Redeeming HDB Home Loan

[henrylbh]

Ok..I don't want to said much all I can said if in doubt please go to CPF board and ask..Before asking have your Question in hand first all written black and white..also BE careful on this retirement sum issues and housing issues...why because they will PUSH to each other..

Pls read this QandA careful...the maximum benefit of the 1% interest

https://www.cpf.gov.sg/Members/FAQ/schemes/other-matters/others#faq17851

More important to say correct thing than say much.

 

[henrylbh]

Ok..I don't want to said much all I can said if in doubt please go to CPF board and ask..Before asking have your Question in hand first all written black and white..also BE careful on this retirement sum issues and housing issues...why because they will PUSH to each other..

Pls read this QandA careful...the maximum benefit of the 1% interest

https://www.cpf.gov.sg/Members/FAQ/schemes/other-matters/others#faq17851

More important to say correct thing than say much. But in the initial brief comment the fact was not put across clearly. Max interest is $600. If MA and sa combined less than 40k, then will not get Max interest.

 

[Garett70]

wahahahaha someone nv get his facts rights..and down here putting in caps..

Give u a scenario lah

e.g.

ur cpf has

OA $35k
MA $20k
SA $20k

lets assume whole year u have no contribution or withdrawal

your OA MA and SA for the first 60k will give u

OA 20k x 3.5%
Ma 20k x 5%
SA 20k x 5%

remaining OA will fetch u:

OA 15k x 2.5%

if u got more in SA and MA...the extra amount will earn 4% each

go and use a calculator, the figure u churned out will give u the interest that u will earn every year.

This is again sinple interest. By right u will earn more if u know how to use a financial calculator to calculate

Hence it is YOU that has the misconception. Therefore, I will request you to read it more carefully. If in doubt go to CPF to find out more.

...lets take my CPF as example:

Currently my OA is $48K SA $21k MA $15k

Base on the first $60k I can get 1% interest..Right..

The calculation of my interests is
$48k x 2.5%
$21k x 4%
$15k x 4 %

The 1% EXTRA interests is calculated as follow
OA $20k x 1%
SA $21K x 1%
MA $15k x 1%


PLEASE READ CAREFULLY IN THE 1 % interest rate before you comment... Which calculator you used to calculate the interests PLS SCREENSHOT IT and post it here

 

[Garett70]

More important to say correct thing than say much. But in the initial brief comment the fact was not put across clearly. Max interest is $600.

Haha now you knew..hence I said is best to buy off your housing LOAN...because it will KILL you in later stages of your life..

 

[henrylbh]

...lets take my CPF as example:

Currently my OA is $48K SA $21k MA $15k

Base on the first $60k I can get 1% interest..Right..

The calculation of my interests is
$48k x 2.5%
$21k x 4%
$15k x 4 %

The 1% EXTRA interests is calculated as follow
OA $20k x 1%
SA $21K x 1%
MA $15k x 1%


PLEASE READ CAREFULLY IN THE 1 % interest rate before you comment... Which calculator you used to calculate the interests PLS SCREENSHOT IT and post it here

Here you are clearer but not so in your post #15.

 

[henrylbh]

Haha now you knew..hence I said is best to buy off your housing LOAN...because it will KILL you in later stages of your life..

Here again you are not clear. I have enough CPF to settle my loan of $350k fully, but I chose not to. In fact, I wanted to settle interest only and leave principal amount till a later date, but not allowed to.

 

[pcmdan]

what the crap is that guy talking about and are u even financially trained?

The MAX is $600 for the extra 1%

but the rest u still earn a min of 2.5%

if ur loan is currently drawing 2% even without the extra 1% u are still better off

i.e. to say if u have 20k in each account the max u get is $600 for the xtra 1%

but for each 20k in each account

OA u take $500
SA u take $800
MA u take $800

Total interest collected is $2,700

If ur loan is 60k with an interest of 2% max interest payable is $1,200

interests are calculated based on monthly average and not yearly

when I say compute correctly, it means u compute based on compounding and not simple interest.

Take an e.g.
a person who doesnt know compounding..will just take 20k x 2.5% = $500

but what u actually earn is $505.77 in 1 year.

before u become unhapi with my reply..ask yourself is ur reply clear?

