CPF Savings for Mortgages and Housing Purchases After 55

Can You Use Your CPF Savings to Pay for Housing Loans After Turning 55?

When you turn 55, your CPF savings shift into a new phase. It's essential to know how to maximize these funds for housing and mortgages. This knowledge can help you make the most of your retirement years.

CPF savings are divided into three accounts: Ordinary Account (OA), Special Account (SA), and MediSave Account (MA). At 55, a portion of your OA and SA will be transferred to a new account called the Retirement Account (RA).

Can You Use Your CPF Savings to Pay for Housing Loans After Turning 55?

Continuing to Use Ordinary Account (OA) Savings

Upon turning 55, a significant change occurs: a Retirement Account (RA) is created. Savings from your Special Account (SA) and OA up to your Full Retirement Sum (FRS) are transferred to your RA. Despite this transfer, you can still use your OA savings for your housing loan repayments under certain conditions.

Reserving OA Savings for Housing Loan Repayments

To continue using your OA savings for housing loan repayments after 55, you need to take action before your 55th birthday:

Reserve Your OA Savings: You can reserve a portion of your OA savings specifically for housing loan repayments. This reserved amount will not be transferred to your RA, allowing you to continue using it for your housing loan.

Application Process: Submit your request to reserve your OA savings via Singpass. Ensure you apply within six months before your 55th birthday, allowing at least five working days for processing. 

Important Considerations

While reserving your OA savings is beneficial for housing loan repayments, there are important factors to consider:

Monthly Payouts and Transfer to RA: If you start receiving monthly payouts under CPF Life or the Retirement Sum Scheme and have not set aside your FRS, your reserved OA savings will be transferred to your RA. This transfer boosts your RA savings and enhances your monthly payouts.

Refund Requirements Upon Selling Your Property

When you sell your property, you are required to refund the following to your CPF savings:

1. The principal amount (P) withdrawn to pay for the property
2. The accrued interest (I)
3. If you pledged the property to make up your FRS, this amount will need to be refunded together with the P+I.

CPF savings are primarily meant for your retirement needs. Therefore, any CPF funds utilized for purchasing a property will reduce the amount available for your retirement. As such, all or part of the refunded amount will be used to top up your RA to your FRS. Any balance will be paid to you in cash. You can also choose to retain the balance housing refund in your CPF Account(s) instead.

Reusing Ordinary Account Savings

You can reuse your OA savings to purchase your next property, subject to applicable housing rules and limits. It's important to consider that withdrawing your RA monies above your Basic Retirement Sum (BRS), excluding interest earned, government grants, and any top-ups made under the Retirement Sum Topping-Up Scheme, for personal needs if you own a property will reduce your retirement income.

To find out the Full Retirement Sum (FRS) applicable to your age group, you can refer to our blog Using CPF Savings for Housing Loans After 55: For HDB Flat Sellers

Conclusion

Using CPF savings for housing and mortgages after 55 is possible with proper planning. By reserving your OA savings and understanding the refund requirements upon selling your property, you can continue managing your housing loan repayments efficiently. Stay informed about the application process and eligibility conditions to make the most of your CPF savings.

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