Accured interest

[lls0101]

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.

yep. High interest might not be sustainable for long periods but let's make hay while the sun shines.

Higher interest yet with flexibility of liquidity, sure beats CPF OA returns with a lock up of several years/decade.

Anyway, just wanted to point out that accrued interest is nothing of concern and should not be a source of worry. There are many more better ways to utilise and grow our cash.

Again, each to their own.

 

[Lss]

yep. High interest might not be sustainable for long periods but let's make hay while the sun shines.

Higher interest yet with flexibility of liquidity, sure beats CPF OA returns with a lock up of several years/decade.

Anyway, just wanted to point out that accrued interest is nothing of concern and should not be a source of worry. There are many more better ways to utilise and grow our cash.

Again, each to their own.

Still it's something everyone should be aware of as they can think of rightsizing and end up with no cash on hand after a sale.

Doesn't help that for bank housing loan you need 5% cash.

As incomes increase and the criteria for HDB loan stays static, it will be a more prominent issue.

 

[hwarzoner]

Singapore property are affordable don't really need any loan just cash buy.

 

[HMAN]

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.

 

[mp4005 help]

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.

fully discharge even with CPF ?
you pay back everything to your OA ?



Read HWZ Forum Rules!

 

[HMAN]

fully discharge even with CPF ?
you pay back everything to your OA ?



Read HWZ Forum Rules!

Fully discharged the housing loan. Last partial repayment from CPF,amount=300k
Are you saying topping up CPF OA for the housing amount used ? No, I top up nothing.

Not keen on the 2.5% return. I have better use of my cash.

 

[standarture]

If u rich no issue. But true rich people and business men also not so kumgong to pay in full.

 

[andyhtc]

I just repaid some of my CPF housing loan and planning to use the OA for an April T-Bill.

The most recent housing loan fixed interest rates have dropped to around 2.9%.

They might reach 2.5% by 2025 and I will clear the entire loan using my OA after my lock-in expires.

 

[Yowe55 mini]

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.

 

[MindMatrix]

Hi bros,

To summarise -

1) Accrued interest is charged on the CPF Ordinary Account savings we use for housing.
2) There is no further interest charged on accrued interest.
3) The amount of accrued interest can increase only because interest is being computed on the OA savings that's used for housing.

 

[muji4832]

I know people who use cash to pay HDB installments every month despite their CPF is enough to cover.

These people aren't really high earners too. Really dunno what they are thinking.

 

[toolbox03]

Still it's something everyone should be aware of as they can think of rightsizing and end up with no cash on hand after a sale.

Doesn't help that for bank housing loan you need 5% cash.

As incomes increase and the criteria for HDB loan stays static, it will be a more prominent issue.

Criteria for hdb loan is static is to keep the hdb price from shooting through the roof, the tool the gahmen used is MSR

What the gahmen didn’t thought of is there are cash rich people who don’t mind overpaying for hdb which lead to so many million dollar hdb

Or maybe they did though about it but just let it be

 

[Lss]

Criteria for hdb loan is static is to keep the hdb price from shooting through the roof, the tool the gahmen used is MSR

What the gahmen didn’t thought of is there are cash rich people who don’t mind overpaying for hdb which lead to so many million dollar hdb

Or maybe they did though about it but just let it be

I would disagree, the fact that HDB loan has no cash component and lower downpayment percentage help raise price.

Why do you think they reduced the max loan amount and loan duration for car ownership. Because it's effective to price ppl out. But like you said they maybe expect many cash rich ppl. So prices remain high.

 

[celong27]

Good evening all don't know my hdb loan balance and accured interest make me want to clear it ASAP as I see it getting lesser and lesser give me motivation

 

[celong27]

So accured interest is an asset in other words?

 

[celong27]

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?

 

[Hyruga]

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?

Have.

Back in 2013 to 2017, HDB price keep stagnating. Got some people have negative sales.

 

[celong27]

Hope to maximise that's why faster pay off hdb asap so it will become a true asset and to have zero accured interest

 

[Hyruga]

Hope to maximise that's why faster pay off hdb asap so it will become a true asset and to have zero accured interest

No lei...

If you pay using CPF, you are increasing the accrued interests the more you pay.

Want to pay off must pay off using cash.

 

[celong27]

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?