How to Use CPF for HDB Down Payment: Your Complete 2026 Guide
You can use your CPF Ordinary Account (OA) to pay your entire 25% HDB down payment if you have sufficient savings, or combine CPF with cash for bank loans that require a minimum 5% cash component.[1][3] Understanding how to strategically deploy your CPF savings is crucial for first-time buyers, as it directly impacts your cash flow, loan affordability, and long-term financial health.
At Homejourney, we're committed to helping you make informed decisions about your home purchase. This guide breaks down exactly how CPF works for HDB down payments, compares your financing options, and shows you how to maximize your CPF benefits while maintaining the financial safety net you need.
Understanding Your CPF Options for HDB Down Payments
Your CPF Ordinary Account is specifically designated for housing purchases, and the Housing and Development Board (HDB) has created flexible rules to help you use these savings effectively. The amount you can use depends on whether you're taking an HDB loan or a bank loan—and this distinction is one of the most important decisions you'll make as a buyer.[1]
With an HDB loan, you have maximum flexibility: the entire 25% down payment can come from your CPF OA, cash, or any combination of the two.[1][3] This is significantly more generous than bank loans, which require at least 5% in cash, with the remaining 20% split between CPF and additional cash.[2]
The CPF Board's Home Planner tool can help you calculate exactly how much CPF you'll need, but the basic principle is straightforward: your CPF OA balance must be sufficient to cover your chosen down payment amount after setting aside your CPF Minimum Sum (currently around $6,000 for retirement purposes).[8]
HDB Loan vs Bank Loan: The CPF Down Payment Difference
The choice between an HDB loan and a bank loan significantly affects how you use your CPF. Let's break down the practical differences with a concrete example using a $400,000 flat purchase:
HDB Loan Option: You need a 25% down payment ($100,000). You can pay this entirely from CPF OA if you have the balance, or use a combination of CPF and cash.[1] The HDB loan carries a fixed interest rate of 2.6% per annum (pegged at CPF OA rate + 0.1%), making it predictable and stable.[3]
Bank Loan Option: You need a minimum 5% cash down payment ($20,000) plus 20% that can be CPF or cash ($80,000). This means you must have at least $20,000 in liquid cash reserves.[2] Bank loans typically range from 2.00% to 2.50% per annum, depending on market conditions and your bank.[3]
The key insight: if you're tight on cash but have substantial CPF savings, an HDB loan maximizes your flexibility. If you want to preserve CPF for retirement and have cash available, a bank loan might suit you better. Many first-time buyers find the HDB loan's 2.6% concessionary rate attractive, especially compared to variable bank rates that fluctuate with market conditions.[3]
The Staggered Down Payment Scheme: Spreading Your CPF Usage
One of the most valuable tools for CPF management is HDB's Staggered Down Payment Scheme, which allows eligible first-time buyers to split their down payment into two stages.[1][2] This is a game-changer for cash flow management.
How the Staggered Scheme Works: Instead of paying your full down payment at lease signing, you can pay as little as 2.5% initially (for young couples under 30 or those qualifying for Deferred Income Assessment), with the remaining 22.5% due at key collection, typically 2-4 years later.[1][6]
For a $400,000 flat, this means paying just $10,000 upfront instead of $100,000. You can use CPF OA for this initial payment, or a combination of CPF and cash. The remaining $90,000 comes due when you collect your keys, giving you years to accumulate additional CPF contributions and savings.[1]
Eligibility Requirements: You must be a first-time buyer or a couple with one first-timer, obtain your HDB Financial Eligibility (HFE) letter before the younger applicant's 30th birthday, and book an uncompleted flat (BTO, Sale of Balance, or Open Booking).[1][2] Resale flats do not qualify for this scheme.[2]
This scheme is particularly valuable because it reduces pressure on your current CPF balance while giving you time to build savings through continued employment contributions.
