20 Nov 2019
We will be 30/32 yr old when we get our BTO in 2021.
Is it feasible to leave 20k+ balance 5% of property in each of our OA & move the rest to SA before we get our keys?
Our loan will be 270k if we don’t wipe out CPF at all; 1300 monthly which we intend to pay by cash.
If we don’t use CPF; his future OA+SA will be 567k vs 437k while hers is 857k vs 662k.
Assuming we have the same salary as now.
Also; if we intend to sell the house since we pay the loan by cash, does it mean we get cashback?
A) OA to SA?
1) Money transferred from OA to SA is one-way, you cannot reverse it later.
2) Are you sure of the future that there are no need for your OA for housing purposes, education loans (not just for you but your future kids) etc
For that reason, I prefer not to transfer OA to SA.
4% return can be obtained relatively easier with long term stocks or funds.
B) To use cash or CPF-OA is another discussion.
Some may say cash is better because CPF-OA you are required to pay the interest plus 2.5% back to yourself.
I don't see it as negative and I will prefer CPF because CPF money is very difficult to use, and cash is more precious for liquidity and easy available for other opportunities.
C) HDB loans or bank loans.
No doubts, bank loans. Lower than the current 2.6% HDB loan and quite reasonably sure that it will be below 2.6% for the decent future.
Given your loan is the largest at the beginning few years, you can be sure bank loans will have the lowest expense compared to HDB loans.
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