How CPF Accrued Interest Affects Property Sale | Homejourney

CPF accrued interest significantly reduces your net cash proceeds from a property sale by requiring you to refund the principal withdrawn from your CPF Ordinary Account (OA) plus 2.5% per annum compounded interest it would have earned.[1][2][3]

This protects your retirement savings but often surprises sellers, cutting take-home cash by thousands or more depending on holding period and amount used.[1][2] Homejourney prioritizes transparency to help you plan safely with verified CPF tools and data.[1]

What is CPF Accrued Interest?

CPF accrued interest is the notional 2.5% annual interest (compounded monthly) calculated on CPF OA funds withdrawn for housing purposes, from withdrawal date until full refund upon sale or voluntary repayment.[1][2][4][5][6]

It applies to down payments, monthly CPF mortgage payments, stamp duties, legal fees, and resale premiums—but not interest-free HDB grants like AFG or EHG.[1][2] This ensures your retirement funds grow as if never withdrawn.[1]

In Singapore's high-property-price market, where average HDB resales hit $550,000 in Punggol (2025 data), buyers often use 20-30% CPF OA for downpayments under MSR/TDSR limits.[1] Homejourney's property search verifies flats fitting your CPF limits.

How CPF Accrued Interest is Calculated

The formula is: Principal × (1 + 0.025/12)^(number of months held) - Principal.[1][2][7] CPF uses exact dates, viewable via the official CPF portal or HDB Sale Proceeds Calculator.[1]

Example: $100,000 withdrawn for 5 years (60 months): Interest ≈ $12,500. Total refund: $112,500.[1][2]

Real case: Ms. Lee buys $500,000 Punggol HDB BTO in 2021 using $200,000 CPF OA. Sells post-MOP in 2026 (5 years): Accrued interest ~$26,282. Total refund: $226,282.[1][2] Punggol's 15% appreciation since 2021 offsets some, but net cash drops.[1]

Case Study	Principal Used	Years Held	Accrued Interest (2.5% p.a.)	Total Refund
Ms. Lee's HDB (Punggol)	$200,000	5	$26,282	$226,282
Sengkang HDB Example	$300,000	7	$52,500	$352,500

Longer holds amplify compounding—plan with Homejourney's mortgage calculator.[1]

Impact on Property Sale Proceeds

Sale proceeds follow strict priority: 1) Clear outstanding mortgage (HDB or bank like DBS, OCBC, UOB).[1][2][3] 2) Refund CPF principal + accrued interest.[1][4][6] 3) Refund grants (interest-free).[1] 4) Remainder as cash.[1][2]

Example: $600,000 Sengkang HDB sale with $200,000 outstanding HDB loan and $300,000 CPF used over 7 years ($52,500 interest). Total CPF refund: $352,500. Net cash: ~$47,500—much less than expected.[1][2]

No out-of-pocket for shortfalls if sold at market value—CPF writes off the difference up to valuation.[1][3][4] This "negative sale" protection applies, but plan ahead to avoid surprises.[3]

Singapore-Specific Rules: HDB vs Private Properties

HDB Flats: 5-year Minimum Occupation Period (MOP).[1][6] MSR caps OA usage at 100% of valuation.[1] Grants like EHG ($80,000 max) refund interest-free.[1]

Private Properties: Bank loans only (compare via Homejourney bank rates from DBS, OCBC, UOB, HSBC, etc.). Min 5% cash down, CPF up to ABSD limits. No MOP but resale levy for ex-HDB owners.[1][2][5] Over 55? Capped at BRS ($106,500) or FRS ($213,000).[2]

For CPF mortgage strategies, see our pillar guide on CPF vs Cash for Mortgage.[1]

CPF Repayment Strategies to Maximize Proceeds

Voluntary refunds stop accrual and shift funds to higher 4% Special/Retirement Accounts (SA/RA).[1][3][8] Use cash for partial refunds up to principal + interest.[8]

Check CPF portal for exact amount owing.[1]
Refund using cash while owning property.[1][8]
Time refunds before sale to minimize interest.[1]
Compare CPF OA vs Cash Mortgage options.[1]
Apply multi-bank loans via Homejourney for better rates: Singpass auto-fills CPF data.[1]

Insider tip: For upgraders, voluntary refunds preserve cash for next downpayment—use Homejourney's eligibility calculator.[1]

Disclaimer: This is general guidance; consult CPF Board or advisor for personalized advice. Rates as of 2026.[1][2]

Common Mistakes and How Homejourney Helps

Sellers overlook compounding, assuming only principal refunds.[1][3] Upgraders underestimate reduced cash for new purchases.[1] Homejourney verifies data transparently, prioritizing your safety.[1]

Track via bank-rates page: Compare DBS, OCBC, UOB, HSBC rates.
One-click multi-bank applications with Singpass.
Post-sale: Explore property maintenance for new homes.[1]

FAQ: CPF Accrued Interest on Property Sale

Q: What is CPF accrued interest?
A: Notional 2.5% p.a. compounded monthly on OA funds used for housing, refunded on sale.[1][2][3]

Q: When does CPF accrued interest stop accruing?
A: Upon sale completion or voluntary full refund.[1][3][5][6]

Q: Do I pay CPF refund shortfall from my pocket?
A: No, if sold at market value; CPF writes off up to valuation.[1][3][4]

Q: How to calculate my accrued interest?
A: Use CPF portal formula or Homejourney calculator.[1][2][7]

Q: Is voluntary CPF refund worth it before selling?
A: Yes, stops 2.5% accrual and enables 4% SA rates.[1][3][8]

Master CPF mortgage details in our pillar: Using CPF to Reduce Mortgage Burden. Calculate affordability now at Homejourney bank-rates for trusted, verified guidance.