Step-by-Step: Using CPF for Your HDB Down Payment
Step 1: Check Your CPF OA Balance and Minimum Sum Log into your CPF account online and verify your Ordinary Account balance. Remember that you must maintain your CPF Minimum Sum (approximately $6,000) for retirement—this amount cannot be used for housing.[8] Your usable balance is your total OA minus the Minimum Sum.
Step 2: Determine Your Financing Strategy Decide whether you'll use an HDB loan or bank loan. Use Homejourney's mortgage eligibility calculator at Bank Rates to understand your borrowing capacity and compare the 2.6% HDB rate against current bank loan rates from DBS, OCBC, UOB, HSBC, and Standard Chartered. This comparison is essential—while the HDB rate is fixed and predictable, some bank loans may offer competitive rates, especially if you have excellent credit.[3]
Step 3: Calculate Your Down Payment Requirement Multiply your flat's purchase price by 25% for an HDB loan, or 25% (with 5% minimum cash) for a bank loan. For example, a $400,000 flat requires $100,000 down payment. If you're eligible for the staggered scheme, your first payment is only $10,000 (2.5%).
Step 4: Gather Required CPF Documentation You'll need your CPF statement, NRIC, and proof of employment. These documents verify your CPF balance and contribution history to HDB and your lender.[1] Homejourney's HDB Loan Documents Checklist HDB Loan Documents Checklist 2026: Homejourney Guide provides a complete list of required paperwork.
Step 5: Apply for Your HDB Financial Eligibility (HFE) Letter This letter confirms you're eligible to purchase and outlines your CPF usage. Apply through HDB's official website or in person at an HDB branch. The letter is essential before you can proceed with any flat booking.
Step 6: Submit Your CPF Authorization at Flat Booking When you book your flat, you'll authorize HDB to deduct your down payment directly from your CPF OA. You don't need to withdraw cash—the transfer happens automatically. HDB handles all CPF-to-down-payment transfers directly, making the process seamless.[8]
Step 7: For Bank Loans, Apply Through Homejourney If you're using a bank loan, submit your application via Homejourney's bank rates page. Your Singpass/MyInfo integration auto-fills your income, employment, and CPF data instantly, speeding up the approval process.[1] Compare offers from multiple banks side-by-side and choose the best rate for your situation.
CPF Housing Grants: Maximizing Your Benefits
Beyond using your CPF OA for down payments, you may qualify for CPF Housing Grants that further reduce your down payment burden. First-time buyers can receive up to $80,000 in Enhanced Housing Grants (EHG) for BTO flats, and up to $190,000 for resale flats (combining EHG, Family Grant, and other schemes).[3]
These grants are credited directly to your CPF OA and can be used toward your down payment, effectively reducing the amount of your own CPF savings you need to deploy. For a young couple buying a BTO, an $80,000 grant means you only need $20,000 from your own CPF savings for the 25% down payment—a significant advantage.[2]
Verify your grant eligibility through the CPF Board's website or Homejourney's eligibility calculator before finalizing your financing plan.
Common CPF Down Payment Mistakes to Avoid
Mistake 1: Forgetting Your CPF Minimum Sum Many first-time buyers assume their entire CPF OA balance is available for housing. Remember, you must preserve your Minimum Sum for retirement. Plan your down payment around your usable balance, not your total balance.[8]
Mistake 2: Not Comparing HDB vs Bank Loan Rates While the 2.6% HDB rate is fixed and attractive, you should still compare it against current bank rates. In some market conditions, bank loans may offer competitive rates, and the flexibility of a bank loan might suit your situation better. Use Homejourney's rate comparison tool to make an informed decision.[3]
Mistake 3: Depleting All CPF Savings for Down Payment While you can use your entire CPF OA for an HDB down payment, consider keeping some CPF for future housing upgrades or emergencies. The staggered down payment scheme exists precisely to avoid this problem—use it if you're eligible.[1]
Mistake 4: Overlooking the Staggered Scheme Eligibility If you're under 30 and a first-time buyer, you likely qualify for the staggered scheme. Don't miss this opportunity to reduce your initial cash outlay. Confirm eligibility during your HFE letter application.[1]
Mistake 5: Not Planning for Stamp Duty and Other Costs Your down payment is just one cost. You'll also pay stamp duty (around $6,600-$12,600 depending on flat price and loan type), which must be paid in cash but is reimbursable from CPF.[2] Budget for these additional expenses.
