Using CPF is not free money. Every dollar of OA you spend on the home goes back with interest when you sell, so the real choice is between paying with CPF and paying with cash. Decide on purpose.
Know your three pots
Cash, CPF Ordinary Account (OA), and any grant or sale proceeds. Write down how much sits in each.
Plan the cash floor
With a bank loan, 5% of the price must be cash; the other 20% can be cash or OA. With an HDB loan the whole 25% can come from OA or cash.
Compare your loan rate with the OA rate
The OA earns 2.5% a year, plus 1% extra on the first $60,000 of combined CPF balances (at most $20,000 from the OA). OA money you use for the home must be paid back with interest at the OA rate. If your loan costs less than the OA earns, paying with cash and leaving OA money in the OA can come out ahead, if your cash has no better use.
Keep a safety buffer in the OA
CPF Board suggests keeping at least $20,000 in the OA with a bank loan. With an HDB loan you can choose to keep up to $20,000. It covers instalments if your income stops.
Mind the limits
CPF use is capped by the flat's valuation and a withdrawal limit, and anything you pay above the valuation must be cash. Check the figures for your property on your CPF Home ownership dashboard.
Aim to clear the loan before you stop working
The share of your pay that goes into the OA falls as you get older, so instalments get harder to cover from CPF. Plan to be debt-free before retirement.
Example: a $600,000 home, bank loan
The down payment is $150,000. How you split it changes the cash you need now and what flows back to your OA later.
| Approach | Cash now | OA used | Back to OA after 5 years* |
|---|---|---|---|
| Least cash Keeps your cash free, but uses the most OA | $30,000 | $120,000 | $135,769 |
| Balanced Some cash, some OA | $75,000 | $75,000 | $84,856 |
| Cash-heavy Needs the most cash, leaves your OA growing | $150,000 | $0 | $0 |
*The OA money used plus interest at 2.5% a year, compounded yearly, which you must refund to your OA on sale. This is a simplified illustration, not your CPF statement. It leaves out stamp duty, fees and loan instalments. Your Home ownership dashboard shows the real amounts.
Sources
- CPF Board: using your CPF to buy a home
- CPF Board: retain money in your OA if you are taking a housing loan
- CPF Board: CPF interest rates (OA 2.5% as of Q4 2026)
- CPF Board: HDB loan versus bank loan
Checked 13 Nov 2026. CPF rules change. General information, not financial advice: confirm with CPF Board, HDB or a licensed adviser before you decide.