How To Adjust Your CPF Payment For Your Housing Loan

Written by Shannon Wong on February 8, 2023

So you finally purchased your HDB flat – a moment that counts as a milestone in adulthood. Now you need to pay for your mortgage every month. 

Thankfully, this can be done using CPF to pay monthly installment. But at certain points of the duration of your housing loan, you will need to know how to adjust CPF payment for housing loan. 

In this article, we will provide information on the practical steps involved in how to use CPF to pay housing loan, how to adjust CPF payment for housing loan, when you should embark on this process, and some legal issues pertaining to CPF housing loan payment.  

What Is The CPF?

The Central Provident Fund (CPF) is essentially a compulsory saving scheme for Singaporeans. The funds can be used for housing, healthcare, and retirement. 

It comprises the Ordinary Account (OA), Special Account (SA), MediSave, and Retirement Account (RA). 

The CPF deductions made from your salary are mandatory and exclusive to Singapore citizens and permanent residents.

The contributions change with your age, but are the highest for those who are below 55 years old – amounting to 37% of the gross salary (including employee and employer contributions). 

In Singapore, the CPF is basically an untouchable fund until you reach the age of 55 and have amassed the full retirement sum (FRS). 

Although your CPF savings are intended to support you in retirement, there are circumstances when you can draw on your CPF, including medical emergencies and purchasing of a property.

Most Singaporeans will reach a point in their lives where they will begin considering if they can use their CPF to pay housing loan. After which, you will probably think about using CPF to pay monthly installment. 

There are various issues – such as accrued interest – that need to be considered before you consider how to adjust CPF payment for housing loan, but these can be easily understood. 

For instance, accrued interest is not as daunting as it sounds. As mentioned, your CPF was designed by the Singapore government to be used as a retirement fund that earns your CPF OA 2.5% interest as you advance in years.  

Hence, if you choose to withdraw from your OA to pay for a property, you will have to pay back this interest you would have otherwise accumulated had you not used the funds. 

In other words, the refund you make is not for the government – instead, you will be paying it back to your own CPF OA after selling the property to cover the interest that was originally intended to accumulate. 

Using CPF To Pay Monthly Installments

Before we delve into how to use your CPF to pay monthly installments, note you can only use your CPF savings to purchase a HDB flat, a residential home, or to build your residential property.

You could also use your CPF savings when making a downpayment for a housing loan, so long as the property is for residential use. The money can also cover stamp and legal fees, as well as Home Protection Scheme premiums for those looking to purchase HDB flats.

To start using your CPF savings to make the monthly installments for your home loan, make an online application.

The application process varies depending on the type of property you are looking to own and the type of loan you are repaying.

Paying For A HDB Flat Using An HDB Loan

For this type, there are two options.

  1. Apply Directly Through The HDB Website

  • Log in with your Singpass, go to My Flat and select Purchase Flat.
  • Click on Financial Info and go down to Related Services. 
  • Choose Commence/Vary Monthly CPF deductions.
  • It takes three business days to receive the status of your request from HDB.

Fill out a CPF withdrawal form at a HDB branch. The branches only attend to persons who have booked an appointment.

  1. Place Your Appointment On The E-Appointment System

After submitting your completed application, expect to hear from HDB within three to five working days.

Note that in either of these cases you must be insured under the Home Protection Scheme to be able to draw from your CPF savings.

Paying For A HDB Flat Using A Bank Loan

To request this, make an online application using your Singpass to log in to your profile. You must have been insured under the Home Protection Scheme. 

Ensure that you make your application more than five working days before the installment payment date.

Paying For Private Property With A Bank Loan

Begin your application by inputting your details in the eService online application.

  • Head to the CPF website and log in to your profile using your Singpass.
  • Click on my CPF, and at the bottom of the page, select My Requests.
  • Select Property and click on Use CPF for my Property.
  • Select the property type, enter the property details and click Next.
  • Click on Make Monthly Installments, then enter your bank details.
  • Confirm that your details are correct.
  • Submit your application.

Paying For A Private Property Without A Loan

For this, you must contact a lawyer who will fill and submit the application on your behalf.

Authorise the lawyer by signing the Letter of Authorisation, Declaration, Contract, and Agreement. 

