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Cpf or bank loan for hdb house?

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  • 1 Post By BBCWatcher
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Old 06-08-2018, 09:15 PM   #1
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Cpf or bank loan for hdb house?

On 1 hand , use cpf, Need to pay back accrue interest if the fund were not taken out.

On another ,use bank loan, the cpf really has no other major item to utilise beside housing.
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Old 06-08-2018, 09:29 PM   #2
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Depends on whether you see CPF as your money.
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Old 06-08-2018, 10:18 PM   #3
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Depends on whether you see CPF as your money.
Don't see it as my money. 65 still have to beg for your own money back.
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Old 06-08-2018, 10:30 PM   #4
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65 still have to beg for your own money back.
You could do that, and that might even be entertaining. But then the CPF officer would probably look at you in bewilderment and wonder why you're begging when you could have withdrawn funds 10 years earlier at age 55 if you wished, without begging.

....I think we're way off on a tangent, though. Is your question whether to take a HDB loan or a bank loan? To help decide that question, what's the best bank loan offer you've received?

Most probably the bank is offering a lower interest rate than HDB is. However, bank interest rates aren't as stable as HDB concessionary loan rates. (HDB loan rates can adjust, but they're less likely to increase any time soon since there's still about 2 percentage points of buffer. That is, market interest rates would have to go up about 2 more percentage points before the HDB loan rate starts to increase.) So if you value greater stability in your loan rate, then go with HDB. If you feel comfortable taking a risk that bank interest rates won't go up "too much" while you have the mortgage -- or might even go down -- then go with the bank loan.

It's a bit of a tough call right now. Bank mortgage rates have been creeping up lately.
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Last edited by BBCWatcher; 06-08-2018 at 10:37 PM..
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Old 06-08-2018, 10:56 PM   #5
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TS is not clear in his query. It seems to me, he is concerned that if he uses CPF he need to return the CPF plus accrued interest. On the other hand, if he uses bank loan and pay by cash, he saves paying accrued interest on CPF used. But I can't answer unless he clarify.
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Old 06-08-2018, 11:00 PM   #6
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TS is not clear in his query.
That's true. It's confusing. Is this a HDB loan v. bank loan question, or is this a question about whether to use CPF OA funds for housing?
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Old 06-08-2018, 11:20 PM   #7
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Can't help scratching my head.
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Old 07-08-2018, 05:19 AM   #8
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On 1 hand , use cpf, Need to pay back accrue interest if the fund were not taken out.

On another ,use bank loan, the cpf really has no other major item to utilise beside housing.
Erm. You can take a bank loan and still use your CPF funds to service the loan. You will still have to pay back accrued interested, but ONLY IF YOU SELL YOUR HOUSE. Unless you sell your house below valuation, you do not have to top up to pay the accrued interest if the sales of your house doesn't cover it.

Really, accrued interest is not something you should worry about. It's there mainly to prevent a few loopholes. It's just something those #returnmycpf crazies harp about to instill fear, uncertainty and doubt in the system.
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Last edited by tangent314; 07-08-2018 at 05:24 AM..
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