Repay HDB LOAN?

[ceciltan]

Pay in full. Why incurred interest cost to pay other and also deny Govt the chance to pay u interest and end up you having to pay yourself interest for it?

 

[RMCWMR]

Hello, I am not sure if this is the right page for me to post. I will be able to get my BTO approximately 2years later which cost $330,000 after deducting 10% down payment. Suppose I would have approximately $150k by then on top of my emergency fund.. I am planning to save up for my 2nd property if possible. My queries would be:
* Should I reduce the loan by $150k or should I invest that amount?
* Should I loan for max period of 25years or shorter period to save on the additional interest charge.

$150k not enough to pay the downpayment + absd for a studio unit condo. Don't forget you need to pay absd since its yr second property.

If i were you pay off your hdb loan. After MOP sell your hdb for profit and buy 2 condo. 1 under your name, 1 under wife name. No absd.

 

[Merg91]

Cpf pays your OA 2.5%
And you pay HDB 2.6%

Why do you want to pay 0.1% when you can be smarter?

 

[Merg91]

Easily end up total $1-1.5 million loans for both condo.
Not sure they qualified individually for each of the big loans & pay back with confidence.

If i were you pay off your hdb loan. After MOP sell your hdb for profit and buy 2 condo. 1 under your name, 1 under wife name. No absd.

 

[tangent314]

If you can invest the money and get returns of more than the loan interest, then it is worth investing the money instead.

For example, if you can get a private bank loan for your HDB at ~2.1% and leave the money on CPF earning 2.5% (or better, transfer to CPF-SA for 4%), then you win out by continuing to service your loan.

Not all debts are bad debts that needs to be paid off. Cheap debt is good debt to be in.

 

[ahbuiszxc]

$150k not enough to pay the downpayment + absd for a studio unit condo. Don't forget you need to pay absd since its yr second property.

If i were you pay off your hdb loan. After MOP sell your hdb for profit and buy 2 condo. 1 under your name, 1 under wife name. No absd.

It's my first property which I will be able to collect it approx 2years later.

 

[ahbuiszxc]

If you can invest the money and get returns of more than the loan interest, then it is worth investing the money instead.

For example, if you can get a private bank loan for your HDB at ~2.1% and leave the money on CPF earning 2.5% (or better, transfer to CPF-SA for 4%), then you win out by continuing to service your loan.

Not all debts are bad debts that needs to be paid off. Cheap debt is good debt to be in.

I have just started investing, thus, I'm not confident to say that I'm able to get a return more than the loan interest.
I'm in between bank loan and hdb loan. Both have its pros and cons. Alot of me to consider..

 

[Merg91]

CPF home loan @2.6% is quite atas compared with commercial home loans .
Wonder why people are happy to use it.

CPF doesn't want lower it as it may then have to lower OA interest rate,which may affect the retirement of the people.

If you can invest the money and get returns of more than the loan interest, then it is worth investing the money instead.

For example, if you can get a private bank loan for your HDB at ~2.1% and leave the money on CPF earning 2.5% (or better, transfer to CPF-SA for 4%), then you win out by continuing to service your loan.

Not all debts are bad debts that needs to be paid off. Cheap debt is good debt to be in.

 

[BBCWatcher]

I have just started investing, thus, I'm not confident to say that I'm able to get a return more than the loan interest.

If your and your spouse's Special Accounts have not reached the Full Retirement Sum, you and your spouse absolutely can do better than 2.6%. CPF Special Accounts pay at least 4.0% interest.

 

[Mecisteus]

CPF home loan @2.6% is quite atas compared with commercial home loans .
Wonder why people are happy to use it.

CPF doesn't want lower it as it may then have to lower OA interest rate,which may affect the retirement of the people.

HDB loan has the flexibility of early repayment without penalty.

You can always opt for the longest loan. At the same time, make ad-hoc early repayments as and when you like.

 

[Merg91]

Commercial bank home loans only have early repayment penalty for first 2 years if not wrong.

I pay bank home loan monthly by cash first.
Never touch my cpf oa after initial lump sum.
Bank saving account yield is miserable.

HDB loan has the flexibility of early repayment without penalty.

You can always opt for the longest loan. At the same time, make ad-hoc early repayments as and when you like.

 

[Mecisteus]

Commercial bank home loans only have early repayment penalty for first 2 years if not wrong.

I pay bank home loan monthly by cash first.
Never touch my cpf oa after initial lump sum.
Bank saving account yield is miserable.

HDB loan, you can pay $10k today. You can pay another $10k next month.

Anytime, you like. And you will see loan maturity gets reduced.

Pay cash means losing the liquidity.

So I would say, HDB loan @2.6% is worth it.