However, the following conditions must be met in order for your CPF savings to be released:

  • All your legal documentation must be in order.
  • You must have paid the cash needed as a downpayment, which should be at least 5% of the purchase price or valuation price, whichever is lower.
  • You have cleared the options fees.
  • The balance of the purchase price that is above the property value after taking into account the housing loan payment and the CPF lump sum has been paid for.

How To Make Changes To Your Monthly CPF Deductions For Home Loan

If you decide to pay HDB loan using CPF, you may need to make adjustments to your monthly deductions. 

Having a clear idea of how to change CPF contribution for housing loan before you begin the process will save time and stress later on. 

As an overview, here is how to adjust CPF payment for housing loan in Singapore:

Access Your CPF Profile

Visit the CPF website and on the upper right side of the interface, choose to log in.

Use your Singpass to gain access, either using your mobile phone to scan the QR code or inputting your Singpass password.

Find The Home Ownership Page

After your successful login, the system will direct you to your portal.

Check the left side of your screen and click on my CPF, and then on Home Ownership. 

A new page will pop up, and on it, input your property address.

At the bottom of that page, find Monthly CPF Deduction and click on it.

If you’re purchasing a HDB unit, a prompt will direct you to the HDB website, and you can make the adjustments there.

If you’re buying a private residence, more on-screen prompts will follow, and you will be directed on what to do to make the changes.

Confirm And Submit

After making the needed adjustments, click Confirm and then Submit.

But make sure you read the terms and conditions first. It is useful to print a copy of the transaction for record purposes.

Why You Should Make Changes To Your CPF Housing Payments

Now that you know how to adjust CPF payment for housing loan, let’s look at when it may be necessary to do so. 

  1. At the age of 55, your CPF OA and SA will be merged to form your RA. This is actually the primary function of the CPF scheme, rather than using it for another purpose such as a HDB loan repayment using your CPF. 

The greater the amount that you have saved in your RA, the higher your CPF LIFE payments will be. In order to ensure the best quality of life during your golden years, it will be useful to decrease the savings that are deducted from your OA. 

  1. At the age of 35, the amount of CPF payments that are sent to your OA will be reduced, and more funds will be sent to your MediSave and SA. 

Therefore, if you don’t keep a close watch, the contributions from your OA may end up being insufficient to pay for the loan payments on your property. 

In such a scenario, it would be advisable to know how to adjust CPF payment for housing loan and reduce the amount of CPF payments you make, relying instead on cash to cover the difference. This enables you to avoid late payment fees or other charges. 

  1. Finally, if the funds in your CPF OA have been completely depleted, then you will be forced to make payments in cash. 

So it’s crucial to address quickly by knowing how to adjust CPF payment for housing loan, instead of waiting to be alerted. The best way to do this is to check your CPF balance regularly.

Legal Representation For CPF And Housing Loans

Note that legal representation may be required during the CPF mortgage payment process.

You will not only need it when purchasing a private residence, but also for your HDB loan repayment in order to make the HDB monthly installments.

As this is a legally binding process, you will need legal representation. The lawyer who will apply to the CPF Board and request access to your CPF funds will make the application on your behalf.

This process of using a third party to transact is called conveyancing. It is a professional service whose costs add to your purchasing costs.

So do keep the conveyancing cost as low as possible by shopping around for various legal firms and comparing their quotes to see how much it will cost you. You can use HDB’s conveyancing fees as a guide.

If you’re looking to pay HDB loan using CPF, you may want to hire HDB to represent you through the legal forms it appoints. But if that’s not for you, you may still opt to hire your counsel.

Note that if you’re buying a private residential property, HDB cannot help you.

You would have to hire a conveyancing lawyer before you submit your mortgage application.

Be Clear About How To Adjust CPF Payment For Housing Loan

Now that you know how to adjust CPF payment for housing loan, it’s time to find the right lender if you are short on funds. 

1AP Capital is a top licensed money lender in Singapore. We have years of experience in dealing with loans for our clients. 

With our quick turnaround time, we are ready to address your needs, regardless of the type of loan you require.  

If you need a quick loan, contact us now or apply for a loan today.  

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