How To Pay Your Housing Loan In Singapore
December 14, 2022
If you have a housing loan, you know that repaying your installments on time gives you peace of mind.
However, the repayment process can be tedious and financially draining, so you need other alternatives to pay for the loan, such as your CPF Ordinary Account (OA) savings.
So if you are wondering how to pay housing loan in Singapore, we will show you how to do just that.
How To Pay Housing Loan Using Your CPF OA
Your CPF OA funds can be used for education and housing costs. When used for the latter, CPF OA funds allow you to:
- Purchase a new residential property or HDB flat
- Make a downpayment
- Pay stamp duty and legal fees
- Subscribe to HDB flat Home Protection Scheme (HPS) premiums
So should you find out how to pay housing loan using CPF? Absolutely, because using CPF comes in handy.
Here’s how you should proceed doing so:
For A Bank Loan
To use your CPF OA funds to repay a bank loan, you must have your lawyer submit a request accompanied by your Letters of Consent, Authorisation, Agreement, and Declaration.
Once this is done, you will need to make a cash downpayment, which comprises 5% of the property’s purchase price. This will include any purchase balance not covered by the bank loan and any related fee.
Once you’ve completed the above, the funds will be available for withdrawal.
For A HDB Loan
To pay a HDB loan, you must complete and sign a CPF withdrawal form from a HDB branch.
It’s easy to get an estimate of how much of your CPF funds you can use. You just need to use a CPF Housing Calculator.
How To Pay Housing Loan Installments
Your first housing loan installment will be due one month after the loan has been disbursed. The installments are due on the first day of subsequent months until the loan has been fully repaid.
There are different ways to pay for your installments. You can use any of the following methods:
CPF OA Funds
To pay a HDB loan using CPF, fill up an online application to start, repay or revise your installment payment on the HDB website. You will also be requested to complete an HPS application.
If you have a bank loan, you can fill up the application through the bank’s eService. You can also use the following options to pay for the installments:
- PayNow via SGQR
- eNETS Debit
- Internet banking
- AXS: AXS Station (kiosk), AXS e-Station (online), and AXS m-Station
- Cash payment kiosks at HDB branches
Do note that if you are using your CPF funds to pay your monthly housing installments, you must be covered by the HPS of the CPF Board.
You can use the internet banking services provided by the following institutions to pay your home loan installments:
- POSB/DBS Bank
- OCBC Bank
- United Overseas Bank
eNETS Debit e-Services are also available on the HDB website. You must have an online banking account with one of the partner banks to participate.
- Standard Chartered Bank
- OCBC Bank
- United Overseas Bank
- POSB/DBS Bank
To pay housing loan installment using GIRO, you must submit a completed Interbank GIRO (IBG) application form. You can also obtain a pre-filled IBG application form from your “My HDBPage” if you are the flat owner.
But if you are not a flat owner, you’ll need to complete an IBG application form.
Once this is done and your bank approves your GIRO application, the GIRO start date will be sent to you. GIRO bank account deductions will be made on the 28th of each month for your housing loan’s installment payment.
If the first deduction attempt fails, a second attempt will be made on the sixth of the following month. Once it is successful, the GIRO payment will be made from your account on the last day of each month.
However, you will need sufficient funds in your GIRO account for the entire HDB loan payment process to go through.
Partial Capital Repayment
Your ability to make partial capital repayments using your CPF funds will depend on the type of loan you took.
With a HDB loan, you will need to have enough funds in your CPF OA funds to meet the maximum fund criteria you can spend on your property. Follow these steps:
- Submit an application to HDB using your Singpass
- Under the “My Flat” section, click on “Purchased Flat”
- Proceed to “Financial Info” and click on “Other Related Services”
- Look for the “Partial Capital Repayment/Redemption of Housing Loan” option
Once this is done, your application will be reviewed in three working days. You can also complete the CPF withdrawal form (PHS9) at a HDB branch.
However, you will need to make an appointment for this. To book one, use HDB’s e-Appointment system. Your application will be processed within five working days.
To make a partial payment for your housing loan with CPF, you will need to follow the following steps:
- Request authorisation from your home loan financier
- Verify that you have the maximum CPF savings you can use for your property and enough funds in your CPF OA. You can view your usage limit for your property on your Homeownership dashboard.
- Apply online using your Singpass. Your application will take five working days to be processed.
Before making a payment, you must first submit your request for a partial capital repayment on My HDBPage using Singpass. After you do so, you will receive an email acknowledging receipt of your request.
Payment may be made through any or a combination of the following:
- Cheque or cashier’s order
- PayNow via SGQR
- eNETS Debit
- AXS channels, including AXS Station (kiosk), AXS e-Station, and AXS m-Station
Cheque Or Cashier’s Order
For a HDB cashier order, please make the cheque or money order payable to “Housing & Development Board”. Cross it and write the following information on the back:
- Flat address
- HDB identification number
- The payment’s objective, such as “partial capital payback”
Lastly, send your cashier’s order to the HDB branch in charge of your flat before the scheduled date for the partial capital repayment.
For more information, refer to the earlier points on how to pay for your housing loan installments.
Paying Off Your HDB Loan Early
When it comes to how to pay housing loan, did you know you can pay off the entire HDB loan early without penalty?
You will need to use your “My HDBPage” to submit your request to pay off your debt. Look under “Other Related Services – Redemption of Housing Loan” after logging in.
After you make your request, the proposed redemption date will be set one month later.
When you submit your application, the amount and fees due for the loan will be calculated. Once your request has been successfully submitted to HDB, an acknowledgement will be emailed to the email address you provided, which will contain payment information to help you finish the redemption.
The payment modes used for payoff are similar to those used during partial capital repayment.
Late Payment Charges
The first of every month is the due date for installment payments. If you miss this deadline, a late payment fee will be charged based on the amount of the outstanding installment as of the end of the month.
From 1 Apr 2022 to 31 Mar 2023, the annual late payment charge rate is 7.5%. The rate is determined on 1 Apr and revised yearly.
At the end of each month, late payment penalties will be applied to the unpaid installment, rounded up to the nearest $0.05.
Any payment received from you will be applied first to any unpaid late fees. The remaining funds are then used to cover the other unpaid fees.
It’s Easy To Pay Your Housing Loan With CPF
Your CPF OA savings not only cater for your retirement needs but also allow you to pay for the purchase of your new home – and more importantly, pay off the housing loan.
The availability of multiple payment modes makes the process more convenient for you. So by learning how to pay housing loan, you can manage your debt obligations and avoid being penalised for late payments.
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