CPF Minimum sum

[bakasa2002]

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]

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

[newbie11]

u need to top up to always maintain the current min sum requirement

[NorthernStar]

i guess nope if this is your first property..Yes for 2nd property onward..

[BigBoy]

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]

I heard from banker MS is 'locked' at the time drawdown is started. So I kanna smoke?

[BigBoy]

I heard from banker MS is 'locked' at the time drawdown is started. So I kanna smoke?

Double confirmed

[radha08]

Double confirmed

triple confirmed...

[toiletsiao]

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]

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]

I suspect next CM will target CPF OA ...

[Jaykj]

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.

[latour]

I suspect next CM will target CPF OA ...

must meet min sum in SA a/c and cannot touch, if want to buy pte pty?

[Laguna]

'

Yes, toilet is right.

LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!

[Laguna]

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.

[BigBoy]

'
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.

[radha08]

LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!

i think toilet sounds nicer than siao...

[Cupcakes]

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]

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.)

[roly8]

LOL, Butter, u addressed him as TOILET!!!!!!!!!!!!!

butter jiejie is very cute one

[chiaberry]

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.

[Cupcakes]

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

[chiaberry]

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......

[Tek888]

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.

[Shanhz]

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.

[roly8]

me give up on my CPF already..

[phantom_opera]

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

[BigBoy]

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.

[Shanhz]

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...

[Kite]

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?