Skip to main content

HDB Mortgage Strategy

Several years ago, when I bought my first HDB flat, I am shocked to find out that I have paid more than S$20K of interest in 4 years time. As a result, I cleared out my CPF Ordinary Account for the second time to reduce the monthly repayment amount. Probably most of you can guess when is the first time, bingo, when you purchase HDB, HDB will clear off all the amount in Ordinary Account and loan you the balance. In another word, if one has about 30% of money in Ordinary Account for example, he/she can only get 70% loan. The reason why I don't reduce the mortgage tenor is because who knows, I might face financial difficulty in the future and keeping the 30 years loan period with lower monthly installment will be a better choice. I feel relief thereafter.

Nevertheless, I start to regret now! I shouldn't have done this!

As of current rate (history shows that this is quite a stable rate), CPF is paying interest of 3.5% per annum for the first S$20K in Ordinary Account and 2.5% for the amount thereafter. 

I have a wish. I wish that I am able to afford 2nd property (condo in Singapore) in 2017 without selling off my HDB. Therefore, I think not going for partial repayment will be a better strategy. By living in for so many years, I really can't bear to sell it off, the emotional is there. The property market shows sign of going south now. I hope that by 2017, private property should be affordable to me and all the current cooling measure by government will no longer be there.

Adding one more property needs bullet. Hence, the sum that I spent on lump sum payment is the bullet that I need since I do not have much cash on hand.   

By sharing this, hope that this can help the rest who are in similar situation as me to better plan your best suit strategy before making any decision.


~~Cheers!!!~~

  
Labels:

Comments

Post a Comment

Popular posts from this blog

Branded Bag Cleaning Service

R ecently, my brother commented that my Prada bag looks like a dumpster bag and no one will steal it since people thought that it is not authentic. I have been using this bag for 6 years and I think I am used to the dirty sights, that's why I don't really mind the dirty issue. Few years back I have tried to wash it with soap powder but those black patches are still there, doesn't really help. I am aware that there are shops that offer bag cleaning service but they charged an exorbitant price. As a result, I have been putting aside the cleaning task for years. Two weeks ago, I finally decided to give it a try. So, I went down to the shop and asked for a quotation. To my little surprise, they quoted me S$140. After some bargain, I paid S$120 for the cleaning service. The shop is located in a mall and therefore they follow normal mall operation hours. The shop accepts credit cards or NETS. The cleaning service takes not more than 10 days. I received SMS before 10 days due ...
Post a Comment
Read more

2nd HOME in Singapore

C orrect me if I am wrong, my understanding of HDB rule is the local can purchase second residential property after serving 5 years of minimum occupation period for the HDB flat.   After residing in the HDB flat for more than 4 years, wild dream began to appear in my mind. I am eyeing for HDB maisonette around my area. The 2 storey flat looks so spacious that capture my heart. After some renovation work, the flat must be as comfortable as double storey landed property. For your information, some HDB maisonette is at level 1 and 2. Those owners even convert the grassland in front of their flat to be their own garden with plants and swing as well as laundry. On the other hand, many people out there might be thinking of purchasing private condo after serving minimum occupation for the HDB flat which is quite different from my wild dream. Some of them even sold off the existing HDB flat in order to fund for the down payment of the private condo. I even saw some of the people up...
Post a Comment
Read more

High Interest Kids Saving Account

I n Singapore, we have CDA savings account for new born with dollar for dollar matching from the government. In addition, for those with household income <S$4500, you just need to save S$50 and OCBC will contribute one time S$100 and subsequently Singapore government will match another S$150 into the CDA account. As a result, you have S$300 in the account with only S$50 out of pocket and this S$50 can be a portion of baby bonus (let's say $6K). Hmm..., these sound not bad after all! Nonetheless, the drawback is, the interest earned for this account is pretty low which is about 0.8% a year. Therefore, I don't think it's wise to deposit the full lump sum of baby bonus into CDA account at one go, just the sufficient amount to be spent on doctor visit, immunization, etc. Lately, I found out that BankWest (one of the bank in Australia) is paying 5.75% variable interest for Kids Saving Account. This is a monthly savings account whereby you can choose to deposit A$25 to A$250...
1 comment
Read more