Most Singaporeans prefer to service their mortgage using their CPF Ordinary Account (CPF OA). In fact, you are probably wondering why some Singaporeans service their mortgage in cash, when the CPF OA funds is “money they can’t spend anyway”.

Regardless of whether you use a private bank loan or a HDB Concessionary Loan, you always have the option to pay with your CPF OA. In general, most Singaporeans are able to “close an eye” and not pay attention to mortgage rates when using their CPF.

This is because the CPF OA interest rate is up to 3.5% (for the first $20,000). By contrast, a HDB loan charges 2.6% interest (at the time of writing), and most bank loans range between 2-3% interest. As such, your CPF OA funds theoretically grow faster than you spend them.

However, there are four good reasons to service your mortgage in cash ...