The Valuation Limit is set once, at the point of purchase, using the lower of the two figures, price or bank valuation, and it does not move even if the property later appreciates. It applies to private property; HDB flats bought with an HDB loan are treated differently.
Up to the Valuation Limit, CPF Ordinary Account savings can be used for the down payment and monthly instalments without further restriction. Beyond the VL, CPF can still fund the mortgage, but only if the buyer has set aside the required CPF retirement sum, and only up to the higher Withdrawal Limit, which is typically 120 percent of the VL.
Understanding the VL matters most for buyers relying heavily on CPF for a higher priced private property, since it determines the point at which cash, rather than CPF, must start covering the mortgage.
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Book a free 30 minute callWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Verify current figures with IRAS, HDB, CPF Board, or MAS before making any decision.