CPF OA Interest Rate in 2026: Why 2.5% Matters for Home Buyers
The CPF Ordinary Account pays 2.5% a year, the legal minimum. How the rate is set, how it links to the HDB loan rate and what accrued interest means.
The CPF Ordinary Account (OA) pays 2.5% a year in Q4 2026. That is the legislated minimum, not the result of a formula. The formula gives a much lower number, so the minimum applies. For home buyers, the rate matters in two places: the HDB loan rate is set 0.1 percentage point above it, and CPF savings used for a home must be paid back with interest at the rate the OA would have earned.
How the rate is set
CPF reviews the OA rate every quarter. It is computed from the 3-month average of major local banks’ interest rates, subject to a minimum of 2.5% a year, according to CPF’s interest page.
That bank-rate figure was 0.32% for May to July 2026, per the same page. It is far below the floor. So the OA rate is the floor.
This is not new. In the Propwise database, the OA rate is 2.5% in every quarter from Q3 1999 to Q4 2026, based on CPF’s historical interest table to Q3 2024, then on CPF’s interest page and its quarterly releases. The latest value was recorded on 15 Sep 2026.
The rates that touch a home purchase
| Item | Rate | Status |
|---|---|---|
| OA interest | 2.5% a year | Quarter from 1 Oct to 31 Dec 2026 |
| HDB concessionary loan | 2.6% a year (OA rate plus 0.1 percentage point) | Unchanged for 1 Oct to 31 Dec 2026 |
| Special, MediSave and Retirement Accounts | 4.0% a year, the floor | Floor extended to 31 Dec 2027 |
| Extra interest, below age 55 | 1% on the first S$60,000 of combined balances, with at most S$20,000 from the OA | In force since 1 Jan 2016 |
| Extra interest, age 55 and above | 2% on the first S$30,000, then 1% on the next S$30,000 | In force since 1 Jan 2016 |
Source: CPF news release of 22 September 2026, checked in the Propwise rules database on 4 October 2026. Extra interest earned on OA money goes to the Special or Retirement Account, not the OA. The database records the HDB loan rate at 2.6% for Q4 2026.
Why it matters when you buy a home
The HDB loan is priced off the OA. CPF’s release states that the HDB concessionary rate is pegged 0.1 percentage point above the OA rate. While the OA sits at its 2.5% floor, the HDB loan stays at 2.6%. If the OA rate ever moved, the HDB rate would move with it. Our guide to the HDB home loan compares it with bank loans.
CPF used for housing comes back with interest. When you sell or transfer the property, you refund the CPF principal you withdrew plus accrued interest. CPF describes the interest as “the amount you would have earned if these savings were left in your OA”. CPF’s planning assumptions say that interest is calculated monthly and credited and compounded annually at the end of December.
So using OA money for a home has a price: the OA interest that money would have earned. In effect, you repay the OA with the interest it would have earned.
A worked example
This example uses S$20,000, the OA cap in the extra-interest rule, as a round number. It is not a recommendation. It assumes the OA rate stays at 2.5% and that interest compounds once a year.
- Year 1: S$20,000 × 2.5% = S$500. The balance owed to your OA is S$20,500.
- Year 2: S$20,500 × 2.5% = S$512.50. The balance is S$21,012.50.
After two years you would owe the S$20,000 principal plus S$1,012.50 of accrued interest. For scale, 2.6% on S$20,000 for a year is S$520, which is S$20 more than the S$500 at 2.5%. That S$20 is what the 0.1 percentage point is worth on S$20,000. A real loan balance falls as you repay it, so this is a comparison of rates, not a loan quote.
CPF calculates interest monthly, so real figures differ slightly. CPF’s housing dashboard shows your exact amount.
What this does not tell you
- The floor can change. The 2.5% is the legislated minimum today. This article says nothing about future quarters.
- It is not advice on using CPF or cash. Whether to use OA money, pay cash or take a loan depends on your savings, your age, your plans and your risk. See our guides on CPF and your home and buying before age 55.
- The example is simplified. It ignores monthly calculation, the extra interest on the first S$20,000 of OA money, and the limits on how much OA you can use. It also does not apply the special treatment for members who were 55 or older before 1 January 2013, which CPF mentions on its refund page.
- Other CPF rules apply. Usage limits, the lease-to-age-95 rule and the refund order at age 55 are not covered here.
