Should i take maximum loan for a property or should i pay more cash upfront?

Financial advisers will tell you to take max HDB loans at max tenure.

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I personally prefer to use all my CPF first and remaining as a loan at max tenure.

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#Not proper financial advice.

The decision between maximizing your property loan versus paying more upfront is one I frequently discuss with accomplished professionals. It's not just about mortgage rates - it's about opportunity cost and strategic wealth building.

Recently, I guided a client - a senior technology executive - through this exact decision for his $2.5M property purchase. While conventional wisdom suggested paying more upfront given his substantial savings, we identified that maintaining investment liquidity would better serve his long-term wealth objectives.

Let's address a common misconception: "Paying more upfront always saves money on interest." While mathematically true, this oversimplifies the opportunity cost of capital. Consider:

1. Leverage Efficiency

• Current mortgage rates (1.8-2.5%) vs potential investment returns (6-8% historical average)
• Tax deductibility of mortgage interest for rental properties
• Impact on overall portfolio liquidity

1. Strategic Capital Allocation

• Emergency fund maintenance
• Investment opportunity accessibility
• Business venture flexibility
• Market timing advantages

1. Risk Management

• Property value appreciation vs liquidity needs
• Interest rate cycle positioning
• Income stability assessment
• Age and life stage considerations

My recommended framework:

1. Calculate your "Optimal Leverage Ratio"

• Monthly payment comfort level
• Investment return potential
• Risk tolerance assessment
• Career trajectory

1. Consider Market Timing

• Interest rate environment
• Property market cycle
• Investment opportunity landscape
• Economic indicators

1. Structure for Flexibility

• Maintain refinancing options
• Build buffer for rate increases
• Consider partial prepayment rights
• Plan for potential rental conversion

The key isn't maximizing or minimizing your loan - it's finding the optimal balance that serves your broader wealth architecture.

For in-depth insights on property financing strategies and wealth planning perspectives, follow me on Instagram (@ngooooied) where I regularly share frameworks for navigating complex financial decisions.

Remember: Property financing is just one piece of your wealth puzzle. The goal is integrating it effectively into your overall financial architecture.

The most important information for me is the current interest rate. If the money can be put elsewhere to earn a much higher return to cover the interest rate then I would take more loan. but if the interest rate is very high, I would pay more cash (or not buy the property at all).

Check interest rate to aid your decision.