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Anonymous

Posted on 02 Nov 2020

If I have a sum of excess cash, is it better to do a partial hdb loan repayment or a refund to Cpf OA?

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1 answer

Discussion (1)

Partial hdb loan repayment: You reduce the 2.6% p.a. interest and reduce new occasions for the phantom 2.5% p.a. interest to build up.

Refund to CPF OA: You reduce the phantom 2.5% p.a. interest that will materialise when you sell your unit but the 2.6% p.a. interest from your loan still rolls.

The first option makes more sense to me.

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