Free Advice/Discussion on Bank Mortgage loan

[Property_Broker]

Actually, I don't know if I will sell 5 years down. My concern is that when I sell my house, I will have to take my sale proceeds and pay back the CPF interest to my OA before I can buy another house to stay. Don't know if I'm making a loss here because I'm paying CPF for my own interest through my sale proceeds. And if I sell at a loss, maybe I'm screwed because I need to fork out own pocket to pay back the CPF interests.

Hi @alatus ,

If it is a negative sale, you do not necessary need to use cash and top up the different as well.



https://www.cpf.gov.sg/member/infohub/educational-resources/sales-proceeds-after-selling-your-home

By the way the accrued interest and CPF usage will go back to your CPF OA account. You can use it for the next property provided you are not being restrict by the CPF retirement scheme.

 

[Property_Broker]

I have another question about mortgage. With the current high interest rate, is it a good idea to still stretch my loan tenure to the max of say 25 years or shorten it as much as possible by paying with all of my monthly CPF contribution?

I can't decide which way is better. The the interest rate is high now and it feels better to shorten the tenure or even pay lump sum. But at the same time, I feel like I should also prioritise to converse cash in this kind of market and maybe the interest rate will go down along the way if I stretch the tenure to the max?

Assuming if your interest rate is 4% and you stretch your loan tenure to 25 years, you will be paying lesser monthly installment.

Which mean you will be paying lesser to the "Principal Payment" monthly and as a result you will have higher " Outstanding Principal". So you will pay more interest.

Personally I will recommend that as long as your cash/cpf is not earning more than the mortgage rate "Example 4%", you should do partial prepayment/full redemption/ reduce the loan tenure. It will help you save more on interest.

So if your concern is on interest, you should reduce the loan tenure.


In the event if interest rate drop in the future, you wish to extend the loan tenure. You can do so as well.

 

[elvintay07]

Assuming if your interest rate is 4% and you stretch your loan tenure to 25 years, you will be paying lesser monthly installment.

Which mean you will be paying lesser to the "Principal Payment" monthly and as a result you will have higher " Outstanding Principal". So you will pay more interest.

Personally I will recommend that as long as your cash/cpf is not earning more than the mortgage rate "Example 4%", you should do partial prepayment/full redemption/ reduce the loan tenure. It will help you save more on interest.

So if your concern is on interest, you should reduce the loan tenure.


In the event if interest rate drop in the future, you wish to extend the loan tenure. You can do so as well.

If you don’t have a lot of liquidity, go for longer tenure.
Example 1
Loan $1mil over 25 years. Maybe monthly instalment is $$5,500

Example 2
Loan $1mil over 5 years. Monthly will balloon to $18,500

Although you save on interest, check whether you will risk defaulting or not. If you can’t pay, then bank may force sell your property

 

[Property_Broker]

If you don’t have a lot of liquidity, go for longer tenure.
Example 1
Loan $1mil over 25 years. Maybe monthly instalment is $$5,500

Example 2
Loan $1mil over 5 years. Monthly will balloon to $18,500

Although you save on interest, check whether you will risk defaulting or not. If you can’t pay, then bank may force sell your property

Yup. The most important factor for servicing the loan, it is the affordability.

No point that you want to save the interest and you end up default on the loan. The penalty and interest will outweigh them the saving.

 

[cheongking888]

Personally I will recommend that as long as your cash/cpf is not earning more than the mortgage rate "Example 4%", you should do partial prepayment/full redemption/ reduce the loan tenure. It will help you save more on interest.

In the event if interest rate drop in the future, you wish to extend the loan tenure. You can do so as well.

Can I do a partial repayment first then when the interest rate has gone down, I borrow more again either on refinancing or repricing?

Appreciate your advice.

 

[elvintay07]

Can I do a partial repayment first then when the interest rate has gone down, I borrow more again either on refinancing or repricing?

Appreciate your advice.

I think private property can but HDB cannot. Is that true?

 

[Property_Broker]

Can I do a partial repayment first then when the interest rate has gone down, I borrow more again either on refinancing or repricing?

Appreciate your advice.

Hi @cheongking888,

Yup. You can do partial prepayment if you want to bring down the outstanding loan balance. However please ensure that there is no penalty for partial prepayment.


You can get equity loan(aka cash out loan) for private property only. If it is HDB, you will not be able to do it.

@elvintay07 yup.

 

[jim889]

Can I do a partial repayment first then when the interest rate has gone down, I borrow more again either on refinancing or repricing?

Appreciate your advice.

read your loan documents lor.. the ans is in there

 

[elvintay07]

read your loan documents lor.. the ans is in there

If know the answer, no harm sharing. Take for example u see a man collapse and passer-by ask you for help. Imagine the answer is you run up to Kinokuniya and then read “the must have medical textbook for cardiologist”.

 

[jim889]

If know the answer, no harm sharing. Take for example u see a man collapse and passer-by ask you for help. Imagine the answer is you run up to Kinokuniya and then read “the must have medical textbook for cardiologist”.

first if dun noe how cpr then dun geh kiang .. may end up 越幫越忙

as for bank mortgage.. dun think there same terms and contract among the banks..

some bank allow this and that , some bank dun allow.. all depends on what he signed up for.. the answer can only be found in his contract for his own individual case..

 

[elvintay07]

This month Sora suddenly went back to 2.5-3%. Lol! Looks sibei cheap. Ironically is still F high but we think low because we expecting 4.75% + spread = 5.5%. !

