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Long term view on hdb loan vs bank loan.

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Old 08-12-2018, 07:08 PM   #1
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Long term view on hdb loan vs bank loan.

While hdb fixed at 2.6% pa.
bank loan can be floating or fixed.

Let's discuss the long term overall benefits and disadvantage, and how 1 should be wary when taking home loan.

Eg
Banks dont do lock in refinancing when loan is below 100k.
3rd party loan comparer wont help u compare loan if loan is below 300k.
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Old 08-12-2018, 07:42 PM   #2
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While hdb fixed at 2.6% pa.
It's not fixed. Market interest rates would have to rise fairly significantly to push the HDB loan rate above 2.6%, but it could certainly happen.

bank loan can be floating or fixed.
In Singapore, all bank mortgages are floating when they exceed 3 year terms. So they're floating.
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Old 08-12-2018, 08:25 PM   #3
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When market interest rate rises, cpf oa interests will rise as well then HDB rate will rise correspondingly as well. I regret taking HDB rate, but if you unsure you can pay in a timely manner then take hdb's.
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Old 08-12-2018, 10:06 PM   #4
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When market interest rate rises, cpf oa interests will rise as well then HDB rate will rise correspondingly as well.
At last report (for this calendar quarter’s OA interest rate calculation), market interest rates would have to rise 2.2 percentage points before the OA interest rate would start to rise. There’s a big buffer at the moment.
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Old 09-12-2018, 11:04 AM   #5
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Assume that you are able to pay your bank housing loan using cash, will you do it or leave your cash in bank accounts that fetch higher interest rate than bank loan interest rates?
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Old 09-12-2018, 06:17 PM   #6
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1 thing to take note is when u take housing loan from bank , they charge u admin fee if u refinance in same bank.

U need to pay for legal fee( subsidize or unsubsidized) if u refinance with another bank.

These fee can add up to your overall interest expenses.
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Old 10-12-2018, 12:43 PM   #7
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When market interest rate rises, cpf oa interests will rise as well then HDB rate will rise correspondingly as well. I regret taking HDB rate, but if you unsure you can pay in a timely manner then take hdb's.
Don't think 2.6% HDB rate will rise cause will affect many Singaporean.
Rise rate, people won't has enough CPF for housing, many need to top up cash. These will affect people spending power from rise of living cost too.
Unless current government do not want to get re-elected.

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Old 10-12-2018, 01:12 PM   #8
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2.6 = 2.5 + 0.1. U know? If OA rate higher than 2.5 then how?
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Old 10-12-2018, 01:40 PM   #9
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I will avoid a long term debt and try to pay up the mortgage in less than three years. Unless there are higher returns for the cash, try to pay up the loans as soon as possible. Short term wise, bank and hdb rates are quite close, so there may not be much impact if one is able to pay off in a few years. I have read Mr Money Moustache’s blog on debt and he calls debt an emergency. He suggests not spending on other things except basic food and transport when one is in an emergency.
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Old 10-12-2018, 04:06 PM   #10
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I will avoid a long term debt and try to pay up the mortgage in less than three years. Unless there are higher returns for the cash, try to pay up the loans as soon as possible. Short term wise, bank and hdb rates are quite close, so there may not be much impact if one is able to pay off in a few years. I have read Mr Money Moustache’s blog on debt and he calls debt an emergency. He suggests not spending on other things except basic food and transport when one is in an emergency.
Either you failed to read or you are misleading people. Only crazy idiot will suggest hundred million people stop living to clear housing loan.
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Old 10-12-2018, 05:01 PM   #11
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Either you failed to read or you are misleading people. Only crazy idiot will suggest hundred million people stop living to clear housing loan.
The link is below. Everyone is welcome to read it and interpret accordingly. I find that the idea makes sense, but I guess not everyone can accept the required discipline to be financially independent.
http://www.mrmoneymustache.com/2012/...-an-emergency/
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Old 10-12-2018, 10:33 PM   #12
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The link is below. Everyone is welcome to read it and interpret accordingly. I find that the idea makes sense, but I guess not everyone can accept the required discipline to be financially independent.
http://www.mrmoneymustache.com/2012/...-an-emergency/
You sure understand what in your link or not. Help you to quote it. It excluded the primary housing loan.


"If you borrow even one dollar for anything other than your primary house or a profitable investment, the very next dollar you can get your hands on should go to paying that back"
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Old 11-12-2018, 11:59 AM   #13
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While hdb fixed at 2.6% pa.
bank loan can be floating or fixed.

Let's discuss the long term overall benefits and disadvantage, and how 1 should be wary when taking home loan.
The single most pervasive argument for bank vs hdb loan is the interest rate differential and it's uncertainty, especially now.

On the whole, hdb loan is much better than bank loan unless the interest rate differential is enough to cushion any hike in interest rates as days of low interest rates are very unlikely to return.

Other factors in favour of hdb loan -
higher percentage of loan
lower valuation fee
much lower conveyancing fee
ease of partial prepayments of loan
as good as free 5 years fire insurance
value insurance in HPS
no need to look for lawyer when redeeming loan
lower legal fee when redeeming loan
free custody of title deed upon redemption of loan
cheaper legal fee on title change upon death of co-owner
less demand on default payment of loan
still got chance to switch to bank loan
no need to be concerned with change of interest rate
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