Cpf Cap

[MaCe 3]

ST FORUM

Jan 28, 2008

Help young couples: Cut CPF cap for housing

I WONDER how many Singaporeans are aware they cannot use their CPF savings to pay their housing loan fully.

I did not realise this until I received a letter from the authorities earlier this month which said we could not withdraw more CPF funds to pay for our flat.

Thus, the balance had to be serviced in cash even though we still make monthly CPF contributions.

The reason given by the CPF Board is as follows (quoted from a letter sent to us after repeated appeals to the CPF Board via our MP):

'The primary objective of CPF is to help members save for old age. We must balance the home ownership objective with the retirement objective. This is done by capping the withdrawal of CPF for a property up to the Valuation Limit (VL), that is the purchase price of the property. Once members have withdrawn their CPF up to the VL, they can only withdraw further CPF if they can set aside Minimum Sum cash component in their CPF Special and Ordinary accounts, this amounts to $120,000.'

Can an exception be made for young couples like us who have many other commitments - young children, aged retired parents - and as a result are not cash-rich at present.

What is more, we have many more years to save towards retirement.

Can we therefore be allowed to service our housing loan fully via CPF, given that this is our first flat?

Lim Keng Chiew

one of the comments

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Latest comments

I wonder how old is that writer.

Maybe he's around 24-28yrs old and he's buying at $350-$400k HDB flat?

If that's the case, "head not so big, don buy a big hat"...

Posted by: Knightmare at Mon Jan 28 15:08:03 SGT 2008

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http://www.straitstimes.com/ST%2BForum/Sto...ory_200732.html

[raincole 0]

How did the couple manage to get a loan that exceed the VL?

Edited January 29, 2008 by raincole

[MaCe 3]

How did the couple manage to get a loan that exceed the VL?

there is a separate VL figure used by CPF for pple using bank loans.

as long as you are under HDB loan...this doesnt apply.

[karen77sg 0]

ST FORUM

Jan 28, 2008

Help young couples: Cut CPF cap for housing

I WONDER how many Singaporeans are aware they cannot use their CPF savings to pay their housing loan fully.

I did not realise this until I received a letter from the authorities earlier this month which said we could not withdraw more CPF funds to pay for our flat.

Thus, the balance had to be serviced in cash even though we still make monthly CPF contributions.

The reason given by the CPF Board is as follows (quoted from a letter sent to us after repeated appeals to the CPF Board via our MP):

'The primary objective of CPF is to help members save for old age. We must balance the home ownership objective with the retirement objective. This is done by capping the withdrawal of CPF for a property up to the Valuation Limit (VL), that is the purchase price of the property. Once members have withdrawn their CPF up to the VL, they can only withdraw further CPF if they can set aside Minimum Sum cash component in their CPF Special and Ordinary accounts, this amounts to $120,000.'

Can an exception be made for young couples like us who have many other commitments - young children, aged retired parents - and as a result are not cash-rich at present.

What is more, we have many more years to save towards retirement.

Can we therefore be allowed to service our housing loan fully via CPF, given that this is our first flat?

Lim Keng Chiew

one of the comments

_____________________________________________________________

Latest comments

I wonder how old is that writer.

Maybe he's around 24-28yrs old and he's buying at $350-$400k HDB flat?

If that's the case, "head not so big, don buy a big hat"...

Posted by: Knightmare at Mon Jan 28 15:08:03 SGT 2008

______________________________________________________________

http://www.straitstimes.com/ST%2BForum/Sto...ory_200732.html

Hi Mace, yes, I am aware of it years ago when HB and I wanted to pay off our housing loan for our previous hse and was not allowed to do so bcos of the cap. We bo pian, bcos we dun wanna pay in cash, therefore we did not settle in full...

Somehow or rather, I feel tat tis is unfair leh....how come our CPF got money, but cannot pay in full wif CPF??? It is not as if we are emptying our CPF! We are also emptying our CPF the first time we buy the flat wat!

[MaCe 3]

Hi Mace, yes, I am aware of it years ago when HB and I wanted to pay off our housing loan for our previous hse and was not allowed to do so bcos of the cap. We bo pian, bcos we dun wanna pay in cash, therefore we did not settle in full...

Somehow or rather, I feel tat tis is unfair leh....how come our CPF got money, but cannot pay in full wif CPF??? It is not as if we are emptying our CPF! We are also emptying our CPF the first time we buy the flat wat!

welcome to the first world paradise.

[raincole 0]

there is a separate VL figure used by CPF for pple using bank loans.

as long as you are under HDB loan...this doesnt apply.

