HDB Question

[hachi]

Most people think housing loan below 2.6% are good debts. But it really depends on how confident you are to use the cash to generate more returns .

i fully paid my house . Lazy to use the cash to generate more.

When I left 19k if hdb loan, I checked. My monthly of 530, 120 is interests... Then I just use cash and redeem it.

 

[hachi]

Just take $500,000 profit after mop and change to condo. Do it fast while you are young and employed so that you can get loan.

I took the profit get a almost free bto....

 

[jericho75]

too simple to meet if u have bills and giro-ed salary... can get 4% on 150k.

ocbc quite similar.

then uob stash throw in 100k dont touch. another 3%

very difficult criteria? i think those that say cannot meet are just plain lazy to plan their expenses

im not even mentioning investments. got 90k u put in low risk etf also can get more than 2.6%. so i can't understand why need to pay upfront early with cash. to me, its a foolish decision

so even if i can, i wont unless hdb increases loan interest insanely

of course is not using cash throw inside. ts is asking if he should use his excessive funds inside cpf dump in one shot.

 

[hachi]

If you use your OA to pay off the loan early, there's Accrued Interest that you need to pay on that amount. That means instead of earning from the 2.5% OA interest to pay off the HDB loan 2.6% interest, CPF is going to charge you 2.5% Accrued Interest on the money that you used to pay the HDB Loan and add it to your "debt" that you need to pay back to CPF. That means when you decide to sell, you could get back much lesser because you need to pay back the Accrued Interest over the years.

If it was me, i wouldnt pay off early. Rather leave it in CPF and keep it liquid and let HDB slowly deduct. The difference is not much, but there is a difference.

At least you don't need to pay the 2.6% hdb loan? Right?

 

[Whimsica]

Check the interest rate you getting on your CPF.

If higher than loan interest rate then continue with loan arrangement.

 

[Darth_Yang]

Should I fully pay up my BTO now or slowly pay it finish.

I left around 90K, but both wife and me have around 40K each in our CPF account.

Will keeping it in CPF earn more interest for me or clear finish my loans then slowly build up my CPF be better...

Depends on many factors ...

Will u invest your OA ?

intend stay how long more or no going to move?

Your age , wife age..

Etc..

 

[coyote]

I took the profit get a almost free bto....

Like that how not to like the government man. Still we have edmwers asking government to lower HDB resale prices. That's ridiculous.

 

[hachi]

Mahahha like I said no point whining... Game the system... Many are doing it.

Like that how not to like the government man. Still we have edmwers asking government to lower HDB resale prices. That's ridiculous.

 

[coyote]

I took the profit get a almost free bto....

stabilise is stabilise at high price?

https://forums.hardwarezone.com.sg/...t-for-stabilise-right.7105926/#post-155364290

 

[rethaFrey]

i was thinking about this also and there was 2 main thoughts

1. u pay off finish, you no debt. but ur CPF OA has low amount to earn the 2.X%
2. you keep your OA to earn the 2.X% and know for sure that you can pay off finish.

 

[ribena.bing]

of course is not using cash throw inside. ts is asking if he should use his excessive funds inside cpf dump in one shot.

i see i see. sorry i blu

based on my experience, i always see hdb loan pegged 0.1% above cpf interest rate...

so just pay slowly using cpf lor.

 

[dushensiao]

use spare cash all in dbs, use div to pay off hdb mortgage

 

[jericho75]

i see i see. sorry i blu

based on my experience, i always see hdb loan pegged 0.1% above cpf interest rate...

so just pay slowly using cpf lor.

actually no difference if using cpf.

 

[hachi]

i see i see. sorry i blu

based on my experience, i always see hdb loan pegged 0.1% above cpf interest rate...

so just pay slowly using cpf lor.

Yes 2.6% and the 2.5% AI you are paying yourself if you sell it.

 

[Mountainnodew]

Pay off the loan and get the house title deed. Using CPF to invest won’t earn much.

 

[hachi]

Juat at pay it off then build FRS at full force.
Investment using cash is faster and better.

 

[kaputzzz]

At least you don't need to pay the 2.6% hdb loan? Right?

Yes. But you are net -2.5% interest on the money you used to pay your HDB loan (since the CPF money doesnt earn the 2.5% OA interest), and in addition, CPF charges you 2.5% accrued interest. So your "debt" that you have in your OA increases at a faster rate.

If you just let the OA slowly pay off the HDB loan, you are net -0.1% interest (since your 2.5% OA interest offsets the 2.6% HDB loan rate), and you accumulate Accrued Interest at a slower rate.

Well this is what i think happens. I may be wrong so feel free to correct me.

 

[hachi]

Yes. But you are net -2.5% interest on the money you used to pay your HDB loan (since the CPF money doesnt earn the 2.5% OA interest), and in addition, CPF charges you 2.5% accrued interest. So your "debt" that you have in your OA increases at a faster rate.

If you just let the OA slowly pay off the HDB loan, you are net -0.1% interest (since your 2.5% OA interest offsets the 2.6% HDB loan rate), and you accumulate Accrued Interest at a slower rate.

Well this is what i think happens. I may be wrong so feel free to correct me.

Depending on quantum... Eg... 100k OA and 100k loan. Then I would suggest clear off ASAP.
If 300k OA and 100k loan. Then slowly pay since the interests generated can offset your loan. And HPS does help too.

Depending on age and interests to purchase another house or replacing your current house.
Anyone got any more thoughts?

 

[NintendoSwitch]

Should I fully pay up my BTO now or slowly pay it finish.

I left around 90K, but both wife and me have around 40K each in our CPF account.

Will keeping it in CPF earn more interest for me or clear finish my loans then slowly build up my CPF be better...

Old generation who leemember economic crashes will say fully paid up. Those who dun will say max loan and invest for higher leeturns.

 

[AcquiT]

Dun understand, can explain?

For example day 1 u pay up 300k loan and interest day 1 kick in 2.6% per year compound of 300k to accrued to cpf via cash proceed if u sell off.
So 1 yr $307500x2.6x2.6 so on n so for
Vs monthly payment accrued is lesser alot
End up u sold off u take more cash.

But if i got $100k in cpf for each my n spouse, i accumulate cpf interest growth every yr $100k x2.6%x2.6% each

This way i will gain gradually over the year to cover loan interest and so call earning...

Base to home insurance,if still got loan and touch wood 1 party left,the house is free and also cpf all can be withdrawal as cash by spouse

This is what i meant earlier