Buying 3-room resale : Use more cash or borrow more from HDB?

Which is a wiser choice financially?

Some facts:

CPF : $114,550

All grants combined : $65,000

Max cash I feel comfortable with putting down: $30,000

Amount I need to borrow from HDB : $155,000 - $165,000

Based on 25 year loan repayment at 2.6% interest, I have to pay around $700 - $750 monthly.

(CPF OA contribution monthly from company salary is $800 (which I think can be used entirely to pay for monthly installment fee).

My max 3-room resale budget : $360,000 (this is what many 3-room resale units I'm interested in are going for currently)

Based on HFE, the max HDB will allow me to loan is about $200K.

I'll be renting out the master bedroom upon buying.

I've a stable job but you never know, if I go out of job one day, paying the monthly loan straight out from savings will be painful lol

What would you do?

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Just_Saying

11 Aug 2023

Take maximum HDB loan at 2.6%, as current high interest environment will have many instruments that yield more than 2.6%. And since HDB loan has no penalty on early repayment, you can decide on when to payback (when you cant get more than 2.6% elsewhere with your money).

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Connie

02 Aug 2023

would max out CPF OA, and take the remaining loan and rent out the master bedroom as you planned
even if you lose your job, your tenant will be helping to defray the mortgage
At current interest rates, you can put any cash you don't tie up into relatively high yield, low risk assets like T-bills and 'earn'
$30k loan vs cash in my mind doesn't make a big difference

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YOC

31 Jul 2023

I dont really like debt (good/ bad). can you loan max and then pay off voluntarily as much as you ca...

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