned.

Those who use the CPF amounts to pay for their property must refund the amount borrowed. You will have to pay the principal amount, the interest that the borrowed amount would have earned, and any grant given.

In case the grant given is more than $30,000, part of the money returned goes to the CPF SA and the MediSave account.

You can use any amount refunded to purchase your next home. Here is an illustration of the amount you are expected to refund to CPF.

Selling price of your property: $480,000

Outstanding bank loan: $175,000

Less amounts borrowed from CPF and accrued interest: $225,000

Remaining sale proceeds: $80,000

This example shows you will be left with $80,000 in hand. If you manage to pay the CPF amounts early enough, you will reduce the interest accrued. You will have more cashflow after you sell your property.

If you sell your home at a price below the market value and the amount, you need to pay the CPF amount you borrowed, plus the accrued interest.

This means you will need to look for cash elsewhere and pay the CPF amounts. Hence, the sooner you pay back the CPF funds, the better for you.

How To Make A Voluntary CPF Refund

Paying back the money you borrowed from your CPF OA savings is easy. This section explains how to pay back CPF housing loan.

  • Start by logging into the CPF website using your Singpass
  • Search for My Statement, then go to the section and tap on “Property”

After tapping “Property”, you will be able to see the amount you borrowed and the interest that has accrued. Note down the amounts and head to the refund section.

  • Click on the “My Request” menu and then “Property”. Under this section, you will see how to pay back CPF housing loan with cash.
  • Fill in the amount you noted and then select the payment mode you want to use. You can choose to pay either through PayNow or eNets. Make sure the PayNow or eNets limit allows you to pay the amounts you owe.

Alternatively, you can find out how to pay back CPF housing loan using the CPF mobile app. Here is how you can do it:

  • Download the CPF mobile app
  • Log in to the CPF app using your Singpass
  • Look for the services menu and tap on “Voluntary Housing Refund”

It takes approximately five days for the money to be refunded to either your CPF OA or RA.

Should You Do A Voluntary CPF Refund?

The question of whether you should make a voluntary refund or not depends on your circumstances. A voluntary CPF refund is ideal in the following situations:

  • You have cash on hand and realise no investment option can earn you a higher return than the CPF. If you have free cash and you don’t have high-interest debts or a better investment option, then CPF will earn you a decent rate of interest.
  • Those who are over 55 years old should consider refunding the money. If you are 55 years old or older, the refunds you make go to your RA. This will ensure you meet the FRS.

That said, CPF refunds may not be a priority for those who have no intention of selling their property yet. If you have no intention of selling your property or buying another, the CPF refund may not matter at this point.

Ensure You Know How To Pay Back CPF Housing Loan

We hope you now know how to pay back CPF housing loan. As you can see, paying back your CPF housing loan is not as difficult as it may seem.

With a few simple steps, you can ensure that you are on track to refund your CPF loan in full. We hope that this article has given you the information you need to know how to pay back CPF housing loan.

It is important that you refund your CPF loan as soon as possible. Katong Credit is the partner you need to help with this.

We are a licensed money lender that offers affordable loans quickly and at a low interest rate.

Contact us now or apply for a loan today to pay off your CPF housing loan.