Free Advice/Discussion on Bank Mortgage loan

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shinshin

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hi, would like to seek your advice, i bought a BUC, intent to sell after TOP (around 5 year).

Option 1: $1.3Mil @ 25 years loan . Means i have to put $300K more down payment. Im ok but feels heart pain.

Option 2: $1.6Mil @ 35 years loan . Feels secure seeing $300k more cash in my account, can put in fixed deposit, do conservative investment etc. But the down side is the monthly installment: high interest component and very low principle repayment.

Which one would you advise?
 
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Zanahoria

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shinshin said:
hi, would like to seek your advice, i bought a BUC, intent to sell after TOP (around 5 year).

Option 1: $1.3Mil @ 25 years loan . Means i have to put $300K more down payment. Im ok but feels heart pain.

Option 2: $1.6Mil @ 35 years loan . Feels secure seeing $300k more cash in my account, can put in fixed deposit, do conservative investment etc. But the down side is the monthly installment: high interest component and very low principle repayment.

Which one would you advise?
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Investment property i always go for max leverage, coz u know you are not going to hold it for long. Get the loan package with no penalty incurred when sales,
 
Property_Broker

Property_Broker

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shinshin said:
hi, would like to seek your advice, i bought a BUC, intent to sell after TOP (around 5 year).

Option 1: $1.3Mil @ 25 years loan . Means i have to put $300K more down payment. Im ok but feels heart pain.

Option 2: $1.6Mil @ 35 years loan . Feels secure seeing $300k more cash in my account, can put in fixed deposit, do conservative investment etc. But the down side is the monthly installment: high interest component and very low principle repayment.

Which one would you advise?
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Yup.

I echo after @Zanahoria as well~

It is better to max out the loan amount and loan tenure if it is an investment property.

Since it is a BUC package, it means that it should not come with any lock in period. In the event if interest rate shot up to 4%+ again, you can do partial prepayment on the DISBURSED loan amount as well.

Please ensure that it come with "WAIVER OF CANCELLATION FEE DUE TO SALE".
 
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saintgtril

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Property_Broker said:
Yup.

I echo after @Zanahoria as well~

It is better to max out the loan amount and loan tenure if it is an investment property.

Since it is a BUC package, it means that it should not come with any lock in period. In the event if interest rate shot up to 4%+ again, you can do partial prepayment on the DISBURSED loan amount as well.

Please ensure that it come with "WAIVER OF CANCELLATION FEE DUE TO SALE".
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Zanahoria said:
Investment property i always go for max leverage, coz u know you are not going to hold it for long. Get the loan package with no penalty incurred when sales,
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H property_broker and sanatoria, happy new year. Please share the reason why for investment property, it is better to max tenor. I am under the impression that the longer the tenor, the more interest the borrower will incur. Thanks and happy new year to you and everyone!
 
Property_Broker

Property_Broker

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saintgtril said:
H property_broker and sanatoria, happy new year. Please share the reason why for investment property, it is better to max tenor. I am under the impression that the longer the tenor, the more interest the borrower will incur. Thanks and happy new year to you and everyone!
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Hi @saintgtril


Happy CNY to you.

In my personal view, i feel that cashflow and investment returns are the important factor for investment.

1) Investment return

I will deem that the investment property should give you 4%+ yield and whereas the loan interest rate is only 2%+.

So based on the example above, it is better to max the loan amount/tenure.

2) Cashflow.

If the loan tenure is longer, it mean that the monthly installment amount is lesser.
So you will have more cashflow. So you can have the reinvestment opportunity.
 
elvintay07

elvintay07

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Property_Broker said:
Hi @saintgtril


Happy CNY to you.

In my personal view, i feel that cashflow and investment returns are the important factor for investment.

1) Investment return

I will deem that the investment property should give you 4%+ yield and whereas the loan interest rate is only 2%+.

So based on the example above, it is better to max the loan amount/tenure.

2) Cashflow.

If the loan tenure is longer, it mean that the monthly installment amount is lesser.
So you will have more cashflow. So you can have the reinvestment opportunity.
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Yeah. If property increases at 4% and loan is 2%, this is huat kuat for life. That is how the rich become richer mah. All these built over hundreds of decades. Imagine over 100 years, the investment compounds at 10% per annum.
 
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minamikaze

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Property_Broker said:
Huat ah!

yea~ Fixed rate is still downtrend since Nov 2022~

Some banks revised their rate lower before CNY. So there is no indication that the rates are reversing. So it is good news everyone!
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Oh man. I repriced at 2.65% a month ago :( what's the current best repricing rates for a 1.2M loan?
 
Property_Broker

Property_Broker

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minamikaze said:
Oh man. I repriced at 2.65% a month ago :( what's the current best repricing rates for a 1.2M loan?
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Since you have repriced and I believe that you have made the best decision based on the option available for you back then. You should not look back already.

All the repricing is handled by the internal department. But i recall someone share 2.55% fixed for 2 years for loan 1m and above.
 
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Zanahoria

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minamikaze said:
Oh man. I repriced at 2.65% a month ago :( what's the current best repricing rates for a 1.2M loan?
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You can't always time yourself to get the lowest rate. Different rates happened at different juncture. 7 months ago, 2.9% was the best they can offer for loan of 1mil. All you could do is to get/nego a package that allows you to do 1 year free repricing in the event interest rate drop further. Nothing to regret about. Anyway, that 0.1 to 0.3% difference does not create much impact.
 
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