For most Singaporeans, the Central Provident Fund (CPF) plays a central role in buying a home. Whether you’re purchasing a new BTO, a resale flat, or a private condominium, your CPF Ordinary Account (OA) savings can help pay for the down payment and monthly instalments.

However, what many buyers don’t realise is that there are limits to how much CPF you can use, and exceeding those limits can leave you short of funds, especially when you reach the later years of your mortgage. Understanding these limits early ensures your financing plan remains sustainable and compliant with CPF rules.

Why CPF Limits Exist

CPF funds are meant to support both home ownership and retirement adequacy. To prevent homeowners from over-using CPF and depleting their retirement savings, the government imposes two key ceilings on property-related withdrawals:

1. Valuation Limit (VL):  the property’s purchase price or market value, whichever is lower.
   
   
2. Withdrawal Limit (WL): 120% of the Valuation Limit.
   
   

Once you hit the VL, you can only continue using CPF if you set aside the prevailing Basic Retirement Sum (BRS) in your CPF accounts. Beyond 120% (the WL), you cannot use CPF at all for the mortgage, even if you still have money in your OA.

How CPF Usage Differs by Property Type

Examples of CPF Withdrawal Limits

Example 1: HDB Resale Flat

• Purchase price: $600,000
  
  
• Market value: $590,000
  
  
• Valuation Limit = $590,000
  
  
• Withdrawal Limit = 120% × $590,000 = $708,000
  
  

You can use CPF up to $708,000 in total (downpayment + instalments). Once this is reached, the rest of the loan must be serviced in cash.

Example 2: Private Condominium

• Purchase price: $1,200,000
  
  
• Market value: $1,150,000
  
  
• Valuation Limit = $1,150,000
  
  
• Withdrawal Limit = 120% × $1,150,000 = $1,380,000
  
  

Once CPF usage hits $1.38 million, you must pay any remaining loan balance fully in cash, regardless of how much you still have in your CPF Ordinary Account.

When You May Not Be Able to Use CPF at All

Several situations can restrict or completely disallow CPF use:

• Short remaining lease: If the property’s lease does not last until the youngest buyer turns 95, CPF usage will be proportionally reduced.
  
  
• Older properties (under 20 years of lease remaining): CPF cannot be used at all.
  
  
• Exceeding withdrawal limit: Once 120% of VL is reached, CPF usage stops automatically.
  
  
• Insufficient BRS: If you haven’t set aside the Basic Retirement Sum after age 55, CPF usage beyond the VL is not allowed.
  
  

Fairloan’s View: Plan Ahead and Blend Cash, CPF, and Loan Wisely

At Fairloan, we often advise clients to think of CPF as a long-term financial lever, not an unlimited fund. Using CPF strategically means balancing three priorities: home ownership, cash liquidity, and retirement planning.

While using CPF can reduce cash strain in the short term, over-reliance can leave you with insufficient funds for your later years. For younger buyers of BTO flats, CPF usage tends to be straightforward, but for resale or private property buyers, careful monitoring of withdrawal limits is essential.

Our approach is simple:

• Use CPF judiciously up to the Valuation Limit.
  
  
• Supplement monthly payments with cash if possible.
  
  
• Maintain awareness of your Basic Retirement Sum requirements, especially as you approach age 55.
  
  

A good mortgage plan doesn’t just help you buy a home, it protects your long-term financial freedom.

Read more on whether you should use CPF for your home loan here.

Conclusion

CPF makes home ownership achievable for most Singaporeans, but it’s not an endless well. Whether you’re purchasing a BTO, resale flat, or private condo, always check your Valuation and Withdrawal Limits before committing to a property.

And remember: if your CPF usage is nearing its cap, plan early to ensure your loan remains manageable with cash.

A balanced strategy today prevents stress later and ensures your property remains a source of stability, not strain.- Chief Analyst (JL)