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CPF rule changes for HDB loans, flat buyers can now keep up to $20,000



To those of you wrapped in your BTO fantasy, here’s a piece of news you should know: flat buyers can now retain up to $20,000 each in their Central Provident Fund (CPF) when taking a loan from the Housing and Development Board (HDB).

Prior to this move, buyers could only apply for a loan only after fully utilising the balances in their CPF Ordinary Account (OA). According to HDB, this new initiative would allow flat buyers “greater flexibility in using their CPF funds”, such as retirement and monthly mortgage instalments.

Photo Credit: Channel News Asia

Sounds all good and enticing? Experts beg to differ.

While the new rule would indeed give potential flat buyers more leeway in handling their finances, there could be some risks of over-leveraging as this means future homeowners may have to take up bigger loans. What does this lead to? Higher monthly debt services.

Photo Credit: Channel News Asia

“The flip side of the policy is that buyers will have to take larger loan quantums and this adds to the costs of financing over the loan periods,” Associate Professor Sing Tien Foo from NUS told Channel News Asia.

Guess it’s about time to start saving up for that dream flat, kiddos.



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