My parents are getting divorced and I am taking over the home ownership, because my mother is ineligible to do so. How to pay down the loan quickly, and how many years I should pay it within?

I have to refund him his CPF payment for the house thus far, which amounts to about $130,000. There is $25,000 remaining in the mortgage payment. Which means I will need to take a loan of about $150,000, which is daunting given my monthly fresh grad income of less than $3,000. Is it better to take a CPF loan, which has an interest of 2.6%, or one of those bank loans that has a fixed rate of about 1.6% for three years and a variable rate after?

4

Discussion (4)

What are your thoughts?

Learn how to style your text

N

30 Sep 2018

I don't think there is fixed rate 1.6% for 3 years anymore. It's more like 1.9% now.

Reply

Save

Jonathan Chia Guangrong

29 Sep 2018

SOC at Local FI

Sorry to hear about your situation. Hope somehow things can be resolved peacefully at home. Hdb loan or bank loan. The former will be a wiser choice, even with the higher rate currently. True that bank loans may have lower rates for now but with the Fed in the US raising interest rates recently, with one more hike this year and a few more next year, it's gonna be very likely sibor will rise also. And bank loan rates in tandem. Calculate the likely repayment rate for CPF based on the maximum loan period you can take, then see if you can contribute a higher amount than the suggested monthly repayment. This will help to bring the loan quantum down quicker and reduce the repayment period as well. I just did the same for my hdb loan recently as well. Hope this helps

Reply

Save

HC Tang

29 Sep 2018

Financial Enthusiast, Budgeting at The Society

150k loan , at the current situation ,best to take CPF loan for HDB at 2.6%. Though bank lower inter...

Write your thoughts