Leroy Chia

12 Jun 2020

∙

Is it a good idea to clear off my HDB loan with my savings so that my CPF can grow fast?

If I have extra cash and no idea how to invest, why not clear off the mortgage loan from HDB so that I can avoid paying double interest to loan and CPF.

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Elijah Lee

12 Jun 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi Leroy,

Yes, you could potentially do that, but taking a mortgage is also leverage in way. If you are paying 1.5% on your mortgage and can comfortably make, say, 3% on your spare cash (e.g. bonds), that extra 1.5% is yours to keep.

Of course, if you are very certain that you won't be investing, then doing a repayment of your loan does make you debt free. But I highly urge you to consider investing at least a part of the spare cash.

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Chris Chong

11 Jun 2020

Home loan in Singapore is pretty stable and the interst rate is low. If you can invest your cash saving in other vehicles that gives a higher interest rate than your HDB loan. It will be better to invest your saving.

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