View Full Version : CPF Minimum sum
bakasa2002
06-03-13, 16:15
Got a question to seek advice from gurus here. Say when u start financing your property, the MS was at $67,500 and now that the MS has raised to $69,500. Will your cpf MS need to bump up by $2k before you can use it or will it be at $67,500 when the drawdown of your loan started?
Appreciate any advice. Thanks.
flagship74
06-03-13, 16:26
Got a question to seek advice from gurus here. Say when u start financing your property, the MS was at $67,500 and now that the MS has raised to $69,500. Will your cpf MS need to bump up by $2k before you can use it or will it be at $67,500 when the drawdown of your loan started?
Appreciate any advice. Thanks.
yes u are right;)
u need to top up to always maintain the current min sum requirement
NorthernStar
06-03-13, 16:44
i guess nope if this is your first property..Yes for 2nd property onward..
i guess nope if this is your first property..Yes for 2nd property onward..
It has nothing to do with the number of property. It's whether you have reached the withdrawal limit. Once reached, you can only continue using cpf to pay if meet the MS requirement.
bakasa2002
06-03-13, 22:30
I heard from banker MS is 'locked' at the time drawdown is started. So I kanna smoke? :)
I heard from banker MS is 'locked' at the time drawdown is started. So I kanna smoke? :)
:D Double confirmed
:D Double confirmed
triple confirmed...:D:D:D
toiletsiao
06-03-13, 23:40
I heard from banker MS is 'locked' at the time drawdown is started. So I kanna smoke? :)
nope its not locked...take note for this minimum sum for 2nd property..its computed based on OA + SA ....not just OA onli
buttercarp
07-03-13, 07:37
nope its not locked...take note for this minimum sum for 2nd property..its computed based on OA + SA ....not just OA onli'
Yes, toilet is right.
1st property - 100% of OA can be used.
Subsequent properties - can withdraw up to $69.5 K (OA +SA)- that means OA+SA must be at least $69.5K which is the half of the prevailing minimum sum.
phantom_opera
07-03-13, 08:00
I suspect next CM will target CPF OA ... :eek:
nope its not locked...take note for this minimum sum for 2nd property..its computed based on OA + SA ....not just OA onli
And if you have SA locked up in shares (via CPFIS), it will also count into the minimum sum. But you only need to maintain this minimum sum for 2nd ppty onwards, even if your 1st ppty is fully paid up.
Assuming, initially you have additional cpf on top of the min sum but after using some to pay off your loan, it hit the min sum, you will not be able to use OA anyway. Same with the subsequently raising of min sum. If your OA+SA balance is below the subseq raised level, you can use OA to service your loan until its above the min sum level.
I suspect next CM will target CPF OA ... :eek:
must meet min sum in SA a/c and cannot touch, if want to buy pte pty?
'
Yes, toilet is right.
LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!
I just want to share about the equity term loan for those >55 years old.
In the past, u just need to take the value of property - MS and then the equity term loan is the LTV.
Now, the amount is Value of property - amount taken out - accured interest and then apply the LTV.
A lot of difference.
'
1st property - 100% of OA can be used
Not true. There is a max withdrawal limit. Once hit, cannot with from OA.... Unless Ms requirement is met.
LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!
i think toilet sounds nicer than siao...:D:D:D
Not true. There is a max withdrawal limit. Once hit, cannot with from OA.... Unless Ms requirement is met.
Think it's 1.2mio
buttercarp
07-03-13, 13:05
Not true. There is a max withdrawal limit. Once hit, cannot with from OA.... Unless Ms requirement is met.
http://mycpf.cpf.gov.sg/CPF/my-cpf/buy-house/BH5.htm
See under section C :
"You can use your Ordinary Account savings, and the future monthly CPF contributions to your Ordinary Account to pay for the property and/to service the monthly instalments of the housing loan. The total amount of CPF you may withdraw cannot exceed the VL."
(The VL- valuation limit is the lower of property price or property value at the time of purchase.)
LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!
butter jiejie is very cute one :D
I just want to share about the equity term loan for those >55 years old.
In the past, u just need to take the value of property - MS and then the equity term loan is the LTV.
Now, the amount is Value of property - amount taken out - accured interest and then apply the LTV.
A lot of difference.
I thought the second scenario has been the case all along? How long ago was the first scenario possible?
The accrued interest can be a LOT over many years (it's 2.5% compounded). That's why I had recommended people not to use CPF for paying housing unless they really have cash flow problem. Because whenever you want to take a new loan or want to sell your property, all those accrued interest are factored in and your loan amount is a lot less or your sale proceeds payable in cash are a lot less than what you expect.
Those are the disadvantages of using CPF for housing. You can't monetise the full potential of the value of your property in the future because not only the principal is locked in but also the accrued interest.
I thought the second scenario has been the case all along? How long ago was the first scenario possible?
The accrued interest can be a LOT over many years (it's 2.5% compounded). That's why I had recommended people not to use CPF for paying housing unless they really have cash flow problem. Because whenever you want to take a new loan or want to sell your property, all those accrued interest are factored in and your loan amount is a lot less or your sale proceeds payable in cash are a lot less than what you expect.Ya, my accrued interest already 10k, iirc
Ya, my accrued interest already 10k, iirc
My accrued interest is a few HUNDRED k.
