Changes To CPF Usage On Resale Flat May Not Be Good For Young Couples, Here’s Why!

Are you a young Millennial, pondering over whether to buy a resale flat or a BTO flat?

The Ministry of National Development has introduced some changes to the policies regarding the use of CPF and HDB loans that took effect from 10 May onwards.

These changes appear to allow for greater flexibility of your CPF to finance your new residential property.

But based on my research, it seems like a disadvantage for any young millennial couples looking for a resale home.

How to understand the policy changes to "OLD" resale flats if you are buying one today

There are old resale flats and relatively new resale flats, these changes mainly address the old resale flats.

"Old" resale flats used to be defined as 40y and above flat but the definition of "old" based on this policy change has changed and here's why.

First, let us compare the new policies to the old policies, you’ll need to understand that…

  • PREVIOUS Policy: The length of the lease of your targeted residential property is the determining factor for the CPF and HDB loans amount you can use to finance on your property.
  • CURRENT Policy: You and your spouse's age becomes the determining factor. The property must cover the younger of you to at least the age of 95

For easier understanding of the criteria for CPF usage and HDB loans, I’ve arranged it in a table below:

*Age: Age of youngest buyer

CPF Usage

(Valuation Limit)




Remaining Lease > 60 years

Remaining Lease > 95 – Age


30 years< Remaining Lease < 60 years

20 years< Remaining Lease< 95 – Age

HDB Loan



90% LTV Limit

Remaining Lease > 60 years

Remaining Lease > 95 years– Age


Remaining Lease > 80 years – Age

20 years < Remaining Lease < 95 years – Age

You can also refer to this infographics by the Housing & Development Board Singapore:

                                                  Source: Housing Development Board Singapore

                                                          Source: Housing Development Board Singapore

Age + 4 years formula and why I feel it is disadvantageous

There is an unwritten formula that I've seen in forums which seek to address how to know if the resale property you want to buy can be fully payable by CPF.

It is age (of the younger of you and your spouse) + 4 years. 

​​You can check it out and it works.

As a young millennial, this current formula seems disadvantageous to me because more resale flats will be deemed too "old" for me. 

If I apply this formula to age 25, any resale flat above age 29 will be deemed too "old".

How much of your CPF can you use?

I’ll also further explicate this issue using 2 scenarios below:

Scenario 1: You (age 30) and spouse (age 25) just got married and are buying your first resale home.

Type: 5-room resale HDB flat

Lease: 85 years remaining lease


Age of youngest buyer (spouse): Age 25 (covered until the age of 95)
Maximum CPF Usage

100%* Valuation Limit


100%* Valuation Limit


HDB Housing Loan

90% Loan-to-Value


90% Loan-to-Value


Hence, you can use the maximum CPF usage and your HDB housing loan limits are not affected by the updated policies.

Scenario 2: You (age 25) and spouse (age30) just got married and are buying your first resale home.

Type: 4-room resale HDB flat

Lease: 65 years remaining lease


Age of youngest buyer (you): Age 25 (NOT covered until the age of 95) 

Maximum CPF Usage

100%* Valuation Limit


90% Valuation Limit


HDB Housing Loan

90% Loan-to-Value


81% Loan-to-Value


Hence, the maximum CPF usage is reduced by $43,000 while the HDB housing loan is reduced by $38,700.

Basically, if the younger buyer (You in this situation) is not covered until the age of 95, the CPF usage and HDB housing loan will be pro-rated.

For more information about the changes, you can read MOM's press release here.

What experts say and who benefits

With better clarification, do you think the changes to the policies could affect your decision in buying a house?

Let’s first look at the video attached below to hear what experts think.

“I think this would benefit the older households as they have more choices, in the past, they would probably have to look for property which is less than 40 years old. 

This also give a new lease of life for the older property especially those property with (leases) of 60 years, now we can make older properties more marketable and affordable for people who can use CPF.”

-Professor Sing Tien Foo

Director, Institute of Real Estate Studies

According to the video, young buyers are looking into old resale flats to move closer to their parents or workplaces, but is it worth it?

Do the new policies give you as much flexibility for the usage of CPF as the experts claimed? 


  • Gives buyers more flexibility to use their CPF to pay for their HDB flat without limitations posed by the old rules, which only allowed buyers to choose residential properties with leases of at least 60 years if they wanted to tap on their CPF to buy it.


  • Young buyers in their twenties would not be allowed to use their CPF to the full Valuation Limit of resale flats with remaining leases of 74 years or less.
  • This will encourage the buyer to take up loans on top of CPF to buy a rapidly depreciating asset for an HDB flat that will run out of its lease soon. Hence, ending up with negative equity with insufficient sum to even put back into CPF if he or she tries to sell it later.

If you feel the pros and cons is too lengthy, this is my take: 

These changes reduce the choices of resale flat for young millennials to buy BUT increase the resale flat options for mature couples/families to buy.

Should you look for Resale HDB or BTO (built-to-order)

If you are not entitled to buy a BTO because of income ceiling ($12,000) currently or for any other reason, then this section may not apply to you.

But if you are entitled, this section is to weigh for you the pros and cons of Build-To-Order (BTO) who has sent oversubscribed launches frequently.

Read also: Why I like the Sales of balance flat or Re-Offer of Balance Flats schemes

As a young millennial planning to settle down later, preferably into my late 20s, I would prefer a BTO flat over a resale flat. Here’s why…

  • Price

New upcoming woodlands BTO $184k to $295k.

Resale BTO for a similar flat priced at $320k.

The price of the BTO flat would certainly be cheaper than most resale flats.

  • Environment

In an interview, some Millennials have voiced their preference towards a BTO flat. Typically, the  neighbourhood around BTO flats will be younger and more vibrant.

A comparison of looks can be seen below

However, there are trade-offs to this, the average waiting period for BTO flats to be built is 2.5 to 4 years.

Furthermore, successfully getting a BTO flat is a feat itself because of stiff competition over BTO flats. If you’re unlucky, you might not get a good queue number or you may have to wait indefinitely for one.

It must be mentioned that resale flats are entitled to grants. This grants can be substantial and reduce your overall cost to buying your HDB flat. I've a summary of it below.


The changes in the policies of CPF usage and HDB housing loans may allow for greater flexibility in the use of CPF.

These new changes may not be advantageous to you if you are a millennial looking for a first resale house. You would find more resale flats would be deemed "OLD" based on this current formula to you. 

But maybe it is too soon to judge, let me hear your thoughts!

Last updated on June 10th, 2019 at 11:05 am

The Astute Parent: A parent who has a sharp acumen on sieving through 'alien' financial jargon to dish out bite size financial tips from a parent's perspective.
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