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Thread: Loan

  1. #6

    Default

    Quote Originally Posted by Kelonguni View Post
    Depends on your purpose, type of property and personal circumstance.

    No single correct answer.
    Hi,
    It is a private property.
    OA will yield 2.5% interest.

    The current mortgage interest rate has already gone up to 2% more. I believe it will hit more than 2.5% in a matter of time.

    I can use $200k from OA to pay it off now. But that means I will forgo 2.5% interest on the 200% every year from CPF.

    But If i change my instalment to deduct from CPF monthly (I m paying cash now), then I can still have that 2.5% interest from CPF on after the balance after monthly deduction (ard $3000)

    So is full settlement or go by monthly deduction a better option?

    Thank you


  2. #7

    Default

    With this limited info, and not knowing what you have and using what I have and like to do.

    I will not use CPF.


  3. #8
    Ultimate Underdog
    Join Date
    May 2012
    Posts
    3,907

    Default

    Duplicated below.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.


  4. #9
    Ultimate Underdog
    Join Date
    May 2012
    Posts
    3,907

    Default

    One important consideration is if you are living in it or renting it out.

    Whichever the case, based on only these two options, just sit and hold liquidity in CPF is a better deal. You earn 2.5% interest (compounded) in CPF but pay 2.2% interest (reducing) in mortgage. When and if interest rates reach or exceed 2.5%, then you still have the option to pay it off anytime.

    Enjoy the ride.



    Quote Originally Posted by Forest ang View Post
    Hi,
    It is a private property.
    OA will yield 2.5% interest.

    The current mortgage interest rate has already gone up to 2% more. I believe it will hit more than 2.5% in a matter of time.

    I can use $200k from OA to pay it off now. But that means I will forgo 2.5% interest on the 200% every year from CPF.

    But If i change my instalment to deduct from CPF monthly (I m paying cash now), then I can still have that 2.5% interest from CPF on after the balance after monthly deduction (ard $3000)

    So is full settlement or go by monthly deduction a better option?

    Thank you
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.


  5. #10

    Default

    Quote Originally Posted by Kelonguni View Post
    One important consideration is if you are living in it or renting it out.

    Whichever the case, based on only these two options, just sit and hold liquidity in CPF is a better deal. You earn 2.5% interest (compounded) in CPF but pay 2.2% interest (reducing) in mortgage. When and if interest rates reach or exceed 2.5%, then you still have the option to pay it off anytime.

    Enjoy the ride.
    That’s what i thought I should do too but just wanted to have a second opinion yo be sure!

    Thank you!


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