Don't wait until you are 50 to find that out. Just when you think you can borrow against your existing properties......you realise......:doh:
Got a question to seek advice from gurus here. Say when u start financing your property, the MS was at $67,500 and now that the MS has raised to $69,500. Will your cpf MS need to bump up by $2k before you can use it or will it be at $67,500 when the drawdown of your loan started?
Appreciate any advice. Thanks.
Yes, min. sum always increasing. When I called up CPF recently, I was told the next increase is happening this July.
The accrued interest can be a LOT over many years (it's 2.5% compounded). That's why I had recommended people not to use CPF for paying housing unless they really have cash flow problem. Because whenever you want to take a new loan or want to sell your property, all those accrued interest are factored in and your loan amount is a lot less or your sale proceeds payable in cash are a lot less than what you expect.
Those are the disadvantages of using CPF for housing. You can't monetise the full potential of the value of your property in the future because not only the principal is locked in but also the accrued interest.
钱生钱, you gotta start somewhere, so easy to say, aiya should not have touched CPF, but when younger, you do need the CPF to spin off your first or 2nd ppty. those who paid alot of cash for 1st ppty without touching CPF is probably those who started old.
anyway, if you have 2 ppty, the rationale is that you use CPF to buy house, then the rental come to your pocket. it is likely "transferring" money fr CPF to pocket. if you are prudent, that rental will eventually spiral and buy you that third house.
me give up on my CPF already..
:o
phantom_opera
07-03-13, 14:55
2.5%pa compound is peanut lah ... with inflation running at 5.5%, real return is -2.5%pa
only CPF SA at 4% with first 60k at 5% can barely survive
CPF OA rate was much higher b4 1992 also btn 1995-1998
http://mycpf.cpf.gov.sg/CPF/my-cpf/buy-house/BH5.htm
See under section C :
"You can use your Ordinary Account savings, and the future monthly CPF contributions to your Ordinary Account to pay for the property and/to service the monthly instalments of the housing loan. The total amount of CPF you may withdraw cannot exceed the VL."
(The VL- valuation limit is the lower of property price or property value at the time of purchase.)
See "total amount of cpf you may withdraw cannot exceed the VL" . This is the withdrawal limit I'm talking about. overtime, you will reach this limit before your loan is fully repaid as you need to factor in the loan interest.
2.5%pa compound is peanut lah ... with inflation running at 5.5%, real return is -2.5%pa
only CPF SA at 4% with first 60k at 5% can barely survive
CPF OA rate was much higher b4 1992 also btn 1995-1998
altho' peanuts.. but better than many products out there...
So, if I use all my OA CPF to buy my first property but have no more input into my CPF since not working. I pay instalment in cash and with partner. What will happen when it comes to retirement age and CPF have no money to transfer to my retirement account?
I know if I sell my house after the retirement age, the principal and accrued will go back into my CPF. But if I change house before retirement age or stay in this 1st property all the way, then I wont have to put money back into my CF right?
Does anyone know?
So, if I use all my OA CPF to buy my first property but have no more input into my CPF since not working. I pay instalment in cash and with partner. What will happen when it comes to retirement age and CPF have no money to transfer to my retirement account?
I know if I sell my house after the retirement age, the principal and accrued will go back into my CPF. But if I change house before retirement age or stay in this 1st property all the way, then I wont have to put money back into my CF right?
Does anyone know?CPF board will always demand that you have the min sum in your cpf. Either top up w cash or another person's cpf (but got other requirements) or can't use it... Not sure though about any latest news...
Got 1 more question here which I can't find any information on...
Is there a minimum percentage of ownership before one can use his/her cpf to service the mortgage loan? Say co owners each have 50% ownership of the property, so can use their cpf. If 20% ownership can still use cpf? 1% how?
So, if I use all my OA CPF to buy my first property but have no more input into my CPF since not working. I pay instalment in cash and with partner. What will happen when it comes to retirement age and CPF have no money to transfer to my retirement account?
I know if I sell my house after the retirement age, the principal and accrued will go back into my CPF. But if I change house before retirement age or stay in this 1st property all the way, then I wont have to put money back into my CF right?
Does anyone know?
From the CPF website:
For members who are unable to set aside the full MS in cash, their property bought with their CPF savings will be automatically pledged, for up to half of their MS. Subject to your share of the property and with the consent of the other owner(s). Further details on the website.
http://mycpf.cpf.gov.sg/CPF/my-Cpf/reach-55/Reach55-2.htm
If you change house before retirement age, the principal and accrued will have to go back into your CPF.
Got 1 more question here which I can't find any information on...
Is there a minimum percentage of ownership before one can use his/her cpf to service the mortgage loan? Say co owners each have 50% ownership of the property, so can use their cpf. If 20% ownership can still use cpf? 1% how?
As far as I am aware, you can use CPF no matter what the % ownership. But please check with your lawyer and CPF board directly on this.
As far as I am aware, you can use CPF no matter what the % ownership. But please check with your lawyer and CPF board directly on this.
