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View Full Version : is it good to wipe out all your cpf for you flat?



eileenlim
10th September 2009, 08:44 AM
i understand that many people who are buying flats prefer to use partial of the money for loans leaving the minimum for their flat and taking a loan for the remaining.

i also understand that bank interest rate are higher then HDB. if one have to take a bank loan, is it better to pay more upfront and take less loan or use the money for a tentative investment.

irng
14th September 2009, 05:55 PM
i understand that many people who are buying flats prefer to use partial of the money for loans leaving the minimum for their flat and taking a loan for the remaining.

i also understand that bank interest rate are higher then HDB. if one have to take a bank loan, is it better to pay more upfront and take less loan or use the money for a tentative investment.

well many people believe that the interest rate for HDB is low and therefore would rather use the CPF money for investment to reap more profits. but personally, i would rather take a lesser loan so i don't have to burden with the monthy installment. i rather keep the monthly installment low cos i never know when i will lose my job.

HalcyonVI
14th September 2009, 07:01 PM
Actually bank interest rates are lower than HDB's now :) It definitely makes sense to go for 80% financing and use the minimum from your CPF. You'll be losing money if you pay down from your CPF at this point in time.

eileenlim
15th September 2009, 08:34 AM
Actually bank interest rates are lower than HDB's now :) It definitely makes sense to go for 80% financing and use the minimum from your CPF. You'll be losing money if you pay down from your CPF at this point in time.

but is the interest rate from bank flat throughout the period or only for the first year or second.

but with the currently market situation, investing with CPF does not warrant profits. my investment with prudential is losing big deal.

HalcyonVI
16th September 2009, 04:13 PM
I'm referring to the CPF Ordinary Account (OA) interest rate of 2.5% being higher than bank interest rates rather than rate of returns from investing your CPF. Yes, bank interest rate is lower than 2.5%! In fact, you may even be enjoying an interest rate of 3.5% from your OA - I quote from the CPF website "In addition, an extra 1% of interest will be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA."

Bank interest is not flat but that is hardly an issue as you can always pay down your loan from CPF when the bank interest rate goes higher than the OA interest.

eileenlim
16th September 2009, 06:31 PM
I'm referring to the CPF Ordinary Account (OA) interest rate of 2.5% being higher than bank interest rates rather than rate of returns from investing your CPF. Yes, bank interest rate is lower than 2.5%! In fact, you may even be enjoying an interest rate of 3.5% from your OA - I quote from the CPF website "In addition, an extra 1% of interest will be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA."

Bank interest is not flat but that is hardly an issue as you can always pay down your loan from CPF when the bank interest rate goes higher than the OA interest.

thanks for the great advice.

now the government has step in to control the property bubble, what's your take in investment in private properties.

my boss told me her loan with HSBC is only 2% compared to previously at 5% but now that she has to start her installment immediately rather then waiting for TOP. which she does not mind. however, for those HDB upgraders, do you think it's tought for them to manage the loan as the amount gradually increase nearer to TOP.

Curry Chicken
29th November 2009, 09:05 PM
I don't think it should be that hard to manage lor. Upgraders should have plenty of time to plan their finances!!

eileenlim
30th November 2009, 09:24 AM
my brother bought a private condo and he is currently staying in a five room hdb. he is thinking to rent out his hdb to help finance his condo. do you think it can work this way?

myong406
30th November 2009, 11:04 AM
my brother bought a private condo and he is currently staying in a five room hdb. he is thinking to rent out his hdb to help finance his condo. do you think it can work this way?


this can work for sure, only if he is using the rent collected from his HDB to pay for the rent of the Condo. but to use the rent to actually pay for the condo itself seems rather difficult. i have friend who is using the 1st idea. it can work.

eileenlim
10th December 2009, 08:15 AM
sorry i don't quite understand what you meant. both also using the rent to pay for the condo what?

what you saying?

myong406
10th December 2009, 10:09 AM
ok ok. . . let me explain. lets say u want to stay in a condo but cant afford to buy one. so, u can rent one. to do this, u rent out your HDB apartment and collect some cash and with that cash, u pay the rental fee for the condo.

what i said was difficult, is when u use the rent u collect from the HDB flat to pay for the purchase of a condo.

eileenlim
9th April 2010, 10:17 AM
oh ok ok. i got it now. but my brother intention is to purchase the condo and use the rental from the HDB to help finance the purchase loan though i think might be insufficent, i think he might need to top up but the rental would help alot.

happylalapo
6th May 2010, 09:48 PM
I was just reading this post :) interesting!
Buy a condo and plan to service the condo with rent from the Hdb!
Humm, I think there are a few consideration here that needs to be plan out ;
1) is your brother eligible to rent out his Hdb?
2) can the rental pay for the mortgage of his servicing condo.
Usually to make sense is to rent out the condo which fetch better price to service the loan of condo, Sheldom the other way.
Of course , assuming part one is clear and that your brother serving for the condo is sufficient with the rental of the flat ; than probably It is okay.

eileenlim
7th May 2010, 04:34 PM
i not sure if he is eiligle but i thought as long as you stay in the HDB for more then 5 years then you can rent out the whole house.

as for the condo, they are aware that the rental from the HDB is insufficient but to pay the mortage for the condo but they are willing to fork out moeny to stay.

they are looking for confort of staying in the condo more than making money from it.