Accured interest

[jonleelk]

Good morning all let's say now my accured interest around 18K cpf used total around 200K if I slowly clear the accured interest fully then after that one shot use it to clear hdb loan how much the accured interest will be then?

Unless u are topping up back to CPF 200k+18k so that $0 from CPF is associated with your HDB, only then AI will stop.

If u only topping up 18k, the 200k that you have already used for CPF (plus subsequent monthly CPF withdrawal) will continue to incur AI.

AI only deduct the cash u get when u sell your HDB. It will go back to your CPF which u can use for the next purchase. Eg many many years ago, I bought my BTO for $199k. Stayed there for 17 years, but HDB loan fully paid around the 10th yr. I sold the unit for $430k, but only got back $60k cash as the rest all went back to CPF, which I then use for down payment and monthly installment for my new condo.

So don't bother about AI.

 

[jonleelk]

Maybe you miss out some info, when you clear your HDB loan with cash, your accrued interest in CPF remains no change and is compounding until you do action to refund accrued interest to CPF.

There are 2 interest. One is paying to HDB, just like paying to the bank in a bank loan. Once HDB loan is fully paid, that interest stops.

The other interest is AI, which is based on the amount of CPF used and will continue until you sell the flat.

 

[fandango]

Please post screenshot of your accrued interest. I want to see.

 

[charsiewfan]

One should not get a bank loan just because the interest rates is lower than CPF. Because the interests incurred for bank loan is gone to the banks forever whereas if using CPF, the accrued interests goes back to you in the end.

But if you use cpf for housing, you will also lose the interest earned for OA?

 

[decade]

Please post screenshot of your accrued interest. I want to see.

go where check how much is my accrued interest huh?

 

[byesleep]

One should not get a bank loan just because the interest rates is lower than CPF. Because the interests incurred for bank loan is gone to the banks forever whereas if using CPF, the accrued interests goes back to you in the end.

I think u need to get your facts right.

You pay Hdb 2.6% in interest for your loan. That is gone forever.

Cpf accrues your interest for 2.5% on what ever money u take out to use to service the Hdb loan.

So it's the same as a bank loan. U are loosing 2.6% forever to interest payments to Hdb for the loan.

 

[fandango]

go where check how much is my accrued interest huh?

Cpf website. Your account.

 

[lls0101]

Accrued interest is just another number to remind us of the amount of interest we should earn from CPF if we did not used our OA to pay for the HDB mortgage.

It's just a number that will not affect us in any way, if there is no sales of HDB. So if we don't intend to sell the HDB flat, then why bother?

Even if we do sell, this accrued interest is just deduct from the sales price and goes back to our OA. The money still goes back to us. We will get lesser cash from the sales of HDB flat since the accrued interest goes back to OA. So if that is a major concern if you had plans to sell/flip the HDB flat, then maybe one should think about it.

TLDR : If not planning to sell HDB, don't bother about accrued interest. It's a waste of energy/time to worry about a number that do not affect us in any way.

 

[KnobKnob]

Accrued interest in the end will still flow back to cpf OA leh. Then use the OA to offset against your next housing purchase ma.

So I don't understand why do you all keep worrying about accrued interest

 

[pohw0008]

I think u need to get your facts right.

You pay Hdb 2.6% in interest for your loan. That is gone forever.

Cpf accrues your interest for 2.5% on what ever money u take out to use to service the Hdb loan.

So it's the same as a bank loan. U are loosing 2.6% forever to interest payments to Hdb for the loan.

Yeah it's like that one.. if you don't have the money need to take loan then ofcourse needs to pay for the loan interest..

If you got extra money but if you can earn interest more than the cpf 2.6% loan.. then it makes no sense to pay off the loan also..

 

[yuppieboy]

But if you use cpf for housing, you will also lose the interest earned for OA?

You can payback the lost interests through accrued interests either when you sell your flat or not selling your flat at all. Just repay the CPF loan + accrued interests back to your own account. However if you opt for bank loan, the interests paid to bank will not be yours.

 

[yuppieboy]

I think u need to get your facts right.

You pay Hdb 2.6% in interest for your loan. That is gone forever.

Cpf accrues your interest for 2.5% on what ever money u take out to use to service the Hdb loan.

So it's the same as a bank loan. U are loosing 2.6% forever to interest payments to Hdb for the loan.

I am referring to a situation where you can choose to paid for the flat fully using CPF charging you 2.5% or bank loan (<1%). Many will choose to use bank loan option due to the lower interests charged. The accrued interests go back to you eventually but not the bank interests.

 

[Tschuus]

Only a issue for people who think cpf is not their money .

 

[addict951]

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?

Every month you need to create a thread on your HDB loan and interest one.
EVERY. MONTH

 

[Lss]

Mine not even MOP acurred is 13k le

 

[lls0101]

Mine not even MOP acurred is 13k le

Paying for my mortgage since 2017. Accrued interest of 48k and it will continue to roll bigger. But why bother with this number? Just take it as gov is providing us a calculator that helps to count the interest you could have earn from them if you did not use your OA for home purchase.

I'm planning to retire in this house with no plan of sales. The accrued interest can continue to roll as much as it like. I can use it to compare it with the amount of free cash/investment I have outside, to guage if I had beaten the pitiful 2.5% returns from OA...

Even UOB One give better returns than our OA. Not sure why some people are so keen to lock up their liquidity at a worse rate, by paying their mortgage with cash, hoping to incur less accrued interest, or repay the accrued interest.

Each to their own, I guess

 

[Lss]

Paying for my mortgage since 2017. Accrued interest of 48k and it will continue to roll bigger. But why bother with this number? Just take it as gov is providing us a calculator that helps to count the interest you could have earn from them if you did not use your OA for home purchase.

I'm planning to retire in this house with no plan of sales. The accrued interest can continue to roll as much as it like. I can use it to compare it with the amount of free cash/investment I have outside, to guage if I had beaten the pitiful 2.5% returns from OA...

Even UOB One give better returns than our OA. Not sure why some people are so keen to lock up their liquidity at a worse rate, by paying their mortgage with cash, hoping to incur less accrued interest, or repay the accrued interest.

Each to their own, I guess

High interest is not guaranteed forever too mah.

When I started working Maybank basic savings account interest higher than endowments plans. So I rejected getting a policy. But in hindsight, it would have netted a higher amount because Maybank along with other banks dropped their interest afterwards.

 

[Yowe55 mini]

Dear all,

I have nothing but I am born with nothing initially.

Live simple and stay happy.

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

 

[yobyella]

How about if use as much cash as possible to pay down the hdb loan please? What are the pros and cons? Mine is 2005 resale unit

2005. That time price quite affordable. Mine 4r only 210k mature estate.

 

[Pearce]

not selling dont need care accrued interest

Later en-bloc, then cry?