How CPF Accrued Interest Affects Property Sale | Homejourney

CPF accrued interest significantly reduces your net proceeds from a property sale by requiring a refund of the principal withdrawn from your CPF Ordinary Account (OA) plus 2.5% per annum interest it would have earned.[1][2][4] This protects retirement savings but can cut cash take-home by thousands for Singapore sellers.[1][3] Homejourney verifies these rules via official CPF and HDB data to help you plan transparently and safely.

This cluster focuses on how CPF accrued interest affects property sale, a critical factor in CPF housing strategies. It links to our pillar guide on CPF for property purchases, providing tactical advice for HDB upgraders and investors.

What is CPF Accrued Interest?

CPF accrued interest is the notional 2.5% annual interest (compounded monthly) on CPF OA funds withdrawn for housing, from withdrawal date until refund upon sale or voluntary repayment.[1][2][4] It covers down payments, CPF monthly mortgage payments, stamp duties, and legal fees—but excludes interest-free HDB grants like EHG (up to $80,000).[1][4]

Unlike actual OA interest (currently 2.5%), this restores what your retirement funds would have earned.[3] Check your amount on the CPF portal under 'My Statement' or HDB's Sale Proceeds Calculator for accuracy.[1][2] Homejourney prioritizes this transparency, ensuring users make confident decisions in a trusted environment.

How CPF Accrued Interest is Calculated

The formula is: Principal × (1 + 0.025/12)^(number of months) - Principal.[1][2] For $200,000 withdrawn over 5 years (60 months), accrued interest is ~$26,282, totaling $226,282 refund.[1][2]

Case Study	Principal	Years	Accrued Interest	Total Refund
Ms Lee's Punggol HDB	$200,000	5	$26,282	$226,282
Mr Tan's Condo	$500,000	2	$25,313	$525,313

Real example: Ms Lee bought a $500,000 Punggol HDB BTO in 2021 using $200,000 CPF OA. Selling post-5-year MOP in 2026 (15% appreciation), her CPF obligation is $226,282 despite gains.[1][2] Model yours with Homejourney's calculator at https://www.homejourney.sg/bank-rates#calculator.

Impact on Property Sale Proceeds: Priority Order

Sale proceeds follow: 1) Outstanding mortgage (HDB or bank like DBS, OCBC, UOB), 2) CPF principal + accrued interest, 3) Interest-free grants, 4) Remainder cash.[1][4][5] Example: Sell $600,000 Sengkang HDB with $200,000 HDB loan and $300,000 CPF over 7 years ($52,500 interest). CPF refund: $352,500. Net cash: $47,500.[1]

No out-of-pocket if proceeds cover it; option fees count as proceeds.[2][4] For CPF loan repayment, this priority ensures retirement protection per CPF rules.[4] View bank options on Homejourney's bank-rates page.

Singapore-Specific Rules: HDB vs Private Properties

HDB Flats: 5-year MOP mandatory; MSR limits CPF use (full amount counts toward limits).[1][6] EHG grants refund interest-free.[1]

Private Properties: CPF for bank loans only (no HDB loan), 5% cash down minimum, ABSD applies.[1] Age 55+: Capped at BRS ($106,500) or FRS ($213,000).[1] Search budgeted properties via https://www.homejourney.sg/search.

Compare CPF OA monthly vs cash impacts in our guide: CPF OA vs现金还房贷哪个更划算？Homejourney实战解析 .

Actionable CPF Repayment Strategies

Minimize impact with these steps:

Voluntary Refund: Pay principal + interest pre-sale to stop accrual and shift to 4% Special/Mediasave Account (SA/MA).[1][5][8]
Partial Refunds: Use for CPF servicing mortgage to cut OA drawdown; see pros/cons CPF for Monthly Mortgage Payments: Pros, Cons & Homejourney Guide .
Timing: Sell post-MOP; weigh appreciation vs compounding interest.
Next Buy: Refunded OA reusable (under 55) under MSR/TDSR.[3]
Compare CPF vs Cash: Cash avoids interest trap for more sale cash.CPF vs Cash for Mortgage: Which is Smarter? Homejourney Guide

Apply via Homejourney: Compare DBS, OCBC, UOB, HSBC rates at https://www.homejourney.sg/bank-rates with Singpass auto-fill for fast eligibility checks.

FAQ: CPF Accrued Interest on Property Sale

Q: When does CPF accrued interest stop accruing?
A: Upon sale completion or voluntary full refund.[1][2][5]

Q: Do I pay if sale proceeds are short?
A: No out-of-pocket if sold at market value; option fees contribute.[2][4]

Q: Does it apply to grants?
A: Principal only, interest-free for HDB grants like EHG.[1][4]

Q: How does CPF monthly mortgage affect it?
A: Each payment adds to principal + accruing interest; partial refunds help.[1][2]

Q: Best for CPF vs cash monthly payments?
A: Cash preserves OA for sale proceeds; calculate on Homejourney.[1]

Disclaimer: This is general info based on 2026 CPF/HDB rules. Consult professionals for advice. Homejourney verifies data for safety.

Maximize your sale with Homejourney's trusted tools. Calculate affordability at https://www.homejourney.sg/bank-rates#calculator, compare loans from DBS to Maybank, and explore properties at https://www.homejourney.sg/search. Link back to our CPF pillar for full coverage.