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accrued interest significantly reduces your net proceeds from a property sale by requiring a refund of the principal withdrawn from your CPF Ordinary Account (OA) plus 2.5% per annum interest it would have earned[1][2][5]. This protects your retirement savings but can cut your cash take-home by thousands, surprising many Singapore sellers[1][3]. Homejourney verifies this via official CPF and HDB rules, helping you plan safely with transparent tools like our mortgage calculator at https://www.homejourney.sg/bank-rates#calculator [1].

What is CPF Accrued Interest?

CPF accrued interest is the calculated 2.5% annual interest (compounded monthly) on every dollar withdrawn from your CPF OA for housing purposes, including CPF for home loan, down payments, stamp duties, and legal fees—but not interest-free HDB grants[1][3][4]. It applies from withdrawal date until full refund upon sale or voluntary repayment[5]. Unlike actual OA interest, it's a notional amount to restore your retirement funds[3].

Check your exact amount on the CPF portal under 'My Statement' or HDB's Sale Proceeds Calculator[1][4]. At Homejourney, we prioritize user safety by linking to these official tools, ensuring you make confident decisions in a trusted environment.

How CPF Accrued Interest is Calculated

The formula is: Principal × (1 + 0.025/12)^(number of months held) - Principal[1][3]. For a $200,000 withdrawal held 5 years (60 months), accrued interest is about $26,282, making total refund $226,282[1][2]. Longer holds mean higher costs due to compounding[3].

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 property funds. Selling post-5-year MOP in 2026, her obligation is $226,282 despite Punggol's 15% appreciation[1][2]. Model your scenario with Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator.

Impact on Property Sale Proceeds: Priority Order

Sale proceeds follow strict HDB/CPF priority: 1) Outstanding mortgage (CPF for mortgage or bank like DBS, OCBC), 2) CPF principal + accrued interest from CPF housing, 3) Grants (interest-free), 4) Remainder as cash[1][4]. Example: Sell Sengkang HDB for $600,000 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—far less than expected[1]. No out-of-pocket if market value covers it[4].

View current rates from DBS, OCBC, UOB, HSBC, and more on Homejourney's bank-rates page to plan your CPF down payment and loan strategy.

Singapore-Specific Rules: HDB vs Private Properties

HDB Flats: 5-year MOP required[1][6]. MSR limits use CPF for mortgage (full amount counts)[1]. Grants like EHG ($80,000 max) refund interest-free[1].

Private Properties: CPF for bank loans only, 5% cash down min, up to ABSD limits[2]. Over 55? Capped at BRS ($106,500) or FRS ($213,000)[2]. Search budgeted options via Homejourney at https://www.homejourney.sg/search.

For deeper insights, see our related guide: CPF for Home Loan: Complete Guide.

Actionable CPF Repayment Strategies

Minimize impact with these steps:

Voluntary Refund: Pay principal + interest before sale to halt accrual and shift to 4% SA[5][8]. Ideal if selling soon.
Partial Refunds: Use for monthly payments to reduce OA drawdown[1].
Timing Sales: Post-MOP for HDB; factor appreciation vs interest[1].
Next Purchase: Refunded OA reusable (pre-55) under MSR/TDSR.
Compare Loans: Apply to multiple banks like Standard Chartered, Maybank via Homejourney's one-click application with Singpass at https://www.homejourney.sg/bank-rates.

Insider tip: For HDB upgraders in areas like Punggol or Sengkang, calculate using HDB's tool first, then refine with Homejourney for bank options—many overlook how cash payments reduce accrual[2]. Always consult professionals; Homejourney connects you to trusted mortgage brokers.

Disclaimer: This is general information. Seek personalized advice from CPF Board or financial advisors. Rates and rules as of 2026[1].

FAQ: CPF Accrued Interest on Property Sale

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

Q: Do I pay if sale proceeds are short?
A: No, if market value suffices; option fees count[2][4].

Q: Can I reduce CPF accrued interest for more cash?
A: Yes, pay loan instalments with cash instead of CPF[2]. Explore strategies in our guide CPF vs Cash for Mortgage.

Q: What if I'm over 55?
A: Refund limited to Retirement Account shortfall[3].

Q: How does this link to CPF for home loan?
A: All OA withdrawals accrue interest until refunded[1]. Use Homejourney's calculator for projections.

Plan your next move safely with Homejourney. Compare how CPF accrued interest affects property sale impacts across properties in our property search and connect to our pillar guide on CPF housing for full coverage: CPF Housing Complete Guide. Start at https://www.homejourney.sg/bank-rates today.