Hdb Accured Interest

[yuzu28]

need payback cpf interest. dunno why need payback when it is our money. or is it?

If its your money, you can take out and use freely.
If it's your money, you have 100% freedom to fo what you want with it, lock it or use it.

 

[Handyman8888]

Hihi all wish everyone a happy new year 2024. May I know why most property expert say to use as little cpf as possible or not even try to use at all to clear hdb loan please? If thats the case for those with a lot of hdb loan won't it take very long to clear off completely?

Who got money...lots of it...don't want to show 'Full Hand' for paying anything?
Be it car, bikes or property?

 

[-nyox-]

Think of it this way;

Why should I pay myself 2.5% interest when the government could have been the one paying this interest?

Then make a decision if you wanna pay down your mortgage with cash.

 

[wongminmin]

economy will go up and down.times will not be forever green.
there is no guarantee u will have a job forever till 60 or ur investment will forever good and earn $$..
i will rather pay off my debt asap and sleep well at nite.
well, each has their own thinking.. no need to argue.

eh, the problem here is He don't believe what others says..... continue to open threads and ask ask.
this is why i tell him just pay the loan off and sleep well. lol

there are 2 kinds of person.
1. They felt taking loan, is like owning someone $, or in debt... the the loan interest is leeching them off every second. (mostly old gen)
2. They love to take loans, then slowly pay back.... While using the excess cashflow on investment t-bills FD etc (mostly young gen)

last time i also like type 1 (brainwashed by old gen). After reading, i am type 2 now.

Just like those phv, they don't buy car, they go rent car.......

 

[BlackCube]

Accrued interest is 2.5% of what you took out from cpf oa to pay for your property.

When you sell, the accrued interest and principal will be returned to cpf.

Log in to cpf can see the actual amount.

There is option to repay the accrued interest iirc so you have more oa to earn 2.6%. but since fds are above this rate now, it's better not to repay the accrued interest at this moment

noob question.

how much u can put in fd and what you have in cpf is different?

say I have some cash, not alot. 20k. even if > 2.6% for fd, how much interest you can get to cover the interest for oa?

 

[virtualape]

noob question.

how much u can put in fd and what you have in cpf is different?

say I have some cash, not alot. 20k. even if > 2.6% for fd, how much interest you can get to cover the interest for oa?

The bottom line is if have cash place it somewhere that generates more than 2.6%. at least there is some interest to earn. If lazy to do it, just leave money in savings to earn miserly interest.

150k at 3.5% can earn around 5.2k. can use to repay part of accrued interest. Smaller amounts, use to pay utilities

 

[BlackCube]

The bottom line is if have cash place it somewhere that generates more than 2.6%. at least there is some interest to earn. If lazy to do it, just leave money in savings to earn miserly interest.

so if you dont have enough cash to generate enough money to cover the bank loan interest, then you are better off paying the bank loan interest?

 

[virtualape]

so if you dont have enough cash to generate enough money to cover the bank loan interest, then you are better off paying the bank loan interest?

If not enough money, what can you do? Just guai guai work, pay principal and interest lor.

 

[BlackCube]

If not enough money, what can you do? Just guai guai work, pay principal and interest lor.

cause most people here only use statements like, oh, fd now > 2.6% and whatnot. but that's assuming if you have cashflow, no?

oh wait, i forget, here all > 20k salary one

 

[jim889]

Hihi all wish everyone a happy new year 2024. May I know why most property expert say to use as little cpf as possible or not even try to use at all to clear hdb loan please? If thats the case for those with a lot of hdb loan won't it take very long to clear off completely?

coz chiu take out cpf need to return when hdeebee sold

whereas nose cpf then excess will be cash in chiur bank accound after sold

 

[virtualape]

cause most people here only use statements like, oh, fd now > 2.6% and whatnot. but that's assuming if you have cashflow, no?

oh wait, i forget, here all > 20k salary one

Money can earn one. Just whether we want to do it or not. Do part time food delivery on top of full time job if money not enough. Each month $1k extra..1 year 12k extra. Boc allows $500 min for fd few months back. Not sure if they change the limit now

 

[BlackCube]

Money can earn one. Just whether we want to do it or not. Do part time food delivery on top of full time job if money not enough. Each month $1k extra..1 year 12k extra. Boc allows $500 min for fd few months back. Not sure if they change the limit now

eh, your loan of few hundred k interest vs the interest from fd of few k, like that can compare meh?

got use meh? my math fail

 

[HMAN]

this is all about cash flow management and how much you can generate with your cash.

there are no fixed solutions.
key points: borrow from bank, money paid is final, borrow from CPF, it will continue to haunt you with the 2,5% accrued interest.

whatever it is, just try to improve oneself cash flow in a way is helping one to shield from uncertainty like sudden job lost , needs buffer for rainy day.

when Young
1. set priority of setting up CPF buffer zone. therefore try to build up at least a year of housing loan quantum.
-if one has extra cash, can setup partial cash payment.

2. if you have a stable job, consider bank loan than HDB house loan.
from past statistics, bank housing interest rates are having much longer period of time running below HDB 2.6%.
for the past 12 years, only like 2 years with mortgage rate higher than HDB .

once build up CPF buffer, should consider using some cash to service housing loan if you are completely not keen to invest.

3. before turning 55. accrued interest did matter.
cpf money used for housing loan continue to incur accrued interest even you have fully paid the housing loan.

imagine 400k running 2.5% interest rate for 10 years, that is quite substantial if your house is not growing more than 2.5% CARG. this is the time that people sell house with balance cash return but you will be sucking thumb with no cash earned.


you will miss the opportunity to jump on new property because the first house Worth can't be effectively be used as collateral to fund 2nd property.

 

[virtualape]

eh, your loan of few hundred k interest vs the interest from fd of few k, like that can compare meh?

got use meh? my math fail

The interest I earn use to replace some stuff at home due to wear and tear or spoil. It's your money, your choice.

Good that there are people who think like you, otherwise good fds will be oversubscribed depriving folks like me and others from making some money

 

[BlackCube]

The interest I earn use to replace some stuff at home due to wear and tear or spoil. It's your money, your choice.

Good that there are people who think like you, otherwise good fds will be oversubscribed depriving folks like me and others from making some money

i dont think like this or like that.

so what about paying some cpf and some cash for monthly installment? would that not let u clear debt faster, while earning some interest from oa? assuming the monthly cpf contri has enough to clear the installment

i guess this is why people say to pay installment fully using cpf, and take that cash to put into fd, to earn some interest since it's more than putting in oa.

 

[Roundtreex]

2.6% cannot even beat inflation actually.. It is losing money in value.
So might as well pump in property. The study show sinkie properties come with 7% return and above yearly. This return definitely beat inflation.
Too bad , CPF wont raise interest.
Continue listen to edmw and be poor lolol

 

[appleorange_]

no right or wrong answer la

keep an open mind n get urself educated on these cpf vs cash thingy

but ultimately u shld do whatever makes u sleep better at night

if u find security in having no loans then go ahead

if u feel ur $$ can work better elsewhere then invest the cash wisely

simple