Using CPF to settle HDB Loan in full?

[Darryn]

wah lao... like that siao liao lo... i must make sure that my loan doesnt goes below 100K before i intend to sell it...

 

If sell is different case - once pay off mortgage, and payback your CPF (plus interest) the balance you are allowed to take in cash.

 

 

Is just if you refinance then cannot take cash out of the house.

[Darryn]

but most bank's are having it.... around 100K, only a few at 80K.... haiz.... sianz, such law really doesnt make sense at all.... its my property and I cant even refinance it when I need cash??? die die must sell and buy again??

 

The govt policy is such that they don't want you to "encash" your retirement savings.

 

In some ways makes sense.

 

Let's say I buy for $200k, paymortgage for 5 years out of CPF, now it is only $160,000.

 

Refinance for $180,000 and use the $20,000 "extra" to have a holiday.

 

I have effectively used $20,000 of my retirement savings for a holiday now.

 

And you can be sure many many people would do this.

 

The flip side is that people also cannot use their housing asset to finance a new business, an entrepreneurial idea, a foray into self employment - which is bad as it stifles creativity.

[Ysc3]

anyone has a thumb on this ?

 

my colleague told me 2 weeks ago that he wanted to pay off his loan from HDB as he has "saved" enough CPF to pay it off.

 

however, when he called HDB, he was told that he cannot use his current CPF savings to pay off his existing loan but only part of it. The rest he has to pay in cash - abt $60k !!

 

is there such a thing ? must use cash and as CPF not allowed ?

[Eyke]

is there such a thing ? must use cash and as CPF not allowed ?

 

How much CPF can you use?

 

[YellowFlash]

I just looked at Maybank - they say no minimum quantum for house loan.

 

The policy may have changed since two years ago when I refinance, now at the very least, can get a loan from maybank.

 

hi Darryn, your information is wrong, Maybank mininum loan quantum is 100k, similar with many other banks. DBS previously had min 80k but now i believed is revised to 100k.

[YellowFlash]

if you have enough CPF at the moment to clear off outstanding loan, i would say hold your horses....get a bank loan at the lower interest rates and then leave more money in CPF. Subsequently if interest rates are against you, you may chose to redeem the full loan after the lock in period.

[LoverofCar]

Hi there,

 

Assuming you have just bought a resale HDB flat and have sufficient CPF to clear off your loan at one go, would you do it at the prevailing market situation? What are the plus and minus in doing so?

 

Please comment.

 

Thank you very much.

 

Regards,

 

of cos to pay off in full if can...I did just that after owning my 5 rm flat for 5 years...did you calculate the interest if you roll the loan for another 20 years?...You are paying for two flats instead of one...

[LoverofCar]

hi all,

actually until now, i still not understand, why we need to pay the interest, if we use cpf to pay the hdb loan.

is cpf is not my own money?

 

You are taking the loan from Ah Pa to buy the flat upfront....then you pay by instalment....Ah Pa where got so good don't charge interest...that's why..pay in full and no more interest..

[Nlatio]

Hi there,

 

Assuming you have just bought a resale HDB flat and have sufficient CPF to clear off your loan at one go, would you do it at the prevailing market situation? What are the plus and minus in doing so?

 

Please comment.

 

Thank you very much.

 

Regards,

 

 

See-P-F got $$$, pay in full.... Period..... save hell lot of interest.....

[Tigershark1976]

If sell is different case - once pay off mortgage, and payback your CPF (plus interest) the balance you are allowed to take in cash.

 

 

Is just if you refinance then cannot take cash out of the house.

 

 

u forget to mentioned that HDB also earns from the sales / purchase of flat....

[Mllcg]

You are taking the loan from Ah Pa to buy the flat upfront....then you pay by instalment....Ah Pa where got so good don't charge interest...that's why..pay in full and no more interest..

 

where got AH pa loan?

 

CPF is OUR money.

[D3badge]

Hi there,

 

Assuming you have just bought a resale HDB flat and have sufficient CPF to clear off your loan at one go, would you do it at the prevailing market situation? What are the plus and minus in doing so?

 

Please comment.

 

Thank you very much.

 

Regards,

 

 

for me I will take a 3 years fix rate home loan and max out the loan tenor, then 3 years later think of this issue again. Reason??

 

1. current 3 years fix rate 1.99%p.a?? CPF OA 2.5% the other $20,000 at 3.5% thus you are doing positive carry u still earn a little.

 

2. You fully paid now still own CPF interests if you gonna sell in future.

 

3. get a home loan insurance to insure ur loan thus in the event of unfortunate like you or ur wife die, home loan fully paid up and CPF still got $$$ to leave for you or wife see who die 1st lah

 

just my thought me more on practical approach

 

 

[D3badge]

thot hdb require lesees to use up all their cpf b4 granting a loan?

 

think resale no HDB loan yeah?? this I am not too sure

[D3badge]

Currently, there's 2 party involved. HDB and CPF board. You loaned from HDB at 2.6 percent interest rate and use your CPF monies to pay HDB.

But withdrawing from CPF board means you will lose out in the interest rate which is currently pegged at 2.5%. So if one day you sell your house, (and you have not reach the eligible age to withdraw your CPF), you need to put back the money which you withdraw from CPF right?

 

So when you return the monies back to your CPF account, they will calculate how much interest you would have "earned" for the whole duration, and you put it back together with the principal sum. But if you sell your house at a loss, then it is a different story.

 

bro very clear.......... than my point 1 might be vaild or invalid but I always believe HPS as life is full of uncertainty thus maybe the interests lost than by not paying full is like premiun in case one spouse die 1st

[Stanong11]

HPS is still useful (although only to a certain extent), unless you are paying in full, which many Singaporeans can't afford to. Cause how many young people have a lot of CPF monies in their account when they start work. Even if there salary is high, CPF deduction is still capped at salary ceiling of $4500.

 

Anyway, to TS, if you pay up your housing loan, and let's say you intend to sell the house and downgrade to a smaller unit in future, then the proceeds from your current flat will be used to pay for your new house. If there is excess from the proceeds after deducting total cost of new house (ideally no loan), it will be paid to you in cash. FYI.

[Stanong11]

To clarify with the rest, CPF interest is paid to yourselves (your CPF ordinary account). It is still your money (technically) because you are putting it back to your account. Don't be misled like the interest is paid to CPF board and you don't get it back.

[Darryn]

hi Darryn, your information is wrong, Maybank mininum loan quantum is 100k, similar with many other banks. DBS previously had min 80k but now i believed is revised to 100k.

 

Hey dude - how come yellowflash n raging bull got same avatar?

 

Anyway, where your info from. I haven't been to the bank recently, but from their website..

 

4.What is the minimum loan amount to apply for a Maybank home loan?There is no minimum loan amount for a Maybank home loan.

 

Here is the link

 

[Chemmie78]

anyone has a thumb on this ?

 

my colleague told me 2 weeks ago that he wanted to pay off his loan from HDB as he has "saved" enough CPF to pay it off.

 

however, when he called HDB, he was told that he cannot use his current CPF savings to pay off his existing loan but only part of it. The rest he has to pay in cash - abt $60k !!

 

is there such a thing ? must use cash and as CPF not allowed ?

probably exceed the withdrawal limit