01 · The questionThe bill that arrives at the end
Nobody is surprised by CPF going in. Everybody is surprised by what comes out.
The CPF decision is made on day one and settled on the day you sell.
Using CPF for the downpayment feels free. The money was locked away, you could not spend it, and now it buys a home. Nothing leaves your bank account.
Then you sell, fifteen years later, and the completion statement shows a refund to CPF far larger than the amount you put in. The cash you expected is not there. Nothing went wrong — this is exactly how the scheme is designed. It is simply the first time most people see the number.
CPF used for property is a loan from your future self, priced at 2.5% and compounding.
02 · The claimHow accrued interest works
One rule, applied without exception.
Every dollar of CPF Ordinary Account money withdrawn for a property must be returned to your OA when the property is sold — together with the interest that money would have earned had it stayed. That rate is currently 2.5% a year, compounded.
The refund goes back into your own CPF account. It is not a fee and it is not lost. But it is not cash in hand either, and if you are relying on sale proceeds to fund the next purchase, that distinction is the whole ball game.
You always get the money back. You just get it back into CPF, not into your bank account.
03 · MethodHow we calculated it
Simple compounding, stated plainly.
- Accrued interest = principal × (1 + 0.025)years − principal, compounded annually.
- Rate held flat at 2.5% — the prevailing CPF Ordinary Account rate. It is reviewed periodically and has a legislated floor.
- Principal treated as a single withdrawal at purchase. In reality CPF also funds monthly instalments, which accrue from their own dates — so real accrual is somewhat higher than shown.
- Market context from URA caveats, 2021-07 to 2026-07, private non-landed resale, Executive Condominiums excluded.
04 · Core evidenceTwenty-five years of 2.5%
What a single S$250,000 withdrawal becomes over time.
After 5 years, S$250,000 owes S$282,852. After 10, S$320,021. After 20, S$409,654. After 25, S$463,486 — the accrued interest alone has reached S$213,486, which is 85% of the original sum.
S$250,000 of CPF becomes S$409,654 owed after 20 years. The interest is S$159,654.
05 · The mechanismWhy it compounds against you
Three principal sizes, same rate, very different endings.
Compounding is indifferent to how much you started with, which is precisely the problem: the larger the CPF draw, the larger the absolute gap. S$150,000 accrues S$128,092 of interest over 25 years. S$400,000 accrues S$341,578 — more than two and a half times as much, on the same rate.
This is why “use as much CPF as possible” is not automatically right. Cash costs you today; CPF costs you at sale, with interest.
Can you work out my CPF accrual and what I would net on a sale? →A larger CPF draw does not just cost more — it costs disproportionately more the longer you hold.
06 · Cohort proofThe sale that nets less than expected
One worked example, start to finish.
Buy at S$1,500,000 using S$350,000 of CPF for the downpayment. Sell 15 years later at S$2,100,000 — a healthy gain. Outstanding loan at sale: S$700,000.
Sale price S$2,100,000, less S$700,000 loan, less roughly S$40,000 in agent commission and legal costs, leaves S$1,360,000. From that, CPF must be refunded S$350,000 principal plus S$156,904 of accrued interest — S$506,904 in total.
Cash in hand: roughly S$853,096. The other S$506,904 is real money, sitting in CPF, usable for the next property or released at 55 subject to the retirement sum rules. It is simply not the number most sellers have in mind.
Before you sell, calculate cash proceeds and CPF refund separately. The first funds your next downpayment in cash. The second only funds the CPF-eligible portion.
On this example, S$506,904 of a S$1,360,000 equity gain returns to CPF rather than to your bank account.
07 · The counter-caseWhen CPF is still the right call
The honest correction: the case against paying cash.
Everything above argues for using less CPF. Here is the argument the other way, and it is a good one.
Cash you do not put into property is cash you keep. If your alternative use of that cash returns more than 2.5% after tax — or simply lets you sleep at night with six months of expenses in the bank — using CPF is the better trade. The 2.5% accrual is not a loss; it is the return CPF would have paid you anyway.
The genuine mistake is neither using CPF nor avoiding it. It is using CPF without knowing the accrual figure, then planning the next move on a proceeds number that was never real.
The accrual is not a penalty. Not knowing the number is the mistake.
08 · For youWhat it means for you
Four situations, four numbers to act on.
If you are buying now
On a median S$1,700,000 purchase, the 25% downpayment is S$425,000. Decide the CPF-versus-cash split deliberately, and write down what it accrues to in 10, 15 and 20 years.
If you are planning to sell
Get your accrued interest figure from your CPF statement before you list. It is the difference between the proceeds you imagine and the proceeds you get.
If you are upgrading
The CPF refund from the sale can generally go straight into the next property — but only for CPF-eligible components. Cash requirements still have to be met in cash.
If you are approaching 55
The rules change materially at 55 — the Retirement Account is formed and withdrawal is governed by the retirement sum. Model the sale on both sides of that birthday before committing to a date.
What will your sale actually net?
Tell us roughly how much CPF is in the property. We will run the accrual to your intended sale year and split the proceeds into cash and CPF, so you plan on the right number.
- Your accrued interest at 5, 10, 15 and 20 years
- Cash-versus-CPF split of your sale proceeds
- What the same purchase looks like with a smaller CPF draw
One WhatsApp message back — usually same day.
We’ll WhatsApp it shortly — usually within the day.
09 · ReferenceThe full accrual table
Three principal sizes across five holding periods.
10 · MethodSources, limits and corrections
Data: URA caveat records, 2021-07 to 2026-07, private non-landed, Executive Condominiums excluded. Thresholds: minimum 40 transactions per reported group. Assumption: 2.5% compounded annually on a single withdrawal at purchase; CPF-funded instalments accrue separately and would raise the figures. Not financial advice — your CPF statement is authoritative. Reproducibility: every figure is produced by a script against the source dataset; corrections are made in place and dated. Not investment advice. Analysis of public records, published to be argued with.
The proceeds number in your head is probably the wrong one.
Two minutes in the Scenario Planner splits your sale into cash and CPF, at your accrual, for your year.
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