New CPF Rules for Buying Home – What You Need to Know
Heads up, Singaporeans! As of 10 May 2019, the rules that let you tap into your CPF to buy a house have been switched up. Whether you’re eyeing a HDB flat or a private property, you’ll want to read on before you lock in any deals.
Quick Recap: The Old Way (Just to Remember)
Old rules were all about how many years sat on the lease of your future home. Roughly, you could:
- If the lease had 60+ years left – use up to the Valuation Limit (VL) and borrow up to 90 % of the Loan‑to‑Value (LTV).
- If the lease had less than 60 years – you got a pro‑rated VL (but only if the youngest co‑owner had at least 30 or 20 years of lease remaining to turn 80) and a pro‑rated LTV limit.
Beyond the VL, you could dig a bit deeper up to the Withdrawal Limit (WL) if you had already set aside the Basic Retirement Sum.
Good news: most new HDB 350‑plus flats, BTO’s, and resale homes still fall well below the 60‑year bar threshold, so your CPF flex remains intact.
The Fresh Rules: No More Lease‑Length Only
Now, age coverage matters. The system asks: does the property last until the youngest buyer turns 95? That’s a more life‑spanning view for your future.
- If it does cover up to 95 – you can still use up to the VL and borrow up to 90 % LTV, just like before.
- If it doesn’t reach 95 – you get a pro‑rated VL and a pro‑rated 90 % LTV. Think of it as “pay more now, borrow less.”
The CPF Board launched a revamped Housing Usage Calculator to help you see where you stand. No fancy tables yet, but the tool does the math for you.
Sample Lease Coverage & Pro‑Rating Impacts
Below are some practical examples (remember, these are illustrative – you’ll want to launch the calculator for exact figures):
- Property with 70‑year lease – covers 95 → full VL & 90 % LTV.
- Property with 50‑year lease – falls short of 95 → about half of the VL & half of the 90 % LTV (roughly).
- Property with 35‑year lease – clear shortfall → even smaller pro‑rated amounts.
So What Does This Mean for You?
If you’re planning a purchase before the 10‑May deadline, we recommend:
- Check the lease length. If you’re under 60 years, that’s not a deal breaker, but you might hit the pro‑rated limits.
- Use the calculator. Plug in your numbers to see how much CPF you can tap and how much you’ll need to borrow.
- Think long‑term. A home that supports a lifetime (i.e., extends to 95) gives you a smoother CPF strategy.
Bottom line: CPF will still help, but it’s now a little stricter on loans for shorter‑lease homes. Keep that in mind, enjoy your house hunt, and remember: the earlier you get the numbers, the fewer surprises down the road.
How the New CPF & HDB Rules Shake Up Singaporean Home Buying
Who’s the real play‑maker?
These changes won’t touch most of the average household out there. They’re mainly a game‑changer for young Singaporeans who are snapping up older apartments or private houses.
- Picture a couple in their twenties or a parent‑child duo hunting a resale flat with not more than 74 years of lease left.
- Before, they could snatch up those homes and still use their CPF up to the full value limit—so long as the property’s lease stayed near 60 years.
- Now, you’ll need that lease to be over 60 years to tap into the CPF funds fully.
Why the tweak matters for avid bargain hunters
Under the old rules, anyone buying a slick new HDB could lean on their CPF for a pretty big chunk of the payment. The loophole was that if the apartment had less than 60 years left in its lease, they’d lose that privilege.
With the new regime, you can broaden your search—aiding a whole bunch of buyers who fumbled with the 60‑year cap. This opens the door to more affordable options while still keeping the CPF safety net intact.
Key points anyone should know
- No CPF money or HDB loans for properties that have 20 years or less of remaining lease.
- To tap into the “Full Retirement Sum” or stretch your CPF beyond the Basic Retirement Sum, the pledged property must ensure you’re covered until age 95. If not, you’re limited to withdrawing $5,000 once you hit 55, plus a 20% slice of your Retirement Account at the normal payout age.
- If you signed an Option To Purchase (OTP) before 10 May 2019, you’re allowed to keep the old CPF‑tapping rights. Mid‑purchase folks can still turn to the CPF Board or HDB for help.
Bottom line: a more flexible future
While the rulebook shift seems minor at first glance, it’s actually built to give Singaporeans the freedom to tap into CPF for property purchases, without cutting their retirement safety net.
So whether you’re fresh into the 20‑year lease club or squeezing through the 60‑year threshold, you’ll find the new rules a welcomed upgrade.
These insights came from the Dollars and Sense capsule—bringing you the latest on CPF & HDB trends.
