Older HDB flats will be subjected to pro-rated CPF usage.
Based on your information, this is the formula to calculate your CPF usage
Let us assume the following:
Remaining Lease : 56 years
Youngest Buyer Age : 39 years old
HDB Flat Price : $400,000
Remaining Lease of Property – 20 / 95 - Age of Youngest Buyer Using CPF - 20
56 - 20 / 95 - 39 - 20 = 36/36
Valuation Limit = 1
CPF Usage = 100% x $400,000 = $300,000
For a bank loan, you will be subjected to Withdrawal Limit: 120% of the Valuation Limit.
120% x $400,000 = $480,000
$480,000 is your Withdrawal Limit.
Assuming you are taking an HDB loan with a downpayment of $40,000 with a loan of $360,000 over a period of 25 years with an interest rate of 2.6%, your mortgage works out to $1,633.21.
With a Valuation Limit of $400,000, you will hit the limit in 18 Years 4 months. If you are unable to meet your Basic Retirement Sum of $93,000, you will need to pay your mortgage in cash.
We advise you to get the advice of an experienced agent who will be able to assist you.
Hope this answers your question.
Team PropertyGuru Read More