 

[Property_Broker]

Happy new year folks~

27/12/2022
1m Sibor: 4.03%
3m Sibor: 4.25%

30/12/2022
1m SORA: 2.7776%
3m SORA: 3.0966%

Daily SORA has been transacted from 1.5529 to 3.1336 since 12/12/2022. It is 1.6525 based on 30/12/22.

It has caused 1m SORA drop from 3.5135 to 2.7776. Whereas 3m Sora is still trading around 3.0966.
It is no surprise that 1m SORA is closing lower than 3m SORA.

If the Daily SORA continues to trade below 3% for this month, it will be a very good news for SORA client.

Lets see if the banks will start to offer lower fixed rate. If it happen then it might be a sign that interest rate might hit peak already.

Happy Weekend folks!


09/01/2022
1m Sibor: 4.13%
3m Sibor: 4.25%


13/01/2023
1m SORA: 2.5285%
3m SORA: 3.0115%

Daily SORA was transacted below 3% for around 3-4 weeks. However it has moved back above 3% starting 9/1/23.

I feel that 1m SORA will start to creep up to 3% and 3m Sora should be maintaining around 3% for this month.

So far best 2 years fixed is around 3.85% and floating rate 3m Sora + 0.5~0.55%

 

[elvintay07]

Happy Weekend folks!


09/01/2022
1m Sibor: 4.13%
3m Sibor: 4.25%


13/01/2023
1m SORA: 2.5285%
3m SORA: 3.0115%

Daily SORA was transacted below 3% for around 3-4 weeks. However it has moved back above 3% starting 9/1/23.

I feel that 1m SORA will start to creep up to 3% and 3m Sora should be maintaining around 3% for this month.

So far best 2 years fixed is around 3.85% and floating rate 3m Sora + 0.5~0.55%

Heard got some more big guys coming into SG to setup business. Which means these enterprises will need a lot of money. So not sure whether this will drive our Sora higher.

 

[shin89]

Anyone using DBS home loan and sees multiple interest rate charges a month? I assumed it would just be once.

 

[Property_Broker]

Anyone using DBS home loan and sees multiple interest rate charges a month? I assumed it would just be once.

Hi @shin89

I checked in with my banker before on the DBS (HDB loan).

DBS Housing loan is calculated on a daily basis.
There will be twice transaction reflected.

1. Interest 1st to 14th display interest - 15th bank deduction
2. 15 to 30/31 display interest on the new balance

Usually will see 2 computation a month.

But if u log in eg 5 Jan, then it will also auto generate 1st - 4th (the day before) to generate an accurate total amount payable as of log in date.

I am not very sure on the private loan already.

Anyway you can call in DBS mortgage hotline (6333 0033) to ask on it. The perk of going with DBS housing loan is that there is a direct hotline to ask on your loan. So you can tap on the perk lol.

 

[shin89]

Hi @shin89

I checked in with my banker before on the DBS (HDB loan).

DBS Housing loan is calculated on a daily basis.
There will be twice transaction reflected.

1. Interest 1st to 14th display interest - 15th bank deduction
2. 15 to 30/31 display interest on the new balance

Usually will see 2 computation a month.

But if u log in eg 5 Jan, then it will also auto generate 1st - 4th (the day before) to generate an accurate total amount payable as of log in date.

I am not very sure on the private loan already.

Anyway you can call in DBS mortgage hotline (6333 0033) to ask on it. The peak of going with DBS housing loan is that there is a direct hotline to ask on your loan. So you can tap on the perk lol.

Thanks for your reply!

This is really helpful compared to what DBS told me over the phone by just saying that the loan is calculated on a daily basis and what is charged is correct, just have to trust them lol.

 

[ctstalin]

@Property_Broker

I am thinking of buying another resale HDB and then sell my existing flat which I am still servicing my mortgage with HDB loan. I have no other debt obligations.

Our income ceiling have exceeded the max to qualify for HDB loan so I have to borrow from bank for my next purchase. Will the bank take into account the mortgage that I am current servicing and will only give 45% LTV, even though I definitely have to sell my current place within 6 months and will eventually be servicing one mortgage

 

[Property_Broker]

Thanks for your reply!

This is really helpful compared to what DBS told me over the phone by just saying that the loan is calculated on a daily basis and what is charged is correct, just have to trust them lol.

Hi @shin89 ,


No problem! Happy to help out the forum folks!

Haha! It is a different era now. I feel that there must be more explanation on it. People will ask "why" rather than "yes... yes.." already.


Cheers!

 

[Property_Broker]

@Property_Broker

I am thinking of buying another resale HDB and then sell my existing flat which I am still servicing my mortgage with HDB loan. I have no other debt obligations.

Our income ceiling have exceeded the max to qualify for HDB loan so I have to borrow from bank for my next purchase. Will the bank take into account the mortgage that I am current servicing and will only give 45% LTV, even though I definitely have to sell my current place within 6 months and will eventually be servicing one mortgage

Hi @ctstalin ,


Nope. The bank will not take into your existing HDB loan commitment as the bank know that you cant hold 2 HDB and you will be force to sell off your existing HDB eventually. Hence they will exclude it for the MSR/TDSR calculation.

So you still can loan up to 75% of the purchasing price or valuation(Whichever is lower).

You can PM me if you need further clarification/question if you prefer to keep your information P&C.

 

[ctstalin]

Hi @ctstalin ,


Nope. The bank will not take into your existing HDB loan commitment as the bank know that you cant hold 2 HDB and you will be force to sell off your existing HDB eventually. Hence they will exclude it for the MSR/TDSR calculation.

So you still can loan up to 75% of the purchasing price or valuation(Whichever is lower).

You can PM me if you need further clarification/question if you prefer to keep your information P&C.

Swee! I have the answer I needed