AND why would anyone repay his home loan if the bank is charging him less than 2.5% zzzzz

Unless TS is using HDB loan then thats a diff story.

U suggest paying back ur home loan, likely because u r using HDB loan. But TS specifically said BANK LOAN. From my understanding, Bank loan is currently below 2.5%...

 

[Garett70]

Here again you are not clear. I have enough CPF to settle my loan of $350k fully, but I chose not to. In fact, I wanted to settle interest only and leave principal amount till a later date, but not allowed to.

Since you so rich why don't you settle it ONCES and for all..I know many people will said we rent HDB for 99 years..it really hated it to see all OUR hard earn money is like being suck to it..BUT If this HDB is your for 99 years and you no more have to paid the housing loan don't you feel HAPPIER..

 

[pcmdan]

...lets take my CPF as example:

Currently my OA is $48K SA $21k MA $15k

Base on the first $60k I can get 1% interest..Right..

The calculation of my interests is
$48k x 2.5%
$21k x 4%
$15k x 4 %

The 1% EXTRA interests is calculated as follow
OA $20k x 1%
SA $21K x 1%
MA $15k x 1%


PLEASE READ CAREFULLY IN THE 1 % interest rate before you comment... Which calculator you used to calculate the interests PLS SCREENSHOT IT and post it here

i dont even need a financial calculator i can even get the no.

the extra 1% will earn $600 max thats is a fact.

but ur 48k 21k and 15k will all continue to earn the base rate of 2.5, 4 and 4 annually

but to my understanding ur reply is..

if i got 48k 21k and 15k the max interest i can earn in a year is $600. which is NOT TRUE

Based on my calculation

the interest u will earn with the e.g. u given (without any in or out) are:

from the xtra 1% $562.27
from the base rate $2,680.54
Total interest earned: $3,243.12

If anyone dont trust my workings, which i just calculate it briefly, feel free to contest.

Thanks

 

[Garett70]

i dont even need a financial calculator i can even get the no.

the extra 1% will earn $600 max thats is a fact.

but ur 48k 21k and 15k will all continue to earn the base rate of 2.5, 4 and 4 annually

but to my understanding ur reply is..

if i got 48k 21k and 15k the max interest i can earn in a year is $600. which is NOT TRUE

Ok since you are financially trained I should not said much because I am not Financially trained I am just an ordinary guy working day in day out..BUT for CPF calculations...SORRY YOU REALLY THROW YOUR FACE AS Financially trained personal...PLEASE go and read out all CPF terms And conditions..

 

[pcmdan]

Ok since you are financially trained I should not said much because I am not Financially trained I am just an ordinary guy working day in day out..BUT for CPF calculations...SORRY YOU REALLY THROW YOUR FACE AS Financially trained personal...PLEASE go and read out all CPF terms And conditions..

Thanks.

Since u are so confident..i shall apologize first if the max interest is really $600. I must confess that I did NOT read every single word in the CPF website.

I shall go find out more.

any pro can let me know if my understanding is wrong?

Garett70, possible to give me the link from CPF website to validate your point?

Thanks

 

[hwmook]

Ok..I don't want to said much all I can said if in doubt please go to CPF board and ask..Before asking have your Question in hand first all written black and white..also BE careful on this retirement sum issues and housing issues...why because they will PUSH to each other..

Pls read this QandA careful...the maximum benefit of the 1% interest

https://www.cpf.gov.sg/Members/FAQ/schemes/other-matters/others#faq17851

I understand the T&C perfectly, the problem lie in your explanation. It's so horrible that nobody understand what you are trying to say, no need to scold others.

 

[hwmook]

Thanks.

Since u are so confident..i shall apologize first if the max interest is really $600. I must confess that I did NOT read every single word in the CPF website.

I shall go find out more.

any pro can let me know if my understanding is wrong?

Garett70, possible to give me the link from CPF website to validate your point?

Thanks

Your understanding is not wrong, max interest of $600 for the 1% more which is common sense. But if your SA+MS already have more than $60000 then you don't get the 1% interest for OA so I advise people to stop using 3.5% and 5% as interest rate for CPF as it's misleading.

 

[pcmdan]

Based on my initial findings

It seems that CPF doesnt compute the interest on a compounding method. More on a simple interest method.

