Asked on 24 Nov 2019
Furthermore, what is the maximum age i can service the loan? I am 43 years old currently.
Most of what you have asked has been answered already, but I will take the opportunity to point out one thing: The decreasing allocation to CPF OA as you age. (this assumes you use your OA to pay the loan) Currently at 43, 21% of your income is allocated to OA, subjected to a cap of $6000, this equates to $1260 if you are earning $6000 and above. (For simplicity I'll use $6000 as a figure.)
Now, at 51, that allocation has dropped to 15%, or $900. If your OA is perpetually close to 0 due to you paying your bank loan from your OA, you might suddenly find yourself having to fork out ($1260-$900=$360) cash. At 61, it gets even worse. Your OA contributions will drop to $210, and you will find yourself paying $1050 in cash monthly.
Of course, we can't forget that AWS, bonuses, interest spillover, etc will help to buffer your OA to an extent. But you'll want to keep this in mind so that you don't get a shock when you near your retirement years.
No matter how much CPF you have, the bank loan requires 5% cash. (prudent requirement set by bank).
Banks usually provide mortgage term up to your age of 65 (some banks may offer till age 70).
HDB loan has no cash requirement. I will strongly stick to the bank loan because of the much lower interest payable now. You will save a lot in the long run.
For bank loans, you will need a minimum downpayment of 5% in cash. In most cases, you will be able to get a loan up to age 65. Different banks may have different policies.
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24 Nov 2019