Is it better to pay off the HDB loan? We have balloted for a BTO (ready in 4-5 years time) in a non mature estate, 3 rooms that will cost us less than $250k.

Currently, we have about $120k in OA and $300k in cash and investment. We have about 4-5 years time before the BTO is ready.

Should we pay off the BTO loan or pay it monthly? Why or why not?
As for the remaining money, should we invest and retire early or upgrade to condo? Why or why not?
If we were to upgrade to condo, should we sell or rent the BTO?

Thank you so much for your help!

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1M45

21 Jun 2021

1) Should pay monthly.

2) money you plan to pay it off the mortgage, which fortunately u dont, can use to invest in stocks.

Money you earn by selling off your BTO, with profit, use for upgrading, pay downpayment, use cpf to pay installment and other fees if possible. Same thing dont fork out addition cash. Just "re-invest"

Just sharing retirement plan with property

https://www.youtube.com/watch?v=hLCZVBnX2fM

His channel is very informative, for home owner and people who want to invest in SG property

3)sell HDB. ABSD. Sg property for capital appreciation , rental is secondary (deduct income tax, property tax, bank interest...) rental is sad

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Tan Choong Hwee

21 Jun 2021

Solutions Specialist at Providend

With a total of $420k in your cash/CPF/investment, you are in the position to fully pay for the 3 rooms if you want. However, it is better to take a bank loan (currently 1.2%~1.5%) than HDB loan (2.6%). There is no worry of mortgage rate increase after bank loan lock-in period, because you can refinance/reprice your mortgage loan then, or redeem the outstanding loan as the last resort since you have enough capital.

What is the value of condo to you? Is it for social status? For better quality of life? For potential of capital appreciation?

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