Home loan advices

[aamaterasu]

Hi,

I am in my early 30s, have an existing home loan of about 750k and my 2 year fixed rate of around 1.5% is ending in June this year.

Can I check what are my options? I have around 100k in my OA. Is it recommended to say do a 50k prepayment and leave 50k for emergency use?

Thank you.

 

[reddevil0728]

What’s the formula after the 2 years?

 

[iduncheckmail]

Don’t prepay . Invest the monies.

anyway 100k is nothing la. Not worth even considering any alternative path.

 

[DevilPlate]

750k loan and only 100k OA.
Really no point reducing loan amount and you still have a big sum of loan to service anyway.
Invest Tbill using OA for now and reassess your options again.

Unless u have 1M OA+cash then maybe can think of fully paid down loan if it is a private property as you still able to take a home equity loan in future.

 

[sohguanh]

Hi,

I am in my early 30s, have an existing home loan of about 750k and my 2 year fixed rate of around 1.5% is ending in June this year.

Can I check what are my options? I have around 100k in my OA. Is it recommended to say do a 50k prepayment and leave 50k for emergency use?

Thank you.

This is a very personal decision i doubt a lot of readers can offer. Most would say invest to get more monies. This advice I hear 20+ years ago when I am in your shoes. However there is a niggling feeling inside of me this loan like can never pay finish. So in the end every 5 years I do partial prepayment to reduce the total loan amount else every year is like paying interest never pay down the principal loaned. This is me but you maybe different.

So today that niggling feeling is gone as I have pay finish my hdb loan. I feel so much happier and load off my shoulders. Reason is as one get older one find it harder to keep oneself employed consistently so the cpf contribution from employer may not be always every month come in. I am happy with my earlier decision. In Spore as you get older you find yourself harder to keep yourself employed all time. Other may say you don't reskill so out of market demand etc kind of advice. My advice to them is when you reach age 50 we reevaluate that advice you dish out when you are in your 20s,30s.

 

[~sabaisabai~]

This is a very personal decision i doubt a lot of readers can offer. Most would say invest to get more monies. This advice I hear 20+ years ago when I am in your shoes. However there is a niggling feeling inside of me this loan like can never pay finish. So in the end every 5 years I do partial prepayment to reduce the total loan amount else every year is like paying interest never pay down the principal loaned. This is me but you maybe different.

So today that niggling feeling is gone as I have pay finish my hdb loan. I feel so much happier and load off my shoulders. Reason is as one get older one find it harder to keep oneself employed consistently so the cpf contribution from employer may not be always every month come in. I am happy with my earlier decision. In Spore as you get older you find yourself harder to keep yourself employed all time. Other may say you don't reskill so out of market demand etc kind of advice. My advice to them is when you reach age 50 we reevaluate that advice you dish out when you are in your 20s,30s.

yes it is very personal decision

one said use the money to invest, provided the person know how to invest ah.. else u ask the person invest in what? any form of investment comes with the risk, is only matter of knowing how to manage the risk. using cpf to pay the house, not forgetting need to pay back the accrual interest using the proceed after selling the house

but of cos if one knows the investment strategy certainly it is good to use the money to invest to get higher return if one is able to stomach the risk. so there is no one size fits all answer

 

[andyhtc]

Loan interest rates are now comparable to FDs or T-Bills. Just pay down the loan.

 

[aamaterasu]

Thank you all for the replies. Does it matter whether this is an investment property? I probably will not invest the money in the OA as well.

 

[sohguanh]

Thank you all for the replies. Does it matter whether this is an investment property? I probably will not invest the money in the OA as well.

If buy to invest and not to stay in I think use monies invest better IMHO. I assume you have one to live in and this extra is purely for investment.

 

[reddevil0728]

Thank you all for the replies. Does it matter whether this is an investment property? I probably will not invest the money in the OA as well.

There’s tax relief on interest expenses

 

[BBCWatcher]

There’s tax relief on interest expenses

Very good point. You should adjust the interest rate to account for the tax savings. Then evaluate the adjusted interest rate relative to your next best alternative investment(s).

 

[dork32]

This is a very personal decision i doubt a lot of readers can offer. Most would say invest to get more monies. This advice I hear 20+ years ago when I am in your shoes. However there is a niggling feeling inside of me this loan like can never pay finish. So in the end every 5 years I do partial prepayment to reduce the total loan amount else every year is like paying interest never pay down the principal loaned. This is me but you maybe different.

So today that niggling feeling is gone as I have pay finish my hdb loan. I feel so much happier and load off my shoulders. Reason is as one get older one find it harder to keep oneself employed consistently so the cpf contribution from employer may not be always every month come in. I am happy with my earlier decision. In Spore as you get older you find yourself harder to keep yourself employed all time. Other may say you don't reskill so out of market demand etc kind of advice. My advice to them is when you reach age 50 we reevaluate that advice you dish out when you are in your 20s,30s.

a typical peace of mind guy