However, my concept still remains. The max interest is only $600 for the xtra 1%. But there is no cap for the 2.5 4 and 4

kindly see the link provided

https://www.cpf.gov.sg/Members/FAQ/schemes/other-matters/others

 

[pcmdan]

Your understanding is not wrong, max interest of $600 for the 1% more which is common sense. But if your SA+MS already have more than $60000 then you don't get the 1% interest for OA so I advise people to stop using 3.5% and 5% as interest rate for CPF as it's misleading.

Thank you for the confidence.

yes nevertheless the max for the 3 accounts on the extra 1% is $600..regardless the permutation.

if MA + SA = $60k and OA is 0, the max interest u can earn from the extra 1% still $600.

Agree totally. Should always use the base interest as calculation rather than the extra 1%

 

[pcmdan]

PLEASE READ THE TERMS AND CONDITION IN CPF CAREFULLY...many people have this MISCONCEPTION...ITs your FIRST 20k will earn another 1% not your TOTAL CPF hence you only earn another $200 dollars ONLY...

read his reply again. it seems he is saying only OA can earn $200. the rest cant earn from the extra 1%. In addition, where is the 2.5% that he miss out?

want to correct abit..it is first 20k of OA that earn the xtra 1% interest. However, if you have u to 60k in MA and SA and 0 OA, u will be entitled to $600.

If OA is 35 SA 10 MA 10 (total 55k)
u can earn an additional $400 from the xtra 1% + 2.5% and 4% for the full amount

if OA is 15 SA 20 MA 20 (total 55k)
u can earn an additional $550 from the xtra 1% + 2.5% and 4% for the full amount

if OA is 45 SA 32 MA 22 (total 99k)
u can earn an additional $600 from the xtra 1% + 2.5% and 4% for the full amount

 

[henrylbh]

Your understanding is not wrong, max interest of $600 for the 1% more which is common sense. But if your SA+MS already have more than $60000 then you don't get the 1% interest for OA so I advise people to stop using 3.5% and 5% as interest rate for CPF as it's misleading.

No so correct. Even if SA and MA above 60k, you still get 1% on first 20k of OA .... but the 1% interest on OA goes into SA or RA. If OA less than 20k, SA/MA will earn the additional interest of 1% on 60k less amount of OA.

 

[henrylbh]

i dont even need a financial calculator i can even get the no.

the extra 1% will earn $600 max thats is a fact.

but ur 48k 21k and 15k will all continue to earn the base rate of 2.5, 4 and 4 annually

but to my understanding ur reply is..

if i got 48k 21k and 15k the max interest i can earn in a year is $600. which is NOT TRUE

Based on my calculation

the interest u will earn with the e.g. u given (without any in or out) are:

from the xtra 1% $562.27
from the base rate $2,680.54
Total interest earned: $3,243.12

If anyone dont trust my workings, which i just calculate it briefly, feel free to contest.

Thanks

His post #23 indicates that he understands how the additional 1% works ... but he can't explain clearer in words and hence misleading and made worst with the CAPS he uses.

 

[wts2013]

Your understanding is not wrong, max interest of $600 for the 1% more which is common sense. But if your SA+MS already have more than $60000 then you don't get the 1% interest for OA so I advise people to stop using 3.5% and 5% as interest rate for CPF as it's misleading.

No so correct. Even if SA and MA above 60k, you still get 1% on first 20k of OA .... but the 1% interest on OA goes into SA or RA. If OA less than 20k, SA/MA will earn the additional interest of 1% on 60k less amount of OA.

Yes agree with hwmook, interest shld be viewed based on your own case, ie if u have more than 60k in SA/MA/RA, interest is effectively earned on the SA/MA/RA since it is ultimately credited to SA/RA

hahaha u can actually ignore CPF website's example that 1% was actually earned on 20k in OA if u have it when SA/MA/RA exceeds 60K, it is meaningless since interest gets posted into SA/RA and not OA, ie no need to differentiate in your calculation of 1% on 60k lah in such situation, hahaha

 

[pcmdan]

His post #23 indicates that he understands how the additional 1% works ... but he can't explain clearer in words and hence misleading and made worst with the CAPS he uses.

Thank you so much for pointing it out to me.

Hence, I am now more puzzled which part am I wrong in my e.g. that he quoted.