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Paint a picture of the finances you need for your future home

13 Mar 2020 
SOURCE: CPF Board

Picturing a place that you can finally call your own? Before you start saving home decor ideas to your Pinterest board, your first move should be to plan the finances you need!

We’ve put together an easy guide to help you work out your finances and understand how you can tap on your CPF Ordinary Account (OA) savings and CPF Housing Grants to pay for your home!

Paint a picture of the finances you need for your future home

Set a budget for your home

First and foremost, consider the property price and housing loan that you can realistically pay for, based on your household income and ability to service the loan. To figure this out, you can try using Our First Home Calculator

This handy tool takes into account your income, CPF balances, and monthly expenses to estimate a budget for your future abode.

Find out the CPF housing grants that you are eligible for

There are CPF Housing Grants available to help you manage the costs of owning a home! 

Here’s a quick glance at the different grants that you can tap on, assuming that you are applying with your fiancé or fiancée, and you are both Singaporeans and first-time applicants. If you are planning to buy a flat, refer to HDB’s website for the full list of grants and eligibility conditions for new flats and resale flats

Paint a picture of the finances you need for your future home

Want to learn more? Try putting your knowledge about housing grants to the test with this qui​z.

Review the housing-related costs that are payable in cash or with your OA savings

Understanding the housing expenses that are payable with CPF or in cash will help you budget for your future home. Here are the costs you should keep in mind:

Costs payable with CPFCosts to be paid with cash only
  • Downpayment for property purchase
  • Housing loan
  • Stamp duty and legal fees
  • Home Protection Scheme premiums
  • Renovation
  • Property tax
  • Application and option fees
  • Utilities
  • Fire insurance
  • Service and conservancy charges or maintenance fees

Plan how you would like to pay off the housing loan — with cash or your OA savings?

Whether you choose to use your OA savings or cash to service your monthly home loan instalments, it’s a good idea to weigh the pros and cons before making your decision.

Using your OA savings will leave you with more cash for expenses that are not payable with CPF, such as home renovations and day-to-day living expenses.

However, don’t forget that your CPF is not only meant for your housing needs, but also for your retirement as well! Therefore, when you use more of your CPF for your home, you’ll have less for retirement. 

Furthermore, you can now choose to set aside up to $20,000 in your OA when taking up an HDB loan, instead of using it all up. These funds could help with future mortgage payments in times of emergency, and if left unused, can grow at attractive interest rates of up to 3.5%* p.a. to get you better prepared for retirement! 

On that note, if you do plan to use your OA savings, remember that as you grow older, the amount of CPF contributions that are allocated to your OA will decrease. This could affect your ability to pay off your outstanding loans each month. That’s why it’s wise to work out your repayment plan from the get-go to ensure that you will have no issues servicing your loan. 

Now that you have a clearer picture of how​ your OA savings and CPF Housing Grants support your home purchase, you’re ready to map out your housing game plan!


*Including an extra 1% interest which is paid by the Government, on the first $60,000 of a member’s combined balances.  Read more about CPF interest rates here.

 

​Information updated as at 13/11/2020

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