Just sharing my thoughts:
A) Whether to get HDB or bank loan
1) stability of income of the ones paying the loan - if working in higher risk industry affected by pandemic or other reasons - probably better to get HDB loan - since govt won't really drive ppl out of HDB w lapses in payment due to sudden retrenchment and will work out a plan. Bank are less merciful... even w some relief measures - they hope to get the property quickly upon lapses in payment. (Different objectives driving HDB vs Bank)
2) whether you have enough cash for downpayment (5% of HDB resale flat for bank loans) + COV and renovation (depends - if major can go up 80-100K cash or more?). HDB loan downpayment can be paid by CPF.
3) whether you plan to pay off the loan/principal earlier - appears that banks don't like this coz they earn lesser interest so penalties are inevitable.
4) bank loan interest for the last 10 years are less than 2.6% - but going forward unknown - given the pandemic might still be lower than HDB in near future in my opinion.
If sure can pay for the loan period (10-20years)+not planning to repay early - bank loan more attractive (save on interest). If some uncertainty, plan to repay early - hdb loan seems better to me. If long loan period (15 years or above) and low cash, take HDB loan after 5 years refinance to bank loan lor.
B) Amount to loan
1) You can try to get the Housing Loan Eligibility letter from HDB or get an estimate (https://homes.hdb.gov.sg/home/calculator/budget) - then they will recommend you the amount to loan compared to how much others buying the same priced house are loaning and period (Prudent, Moderate, Maximum) - I personally find that very helpful. It also depends on how much you can earn from the cash you want to use for downpayment - if you can earn more than 2.6% through investments then better to invest?
2) Your plans - retirement, 2nd home etc. and your comfort level. We can't be paying the loan when we are no longer working i.e. maybe in 60s? With or without debts - we still need to have separate plans for savings/investments + possible loss of income, retirement, spendings, children/parents etc. - if after all these still have $$ for downpayment should reduce debt in my opinion.
Just sharing my thoughts:
A) Whether to get HDB or bank loan
1) stability of income of the ones paying the loan - if working in higher risk industry affected by pandemic or other reasons - probably better to get HDB loan - since govt won't really drive ppl out of HDB w lapses in payment due to sudden retrenchment and will work out a plan. Bank are less merciful... even w some relief measures - they hope to get the property quickly upon lapses in payment. (Different objectives driving HDB vs Bank)
2) whether you have enough cash for downpayment (5% of HDB resale flat for bank loans) + COV and renovation (depends - if major can go up 80-100K cash or more?). HDB loan downpayment can be paid by CPF.
3) whether you plan to pay off the loan/principal earlier - appears that banks don't like this coz they earn lesser interest so penalties are inevitable.
4) bank loan interest for the last 10 years are less than 2.6% - but going forward unknown - given the pandemic might still be lower than HDB in near future in my opinion.
If sure can pay for the loan period (10-20years)+not planning to repay early - bank loan more attractive (save on interest). If some uncertainty, plan to repay early - hdb loan seems better to me. If long loan period (15 years or above) and low cash, take HDB loan after 5 years refinance to bank loan lor.
B) Amount to loan
1) You can try to get the Housing Loan Eligibility letter from HDB or get an estimate (https://homes.hdb.gov.sg/home/calculator/budget) - then they will recommend you the amount to loan compared to how much others buying the same priced house are loaning and period (Prudent, Moderate, Maximum) - I personally find that very helpful. It also depends on how much you can earn from the cash you want to use for downpayment - if you can earn more than 2.6% through investments then better to invest?
2) Your plans - retirement, 2nd home etc. and your comfort level. We can't be paying the loan when we are no longer working i.e. maybe in 60s? With or without debts - we still need to have separate plans for savings/investments + possible loss of income, retirement, spendings, children/parents etc. - if after all these still have $$ for downpayment should reduce debt in my opinion.