facebookWith the current financial crisis, bank rates are at a low. Should we fund for our housing using a bank loan or HDB loan? Since interest rates are low but may fluctuate in the future.? - Seedly

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With the current financial crisis, bank rates are at a low. Should we fund for our housing using a bank loan or HDB loan? Since interest rates are low but may fluctuate in the future.?

AMA Endowus

Discussion (2)

What are your thoughts?

Samuel Rhee

Samuel Rhee

26 Aug 2020

Level 8·Chief Investment Officer at Endowus

Hi Flo,

I would recommend that you fund your housing by bank loan if you can afford the cash downpayment. The HDB loan is tagged to CPF OA rates. In the case that interest rates increase in the future, CPF OA rates may increase and consequently HDB loans interest cost will increase.

You may want to enjoy the historically low bank rates now than pay for the 2.6% HDB bank loan rates.

Maisul

Maisul

23 Aug 2020

Level 9·Youtuber at Google (Channel : Say Do Invest)

Bank loan might look interesting for now but when the economy recoveres, that is where HDB loan wins.

HDB loan offers a standard and fixed interest rate.

Whereas bank loans fluctuates over time. so pros and cons.

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