Accured interest

[ChinTuaKi]

Housing loan fully discharged.

I was using cash+ CPF to pay my mortgage loan. With commercial loan running between 1 to 1.48% and I have enough funding in my CPF OA account to pay up but choosing to pay monthly since OA interest 2.5% and investment return was higher than the 1.5% mortgage loan. Making no sense to pay up as soon. This progressive way of loan servicing will also lower the accrued interest.




Further more, My CPF contribution was hitting ceiling of 37k++ every year, as such, $3k was set aside for mortgage loan and I will have little draw down on my OA account since my CPF contribution+ interest is higher than 36k of annual loan payment.



I fully discharged my loan ever since loan interest creeped up to 3.9% and I am reaching 55 of age. Accrued interest no longer concern me that I can fully retrieve my OA balance.SA FRS amount settled.

Use up 590k CPF OA for housing loan, 40K as accrued interest.
This accrued interest is considered low with reference to the amount used for the housing loan.

Can explain this statement " Accrued interest no longer concern me that I can fully retrieve my OA balance.SA FRS amount settled." ?

Thanks.

 

[TrollAndOgres]

Why use cash to reduce.. Either bonus or just pay per normal.. In case need to change flat, still got money in OA to pay downpayment ma.

 

[Darth_Yang]

Dear all,

I recently divested my $600K from my OA into Tbills for a 1-year period at 3.45% interest. However, I've discovered there's a quarterly fee of $2.18SGD, leaving me feeling deceived.

Confidence for the future. More good years ahead...
Thank you.

From your statement.. do u see CPF in your OA as a form of investment?

 

[HMAN]

Can explain this statement " Accrued interest no longer concern me that I can fully retrieve my OA balance.SA FRS amount settled." ?

Thanks.

Reaching 55 soon,
Since I have more than FRS amount of fund in SA , after RA formed. OA money will be fully withdrawable, whatever accrued interest return to OA can be retrieved

 

[virtualape]

May I know anyone regret put as much money as possible to reduce the accured interest and fully paid their hdb in the end left with not much hard cash at all please?

Return so you can earn 2.5% cpf. or you can put that amount that earns higher interest eg fd to offset the 2.5% accrued?

No brainer right?

 

[Hyruga]

Got some misconceptions on accrued interests.

First, accrued interests is your CPF money and it will be put into your CPF account when you sold your flat.

Suppose you are 40 year old and you don't intend to sell your flat. Let's say you have already paid 300k OA into your housing at age 40 to fully paid. At age 56, you suddenly decided to sell your flat.

The accrued interest will be 2.5% annually at 300k as a simple calculation (non compounding). That's $7500 interest per year.

At age 40 to 56, the interests will be 300k + 7500 X 16 = 420k return back to CPF. Huat ah!

If you already reach FRS, you can withdraw the rest of the sum. Huat ah!

 

[congster2]

May I know anyone regret put as much money as possible to reduce the accured interest and fully paid their hdb in the end left with not much hard cash at all please?

No idea cos I duno how to accure interest...

 

[Yowe55 mini]

From your statement.. do u see CPF in your OA as a form of investment?

Dear Darth_Yang,

Do you have an example?

Confidence for the future. More good years ahead...
Thank you.

 

[fandango]

May I know anyone has any experience or know someone who has fully paid hdb and zero accured interest but in the end nothing else?

Yes, some edmwers home owners here one shot paid all in cash.

 

[aarontansp]

May I know anyone regret put as much money as possible to reduce the accured interest and fully paid their hdb in the end left with not much hard cash at all please?

Your accrued interest will be used for RA when reaching 55. Still can take out if aim is to hit brs/frs leaving the excess to withdraw

 

[fandango]

Where are all the accrued interest screenshots??

 

[Darth_Yang]

Dear Darth_Yang,

Do you have an example?

Confidence for the future. More good years ahead...
Thank you.

You say 'divested' your OA ... Meaning you see OA as investment lo ?

 

[Milodrink]

Mine not even MOP acurred is 13k le

13k so little ah.

U bto 2 room is it

 

[d3fc0n]

AI no sell no count. 100k also like that. still got abt 7yrs of payments to go

 

[fandango]

AI no sell no count. 100k also like that. still got abt 7yrs of payments to go

You already paid $250k, still have 7 years to go??

 

[d3fc0n]

You already paid $250k, still have 7 years to go??

my bto 508k bo bian

 

[Flexamoria]

Ai will go back to your cpf, why worry
Just tat u get less cash after selling your flat

 

[Mecisteus]

If you can make good returns through investment or trading, it doesn't make sense to pay off AI.

If you are type who has been losing money in stocks, then better pay off the AI.

 

[eatingtunic]

May I know anyone have any real life experience due to too much accured interest then have negative sale? If have a chance again will clear the accured interest please?

Me....
$54k accured interest waived off by cpf.
Negative sales, no real cash loss.

Cpf OA returns fully paid new bto. Will continue to have accured interest.
Nothing to worry.

Next 20yrs :
- Working, full cpf credited, nothing to pay for house.
- Sell house, projected profit surplass all accured interest.

 

[fandango]

Me....
$54k accured interest waived off by cpf.
Negative sales, no real cash loss.

Cpf OA returns fully paid new bto. Will continue to have accured interest.
Nothing to worry.

Next 20yrs :
- Working, full cpf credited, nothing to pay for house.
- Sell house, projected profit surplass all accured interest.

How come negative sales? Tell us the background.