HDB Loan Repayment through CPF

[Wadexu]

You still can use the CPF for the downpayment of the private. see the attachment or

http://mycpf.cpf.gov.sg/NR/rdonlyres/2E34D...imitSummary.pdf

for detail.

hsgCpfLimitSummary.pdf

hsgCpfLimitSummary.pdf

[Sfhuang]

Thanks for the info!

[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?

 

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

 

So my reasoning is correct?

 

Beware there is another cap, I think you can only use up to certain percentage ( I think it is 120%) of the valuation of your flat using CPF money. Meaning, if you flat worth $300k, you can only use up to $360K CPF money, the rest need to pay cash.

[Gearoil]

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!

 

Whatever the others are saying , bro, I think you better stick to paying your loan to HDB after maxing out your CPF. The more you pay the less will be the interest you need to cough out. You'll be very shock to know , if you calculate, what HDB is getting as interest for the entire duration of the loan.

 

If you do not have the REAL means, do not be greedy and or try to invest in another property.

[Sabian]

Estimated: CPF pays 2.5%, HDB charges 2.6% (difference of 0.1%)

 

Now with the increased interest earned on the first 60k CPF balances, don't be in a hurry to pay down your loan.

 

Keep some buffer (u decide on the amt u comfy with) in case you jobless

As you are on mortgage insurance, if u kick the bucket(touch wood), the insurance will cover your share of the loan obligation, so you only need to worry if u jobless or kenna long term illness.

 

The above does no apply if your loan is from bank.

[Yr1985]

Second tat, this is capital repayment, most ppl tot the longer the loan stretch with hdb the better, the same concept abt 10 yr loan for cars, worst still with cash rebate and overtrade. If can, stay within comfortable zone.

[Apollo]

U forgot.. Inflation is 4-5%

 

so if u take a risk as investment... the repayment amt + interest rate may eat into the profit.

 

also. there is a HDB charge up to 25% for resale of 2nd flat.

[Solar]

"there is a HDB charge up to 25% for resale of 2nd flat."

 

say, if i sell but not buying anymore, this 25% still applies to the proceeds?

[Sfhuang]

also. there is a HDB charge up to 25% for resale of 2nd flat.

 

I don't understand this part. Is this the resale levy?

[Sfhuang]

Whatever the others are saying , bro, I think you better stick to paying your loan to HDB after maxing out your CPF. The more you pay the less will be the interest you need to cough out. You'll be very shock to know , if you calculate, what HDB is getting as interest for the entire duration of the loan.

 

If you do not have the REAL means, do not be greedy and or try to invest in another property.

 

Yah understand ... but I was thinking of using my CPF balance as downpayment for a private property, so it's a matter of balancing the remaining loan interest and saving up enough CPF for a second property.

[Sfhuang]

Now with the increased interest earned on the first 60k CPF balances, don't be in a hurry to pay down your loan.

 

Yah that's what I thought too ... but I somehow think that I should repay the loan asap if I am able to. At least I remove one loan off the liability list.

Edited April 13, 2008 by Sfhuang

[Gasgasgas]

if i were to have enough downpayment for 2nd home (pte), i wld buy it and rent out hdb...there is extra few hundred dollars profit after deducting the monthly rental from monthly HDB payment though i may need to top up few hundred dollars more...this HDB rental revenue can cover my pte flat monthly installment...but guess the timing is not now...coz property price is at peak...but i forsee at least 20% correction in year 2009 after IR hype fever.

[Yslim]

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!

 

Hi,

According to your plan, you will probably need to fork out 5% cash and 5% cpf to buy your pte property and loan 90% for 30 years (I assume).

 

Assuming you loan 500k for the pte ppty, you will probably need to pay 2.5k per month. Your hdb flat, assuming 5 room, will fetch 1.2 - 1.5k. So every month you need to fork out another 1k min plus any maintanace fee. Then you will have to pay eletricity, tax, etc for both property. This will continue for the next 30 years.

 

Pls consider carefully before you proceed. (But if you earn >10k a month, then it will be ok)

[Gasgasgas]

hi, think need to fork out 10% cash...cpf is not allowed for first $60K.

 

For 500k property, need to fork out 50K downpayment + 10K stamp/legal fees + 10K furniture/etc...so about 70K cash total..and not including some buffer in your bank a/c to save for months where there are no rental income...100K income for this investment approach would be comfortable.

[Sabian]

also. there is a HDB charge up to 25% for resale of 2nd flat.

 

I don't understand this part. Is this the resale levy?

 

If u are not buying a 2nd subsidised flat from HDB, need not pay the resale levy.

[Sabian]

assumption: your flat is purchased as first timer and loan is 2.6% from HDB.

 

if u feel better when u pay down the loan with CPF, go right ahead, but leave some buffer.

 

but if u paying by cash and have other loan liabilities at higher interest rate, then pay down those first.

[West]

Not exactly.

 

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

 

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

 

Got to be careful.

If it is second property, $60K rule does apply.

[West]

You still can use the CPF for the downpayment of the private. see the attachment or

http://mycpf.cpf.gov.sg/NR/rdonlyres/2E34D...imitSummary.pdf

for detail.

 

Again, this table on using of CPF apply for your 1st property only.

If you are buying second property, more rules come in.