Should I do partial lumpsum payment upon BTO key collection ?

I have a lumpsum of $100,000 available on hand. I'm able to take a full HDB Loan.

My BTO key collection is coming and I'm wondering if it's wise to use the $100,000 to pay off the BTO (downpayment paid seperately already) at key collection, taking a lower loan amount to be repaid monthly via CPF. My idea is lower loan = lower interest from HDB loan (2.5%) and lower CPF accured interest (2.6%) payable.

Or, should I keep the lumpsum on hand and put into other investment vehicles like bonds, Fixed D to gain interest? Current market est 3%.

I'm looking at moving house after MOP.

Have anybody done the math before? Which is better?

To pay off as much at key collection , lower loan lower interest payable
Take maximum loan given by HDB Loan, gain interest from the cash on hand

Thanks!

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I.L.

03 Mar 2024

I read somewhere that in theory, the $10 today worth more than $10 in the next decade. This means that if you borrow 10 sgd today, it is worth more than the 10 sgd you return ten years later due to inflation. Thus, it is more financially sensible to maximise the loan period.

But of course, one needs to factor in the interest paid and see if it is sensible to stretch the loan period.

Personally, I will pay off a sum at the key collection and still maximise remaining loan period. Lol, why not do a bit of both?

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YOC

02 Mar 2024

Are you able to ensure you can earn higher interest? I've seen people wanting to do that but end up not doing because they are afraid of losing that capital and be in a worst off situation.

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SH

01 Mar 2024

If you can earn higher interest with that $100k vs the lumpsum repayment plan you had, why not inves...

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