Paying down HDB loan using CPF?

[dork32]

Why? Dork32 can pay off the whole mortgage tomorrow if he/she wishes, and all $500K is earning a higher interest rate than 1.9%. Presumably Dork32 continues to accumulate wealth beyond that $500K. It would be utter financial malpractice to accelerate repayment of this mortgage in these circumstances, assuming the facts are as represented.

actually, i cannot pay off my loan tomorrow. i am in the lock in period. there will be a penalty if i pay off tomorrow.

but it is not going to hurt me as i am on a fixed interest rate till lock in ends.

 

[dork32]

That is a dangerous game. You have to factor in the increasing interest rates. Plus i don't know how old you are. The older you are the higher risk you have of losing your job. Imagine what would happen if you took out a loan to buy a second property without paying off the first loan and interest rates went up to 4% and you lose your job. You will lose everything overnight

most of us took loans when buying our first home.

That is a dangerous game. You have to factor in the increasing interest rates. Plus i don't know how old you are. The older you are the higher risk you have of losing your job. Imagine what would happen if you took out a loan to buy your first property without paying off the first loan and interest rates went up to 4% and you lose your job. You will lose everything overnight.

 

[dork32]

That is a dangerous game. You have to factor in the increasing interest rates. Plus i don't know how old you are. The older you are the higher risk you have of losing your job. Imagine what would happen if you took out a loan to buy a second property without paying off the first loan and interest rates went up to 4% and you lose your job. You will lose everything overnight

actually this is not the issue.

the issue raised was that you will have more money for your next property if you pay off your home loan first.

this is completely wrong.

i will not have any cash at all if i pay off everything. i have to start saving from 0.

So if i kiasee, i just reserve my cash and cpf intact to cover for the loan. I still have to start saving from 0 for my next property. but my process will be faster, because my cash and cpf will be earning interest for me.

i seriously dont see the need of paying up the loan at all in the short run

 

[henrylbh]

the real issue to me is paying ABSD. It's quite a wishful dream that it would go up further. Besides higher purchase price would directly affect the rental yield. And if one is forced by circumstances to sell within 3 years, there is another round of SSD.