Anonymous

25 Feb 2020

∙

Does it make sense for me to pay monthly property mortgage by cash?

About $100k in various investments, $40k cash savings, protection plans sorted. With a combined income of ~$12k (before less CPF), took a DBS home loan.

Thinking whether to pay monthly HDB mortgage of ~$1.8k by cash rather than CPF since
(1) collect CPF 2.5% interest,
(2) I can afford it now and can switch to paying by CPF if I need the cash flow subsequently rather taking eating straight into my savings (e.g retrenchment or wife stop working to take care of kids).

Does this make sense?

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Joe Lee

25 Feb 2020

Adventurer at Game of Life

1) If you can hit FRS, which means you are able to withdraw the extra monies (Including accured interest) when you hit 55.

&

2) You have plans to use your cash to invest/ start a business or put into income generating assets that can give you significantly more interest than 2.6%.

If the above 2 points resonates with you, then go ahead and use CPF to pay as having cash on hand is always better since there are more flexibility.

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Davin

24 Feb 2020

Its perfectly make sense if cash is not a problem.
Ppl use cpf is because don't have cash. You can always go back cpf if u need to.

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Tommy

09 Feb 2020

Senior Associate Director at PropNex Realty

It really depends on your personal cashflow and okding power. You may service your mortgage loan eit...

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I make 180k a month, 300k currently in a mid term bond, 150k CPF OA, and 700k cash on hand from recent sale of first home. Looking at properties ranging from 1.7-1.8m or renting at about 3k a month. Which is better? Should I cash out my 300k bond?

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Buying a condo soon and will wipe out CPF OA balance for downpayment. Should I pay for the monthly mortgage in cash only (build up my OA balance) should I use CPF for the monthly mortgage?