Remember the days where you empty your CPF Ordinary Account (OA) to purchase your HDB flat, the years your CPF was deducted for your monthly mortgage loan? You may already know that you don’t need to be cash rich to be a homeowner. Depicting heaven for most HDB buyers.

Note: It is compulsory that CPF funds and grants that are used to finance a property must be repaid back when owners sell their flat. Interest will accrue on the amount of CPF savings that you have used for your property. It is required to refund the accrued interest together with the CPF principal amount withdrawn when you sell your property.

Currently, the CPF interest is ​compounded at 2.5% per annum​, and HDB interest is compounded at 2.6% per annum. These accrued interests can snowball to a huge amount. Does it mean that the longer you hold your flat, the higher the accrued interest? Yes!

After refunding your CPF OA, you may find that you have less cash on hand. What if your HDB flat results in a negative sale? This could largely interfere with your retirement plans.

If you are an existing HDB homeowner, and would like to find out more about your actual cash proceeds, visit this site to find out more: HDB Sales Proceed Calculator

Are you still uncertain about how CPF accrued interest will take a toll on your cash proceeds? What happens if your HDB sells at a loss?

​My name is Jen Tan, don’t be afraid to ask me any questions! I would love to hear from you soon.