Was it something in the past??? Cos now I know the bank also require valuation report which is something not "required" in the past...... it comes with the introduction of the HLE.

[Phantom 1]

One of the rationale why loans under HDB are not applicable is because the government feels that if you have the earning capability of more than 8k a month, then you also should be able to set aside more cash for the future cash payment for the house.

Its like :

if you make less than 8k a month ->

1st priority is housing 2nd priority retirement

if you make more than 8k a month / take private loan ->

1st priority is retirement 2nd priority housing

anyone can to expand on this?

Edited January 30, 2008 by Phantom

[applefreak 1]

one of the lessons we learned from earlier generations is that

singaporeans will retire asset-rich-cash-poor coz all the money go towards paying for hdb liao

that's why you see a lot of retirees complaining about rising living standards but living in 5-rm flats

most of them can't bear to sell as they have lived in the estate for years and known their neighbours for half their lives

so the VL was introduced to ensure that most will have enough to retire without having to uproot so that they have the money to retire

the VL for bank loan is more targeted at pple who already taken hdb loan and housing subsidy

so it is believed that they have 'earned' some from the buying and selling

i won't say this is a good or bad policy

but i do believe that this is necessary as most of our younger generations have the weird schizo way of looking at cpf

when they get a hdb flat, they believe in drawing every single cent from cpf to pay for the flat

but ask them about retirement planning and they'll tell you they have cpf???

[MaCe 3]

i didnt know this till about until 2yrs ago -

just so happen i was bored till got nothing better to do.

pick up the sg nitetime tabloid newspapers my parents bought.

there was a daily or weekly column for readers to post questions and have them answered by a qualified lawyer.

the story goes -

a couple backside itchy switched from hdb loan to bank loan for "better" interest. thinking they made a smart move until when they are left with about $57k more to clear, they receive the BOMB from cpf..bla bla bla - the same story above.

With immed effect they got to pay MONTHLY CASH of $1200+ to service their loan despite the fact that their total on going monthly cpf contribution is over $1400.

lawyer replied - there were BLACK n WHITE on this for years, just that you didnt go find out.

[applefreak 1]

i knew of the cap the moment they implements it

how come still got pple don't know?

find that it's the buyers' responsibility to find out this kind of things before committing loh

cannot afford don't buy such an expensive unit, period.

[MaCe 3]

i knew of the cap the moment they implements it

how come still got pple don't know?

find that it's the buyers' responsibility to find out this kind of things before committing loh

cannot afford don't buy such an expensive unit, period.

dont be surprise....many didnt know.

i actually went around asking colleagues/friends/relatives...none knew that.

some were so tempted by the free gifts, simi low interest promises and nearly switch.

[applefreak 1]

sometimes it's no wonder we have so many rules and regulations in place

coz many can't think for themselves and got to be nannied by the government

[l_club23 0]

one of the lessons we learned from earlier generations is that

singaporeans will retire asset-rich-cash-poor coz all the money go towards paying for hdb liao

that's why you see a lot of retirees complaining about rising living standards but living in 5-rm flats

most of them can't bear to sell as they have lived in the estate for years and known their neighbours for half their lives

so the VL was introduced to ensure that most will have enough to retire without having to uproot so that they have the money to retire

the VL for bank loan is more targeted at pple who already taken hdb loan and housing subsidy

so it is believed that they have 'earned' some from the buying and selling

i won't say this is a good or bad policy

but i do believe that this is necessary as most of our younger generations have the weird schizo way of looking at cpf

when they get a hdb flat, they believe in drawing every single cent from cpf to pay for the flat

but ask them about retirement planning and they'll tell you they have cpf???

Not enough money even now, plan for what retirement...

Anyway, shouldn't the onus be on individuals to plan for their own futures?

CPF and all its rules just restricts the flexibility of MY money...

[applefreak 1]

ya if all singaporeans planned their own future instead of relying on the government for hand outs, then yes the onus is on the individual

but look around us, how many really planned for retirement?

and how many expect the government to help?

look at the young couple in the article, NO planning whatsoever then expect the government to change the rules just for their own purpose...

looking around at the welfare states, people who are working pay lots of taxes to support those who didn't plan

is that fair?

[MaCe 3]

ya if all singaporeans planned their own future instead of relying on the government for hand outs, then yes the onus is on the individual

but look around us, how many really planned for retirement?

and how many expect the government to help?

look at the young couple in the article, NO planning whatsoever then expect the government to change the rules just for their own purpose...

looking around at the welfare states, people who are working pay lots of taxes to support those who didn't plan

is that fair?

i dont mind.

infact just compare with hongkong is good enough....pple there can start doing biz with very little restrictions.