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Anonymous

22 Jul 2020

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Should I refinance my home loan now with the low interest rate - or pay it off completely?

I have a home loan which was I started about 2.5 years ago or so. Due to the covid situation and the interest rate, if i refinance is now, I'm sure it will be better.

I was also shown some videos about paying off your mortgage in 5-7 years:

https://www.youtube.com/watch?v=3f-ebCjeH8o
https://www.youtube.com/watch?v=4GonTct2WMk

One of them said we shouldn't refinance our loans.

Anyway, does the above strategy work in Singapore - the one explained by the two videos above? Appreciate help!

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Yong Chee

22 Jul 2020

Depends on your goals & objectives. When you pay off completely = lose capital to earn. So some might choose to have a low interest rate loan & put the excess capital they have into assets that earn them good interests/ interests higher than the home loans.

Having debt is not a bad thing if you leverage well on it. Hope that helps!

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