Home loan queries

[DW]

Bro, how to get $1035 OA per month? From what I have seen, it is about $945 (excluding months where bonus is being paid).

CPF max contribution amount is basedon SGD4500 cap.
Employer = 14.5%
Employee = 20%
Total = 34.5%
Therefore
(1) Total CPF contribution (max) allowable per month (Exc bonus) = 34.5% x 4500 = SGD1553.
(2) Of the 1553, 2/3 goes to the OA each month = 2/3 x 1553 = SGD1035.40
(3) The remaining 1/3 of the 1553 is split up between SA and MA.

You can easily verify (1), (2) and (3) by logging into CPF website using your SingPass.

[DW]

I saw your comment on income levels and just want to share some views of mine. I appreciate this might be entirely related but just some of my personal views.

There has been quite a fair bit of argument that income levels (across the board) in Singapore has not really risen that much over the years but why has home affordability appear to have increase by such scale??

Following from your comment, here are my simple views. Assume some broad numbers:-

1. 80% of population stays in HDB.
2. 20% of population stays in private condos.
3. Of the 20%, 10% is in mass market (conservatively).
4. The remaining 10% is in mid to high end market.

I am seeing a lot of professionals and executives already hitting 4500SGD limit pretty easily, and a significant number of them achieves that within the 1st year of their career. That is, say, 26yrs old (for guys with NS) and 23 yrs old for girls. And honestly, these are not the top tier. A fairly ok job at the front office in a foreign bank will get you easily inthe range of 7 - 8K/mth. AND, banks are not the ones that is the biggest/best pay master (as you can already see whats happening the market now) now, so I am not talking about the highest band numbers.

Often, people talk about Singaore gross GDP growth or spread spectrum income growth has not increased by the corresponding increase in property prices... but it is also important to note it might be the top 20% income population that is buying the top 20% property assets (this is a broad generalisation that HDB forms the next 80% entirely, which in itself is a separate discussion altogether). Thus, unless your income analysis is done based on these top 20% (not forgetting foreign investors), it is hard to say income has not caught up with property price levels.

My feel is that most professional executives pay scale has risen by than 20-30% p.a. basis. During the boom years, from 2006-2009(early) most experience some (at least) 20-30% jumps in salary scales for EACH jump from each firm. Thus, it is not unimagineable the affordability of these 20% group have certainly increased significantly during the previous boom. Whilst the question is always about so what happens now?? Are those salary increases going to be sustainable - chances are no... but those who still remain with their jobs, will be keep in place and will continue to invest.

My simple views.

depending on yr age. the older u r, the higher the pct of yr cpf contribution goes into yr special and medisave account, thus yr OA account gets lesser contribution.

DW's calcuation of $1035 is base on the max contribution to OA account by a relatively young income earner of $4500 and above.