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Use of CPF for Loan Repayment

Planning ahead is crucial for retirement as it will help give you a peace of mind. 

Understanding CPF rules

Familiarising yourself with CPF rules can aid in your financial planning for retirement. Find details on how you can use your CPF funds to repay your housing loans after age 55.

Change in CPF contribution

To enable you to save more for retirement and healthcare needs, the proportion of CPF contributions that gets channeled into your Ordinary Account drops progressively from age 35. You may need to top up your monthly loan repayment in cash when your monthly Ordinary Account contribution is reduced. 

If you continue to work after age 55, you should take note that your monthly CPF contributions do not go directly into your Retirement Account. Instead, the contributions will continue to be channeled into your Ordinary Account, Medisave Account, and Special Account.

Using CPF to repay housing loans after age 55

Retirement Account (RA)

When you reach 55, your Retirement Account will be created, first using savings from your Special Account, followed by savings from your Ordinary Account, to meet the Retirement Sum applicable to you. You will automatically be included in the CPF Lifelong Income For The Elderly (CPF LIFE) Scheme, which is a CPF life annuity scheme that provides CPF members with a monthly pay-out for life, if you meet the criteria.

You can use your RA savings above your Basic Retirement Sum (which is half of the Full Retirement Sum) applicable to you for housing loan repayments. This excludes top-ups and accrued RA interest.

For example, if you turn 55 and your applicable Full Retirement Sum is $176,000, you can use the amount in excess of $88,000 (your Basic Retirement Sum, excluding top-ups and accrued RA interest) for your housing loan repayments.

Ordinary Account (OA)

Any balance that remains in your OA can be used for housing loan repayments. If you continue to work after 55, you can use the monthly contributions that go to the OA to service your mortgage, even if you have not met your applicable Retirement Sum.

However, housing withdrawal limits set by CPF may apply. This is a safeguard against overspending on housing loan repayments at the expense of your retirement savings.

Find out more about how you can use your CPF for housing.

Reserving OA Savings for Housing

If you need to continue using your OA for your housing payments after age 55, you may apply to reserve your OA savings for this purpose before they are transferred to your RA. However, this means the retirement sum set aside in your RA will also be lower.

6 months before your 55th birthday, CPF Board will send a "Reaching 55" package to advise you on your withdrawal options and the changes to your CPF account when you reach 55. To reserve some or all of your OA savings, please log on using your SingPass to my cpf Online Services to submit your request.

Do note that CPF Board will transfer any remaining reserved OA savings to your RA when any of the following events takes place:

  • there are no payments made for your property for 6 months
  • you have not started using your CPF savings towards the property for 5 years
  • your property is sold
  • when the purchase of the property stated in the form is aborted.

Find more information on reserving OA savings for housing.

Early Repayment of HDB Loan

Alternatively, you can consider making partial or full redemption of your outstanding housing loan before you reach 55. You are allowed to use savings from your Ordinary Account, but do take note tha housing withdrawal limits set by CPF may apply.

Find out more about how you can make a partial capital repayment or redemption of HDB housing loan.