HDB Loan vs Bank Loan: Which Rate Wins?
The 2.6% HDB concessionary rate is fixed and guaranteed, making it predictable for budgeting. However, the question "Is HDB loan better?" depends on your circumstances.[3]
Choose an HDB loan if: You want a fixed, predictable rate; you have limited cash reserves but substantial CPF; you prefer simplicity and direct HDB administration; or you want to preserve cash for emergencies and other expenses.[3]
Choose a bank loan if: You have sufficient cash reserves and want to preserve CPF for retirement; you're eligible for a competitive bank rate below 2.6%; you prefer the flexibility of a private lender; or you want to refinance options in the future.[3]
The chart below shows recent interest rate trends to help you understand how bank rates have moved relative to the fixed HDB rate:
As you can see, bank rates fluctuate with market conditions, while the HDB rate remains stable at 2.6%. This stability is valuable for long-term financial planning.
Maximizing Your CPF Strategy: Pro Tips
Tip 1: Use the Staggered Scheme to Build CPF If eligible, take advantage of the staggered scheme. Pay 2.5% initially, then use the 2-4 years before key collection to maximize CPF contributions through your employment. Your employer contributions plus your own savings will significantly boost your CPF OA balance.[1]
Tip 2: Calculate Your True Borrowing Power Use Homejourney's mortgage eligibility calculator to understand your maximum loan amount. This helps you determine whether a $400,000 or $500,000 flat is realistic based on your income, CPF, and cash reserves. Knowing your limits prevents you from overextending.[3]
Tip 3: Lock In Your Rate Early If you decide on a bank loan, apply through Homejourney early to secure your rate. Bank rates can change, and locking in a favorable rate protects you from future increases. Homejourney's multi-bank application system lets you compare offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others in one place.[3]
Tip 4: Preserve Emergency CPF Funds Even if you can pay your entire down payment from CPF, consider keeping 3-6 months of living expenses in CPF as an emergency buffer. The staggered scheme helps you achieve this balance.[1]
Tip 5: Monitor SORA Rates If Considering Bank Loans If you're leaning toward a bank loan with a floating rate pegged to SORA (Singapore Overnight Rate Average), track rate trends through Homejourney's real-time SORA tracking. Understanding rate direction helps you time your application decision.[3]
Frequently Asked Questions About CPF and HDB Down Payments
Q: Can I use my spouse's CPF for the down payment?
A: Yes, if you're buying as a couple, both spouses' CPF OA can be combined for the down payment. This is particularly valuable for young couples who may have lower individual balances but a strong combined CPF position.[1]
Q: What happens to my CPF if I take an HDB loan?
A: Your CPF OA is used for the down payment, then your monthly mortgage payments are automatically deducted from your CPF OA. This continues until your loan is fully paid, at which point remaining CPF balance is yours to keep or use for future housing needs.[8]
Q: Is the 2.6% HDB rate better than bank loans in 2026?
A: The 2.6% rate is competitive and fixed, eliminating rate risk. However, some bank loans may offer comparable or lower rates. Compare options through Homejourney's bank rates page to see current offers from DBS, OCBC, UOB, and others. The "better" option depends on your circumstances, not just the rate.[3]
Q: Can I use CPF for down payment on a resale flat?
A: Yes, the same CPF rules apply to resale flats. However, resale flats don't qualify for the staggered down payment scheme, so you must pay the full 25% (or 25% with 5% minimum cash for bank loans) at lease signing.[2]
Q: What if my CPF balance is insufficient for the down payment?
A: You can combine CPF with cash savings. For HDB loans, any shortfall can be covered by cash. For bank loans, ensure you have at least 5% in cash, with the remaining 20% split between CPF and additional cash.[1][2]
