HDB Loan Repayment through CPF

[Sfhuang]

Should I max out my CPF repayment (to cut short the HDB loan repayment period) or save some for future downpayment should I buy another property?

 

I've asked around but opinions differ.

 

Any advice appreciated!

[Theoldjaffa]

if you are talking about buying private property, do private developers allow the use of CPF for downpayment?

 

if you are talking about buying another HDB, then might as well max out your payments, since you cannot concurrently own 2 HDBs.

 

 

for me, i will keep about 6-8 mths worth of CPF to cover my payments should i be jobless, and use the rest to downpay and reduce my principal loan.

[Arowana1]

short term - save for rainy days

long term - save for 2nd property

 

i short term - clear quite a lot

medium term - save for rainy days

long term - now not enough for 2nd property... need to wait 5-10 years :-(

 

mistake mistake, cos never crossed mind for 2nd property tat time. but now looking at how cpf is locked in until dunno wat age, i think better to throw into 2nd property, then rent out. tis is wat i call unlocking cpf into cash!

 

so do keep some money in cpf. enough for short term 2 years installment, long term downpaymnet for 2nd property. the rest, u can use to clear.

[Gasgasgas]

if am not wrong...the 1st 60,000 in your cpf a/c is untouchable...part of'minimum thingy'...

[Apollo]

u do not have a option B...

 

HDB will insist they squeeze every drop of blood inside the CPF account.

[Route88]

If i have enuff money...i pay all.

[Ahyoo2002]

Did anyone thought about this, CPE is earning 2.5% + 1 % = 3.5% while housing loan is 2.6%, is it better that I keep my money in CPF?

[Dafansu]

hdb will whip out your ordinary account to the max, u wont be able to choose how much to save unless u invest that amount of money

[Zoom99]

Before you purchase HDB flat, "divert" some funds to purchase unit trust, shares or gold.

 

Even when HDB empty your OA a/c, you still have buffer for rainy days.

[Zoom99]

if am not wrong...the 1st 60,000 in your cpf a/c is untouchable...part of'minimum thingy'...

 

Not exactly.

 

This $60k rule is applicable if you want to invest.

 

If you used for housing purpose, then this rule does not apply.

[Alpha78]

If you max out your monthly repayment, your CPF will be empty for years to come. What happens if suddenly you are unable to repay the monthly instalment? They will ask you to cough up cash, otherwise they reserve the right to kick you out. Therefore, it's better to maximise the loan duration so that your CPF can grow and buffer for rainy days.

 

Btw, if you want to use CPF for second property, you need to meet the prevailing minimum sum in your Ordinary Account first.

[Qpik]

care to elaborate based on the following scenarios:-

 

after sale of flat (1st time owner, direct fm hdb), must the proceeds be returned to cpf accts, the minimum thingy be locked in and the balance then can be used for (bearing in mind both owners are below 40yrs old)

(1) resale downgraded flat

(2) resale upgraded flat (do we still enjoy interest rate of 2.6%??)

(3) pte property

 

TIA

[Bugsbunny]

put at CPF to enjoy 3.5% interest.

[Sfhuang]

Did anyone thought about this, CPE is earning 2.5% + 1 % = 3.5% while housing loan is 2.6%, is it better that I keep my money in CPF?

 

If that is the case, should I change my monthly loan repayment to as low as possible, up till max allowable loan period?

[Slayer]

If the cost of the loan is much higher than the returns of the remaining CPF balance that U hve , then it is good to it that CPF monies to pay off the loan.

 

This is current market, it is not really the case. take for example. if u are 30+, you are likely to take more risk in investment. So may be use the balance CPF monies to invest for higher return. take a very simple scenario.

 

you have 50k hdb loan balance , u have 10k cpf balance accumulated over the last 5yrs.

What do u do with it? pay off the loan to reduce to 40k or invest the 10k hoping the return is able to offset some of the loan interests that u are paying for the loan?

ie. if your HDB loan is 2.6% interest. and there is an opporturnity to invest your 10k to get a decent 5% return.

what would u do ? (i would invest the 10k). :)

 

 

Should I max out my CPF repayment (to cut short the HDB loan repayment period) or save some for future downpayment should I buy another property?

 

I've asked around but opinions differ.

 

Any advice appreciated!

[Sfhuang]

If the cost of the loan is much higher than the returns of the remaining CPF balance that U hve , then it is good to it that CPF monies to pay off the loan.

 

Thanks, I was actually thinking of using my CPF balance as downpayment for a second property. If like some bros mentioned, it cannot be used for downpayment for private property, then it will make more sense to invest the balance like you said.

[Sfhuang]

If i have enuff money...i pay all.

 

But the money can earn 3.5% interest wor ...

[Yr1985]

care to elaborate based on the following scenarios:-

 

after sale of flat (1st time owner, direct fm hdb), must the proceeds be returned to cpf accts, the minimum thingy be locked in and the balance then can be used for (bearing in mind both owners are below 40yrs old)

(1) resale downgraded flat

(2) resale upgraded flat (do we still enjoy interest rate of 2.6%??)

(3) pte property

 

TIA

 

Provided no paper loss, that is if u sell ur flat above valuation, all proceeds below valuation will go back to CPF, any balance above valuation you will get to keep as cash.

 

1) Yes, u can buy resale downgraded flat, but u can't loan from HDB cos it's a downgrade. Bank loan is the only option, and bank loan sucks at 5%. If you decided to downgrade, i suggest u pay off everything with your proceeds and cash from your first flat

 

2) For resale upgraded flat, u can loan from HDB, interest rate still remains at 2.6%. Bear in mind, bigger flat means you get lock for another at least 25 years. Resale market is crazy now, cash above valuation can buy u a 1.6

 

3) Pte property, only bank loan of cos. Pay the downpayment, no need reno, move in straight. Bear in mind, it's a half million loan at least. Floating bank rates. Think carefully. You wanna work like a slave to a pigeon hole if u can choose not to?

 

Fyi