What Accrued Interest Is
When you sell a home bought with CPF, you return two things to your CPF account: the principal you withdrew and the accrued interest on it. CPF Board describes accrued interest as the interest your savings would have earned had they stayed in your Ordinary Account. It runs from the date you first used CPF for the home until the refund is made, and it keeps building even after the housing loan is fully paid.
It builds on every withdrawal: the downpayment, and each monthly instalment paid from CPF. Because interest is added to the total every year and then earns interest itself, the amount grows faster the longer you hold the home. A single $100,000 withdrawal at 2.5% a year carries about $44,830 of accrued interest after 15 years and about $85,394 after 25.
It is not a fee. The refund sits in your own CPF account and can be used for your next home, within the rules. If you are 55 or older, the refund first tops up your Retirement Account to your Full Retirement Sum.