Technically should be can use all if this is first property.
1%?
Very chek ark leh...
Technically should be can use all if this is first property.
1%?
Very chek ark leh...This is not for first property leh.... I was thinking of using my cpf to help service my dad's property without having to transfer ownership to me and then paying that huge amount of STUPID ABSD amounting to more than S$100 000... So just take 1% ownership and pay couple of thousand to start using my cpf lor... Come to think of it.. quite ridiculous for govt to tax us so much who wants to help our parents. My cpf is not used so decided to help my parents but thinking of how to minimize the cost when helping my parents! :rolleyes:
This is not for first property leh.... I was thinking of using my cpf to help service my dad's property without having to transfer ownership to me and then paying that huge amount of STUPID ABSD amounting to more than S$100 000... So just take 1% ownership and pay couple of thousand to start using my cpf lor... Come to think of it.. quite ridiculous for govt to tax us so much who wants to help our parents. My cpf is not used so decided to help my parents but thinking of how to minimize the cost when helping my parents! :rolleyes:
OIC. Then can only use above half of MS. Currently the amount in OA + SA must be 74k.
Do look out for accrued interest if you use much of your CPF for your housing loans, as others have mentioned. The compounded amount over 30 years will scare you.
OIC. Then can only use above half of MS. Currently the amount in OA + SA must be 74k.
Do look out for accrued interest if you use much of your CPF for your housing loans, as others have mentioned. The compounded amount over 30 years will scare you.
I was told by cpf that if one is over 55, then other than 50% of minimum sum, one can withdraw the balance as a lump sum or yearly depending on the preference. If that is correct, then I think in 30 years time, the compounded interest amount should be able to be withdrawn. Is this reasoning correct?
I was told by cpf that if one is over 55, then other than 50% of minimum sum, one can withdraw the balance as a lump sum or yearly depending on the preference. If that is correct, then I think in 30 years time, the compounded interest amount should be able to be withdrawn. Is this reasoning correct?You don't know what will happen in 30 years. 20 years ago, people thought they can draw out when they turn 55/60 years old. Then when they are 55/60 years old, govt say cannot... must wait till 62/65 years old... maybe in 30 years, you can only draw out when you turn 80? :scared-1:
OIC. Then can only use above half of MS. Currently the amount in OA + SA must be 74k.
Do look out for accrued interest if you use much of your CPF for your housing loans, as others have mentioned. The compounded amount over 30 years will scare you.Thank you for your sharing!
I was told by cpf that if one is over 55, then other than 50% of minimum sum, one can withdraw the balance as a lump sum or yearly depending on the preference. If that is correct, then I think in 30 years time, the compounded interest amount should be able to be withdrawn. Is this reasoning correct?
I guess so... If not, many people will owe many hundreds of k.
You don't know what will happen in 30 years. 20 years ago, people thought they can draw out when they turn 55/60 years old. Then when they are 55/60 years old, govt say cannot... must wait till 62/65 years old... maybe in 30 years, you can only draw out when you turn 80? :scared-1:
What happen when at 80 already also cannot draw out leh ??? :banghead:
Then they said converted to CPF LIfe annuity liao... you can only get drip by drip by drip for old age until your last breath still dripping.
Violation of human rights !!!! :beats-me-man:
You don't know what will happen in 30 years. 20 years ago, people thought they can draw out when they turn 55/60 years old. Then when they are 55/60 years old, govt say cannot... must wait till 62/65 years old... maybe in 30 years, you can only draw out when you turn 80? :scared-1:
Yes, 30 years down the road is too far out to be certain.
However, I am referring to the excess above 50% minimum sum which as of today, you can withdraw all the excess above 50% min sum once you hit 55.
Regardless, this rule might also change but given the sentiments of the public as it is, I doubt this rule will change in the near future though anything can happen.
phantom_opera
18-07-13, 23:14
cpf 2012 report
48.7% able to meet CPF SA min sum (but never say how many top up with cash / pledge property) ... how come so low .. property value sky high liao
60% able to meet MA min sum
phantom_opera
18-07-13, 23:40
ok get back to year 2005 when cpf min sum was only 90k
In 2005, 57,754 members were brought into
the Minimum Sum Scheme. Of these, 3,118 bought
annuities, 24,163 pledged their properties and
13,940 left their Minimum Sum either with the
banks or the Board. The remaining 16,533 were
members who had no Minimum Sum to set aside
as they had small balances
... so at time about half "pawn" their property for min sum and 28% had small balances :beats-me-man:
=====> looks this is so bad that in 2012 CPF dares not even reveals the breakdown :rolleyes:
phantom_opera
18-07-13, 23:53
2009 was the last year CPF breaking it down for us
In 2009, 80,969 members were brought into the Minimum Sum Scheme. Of these, 34,387 pledged their properties and 26,007
left their Minimum Sum either with insurance companies or CPF Board. The remaining 20,575 comprised members who had
no Minimum Sum to set aside as they had small balances
42% pawned their properties, 25% had small balances
so only top 20% can hit min sum at 2009 without pawning properties, wondering how many top up with cash :p
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