Paying HDB loan in full with cash or with CPF instead? - Seedly
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Samson Woon

Asked on 02 Dec 2019

Paying HDB loan in full with cash or with CPF instead?

Assuming I will have enough cash to pay off my HDB when it’s ready, should I do the same or use CPF for the HDB loan instead? Paying off in cash will wipe out my savings.


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It is up to your personal investing methodology and beliefs.

If you believe that cash on hand can generate you more ROI than the rate CPF is giving, then you might want to consider paying using CPF.


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Teck Lun
Teck Lun, Computer Science / EEE at NUS / NTU
Level 3. Wonderkid
Answered on 10 Dec 2019

May need to check what is your loan rate. If it is lower than 2.5%, i do not think that you should use CPF to pay off the loan. With regards to cash, depends on your expected investment return. If the expected investment returns is expected to be < loan rate, then it will be good to use cash to repay your loan.


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Monies in your CPF ordinary account is meant for your retirement. Accordingly, the use of such monies for your house will result in accrued interest over time.

If you intend to sell the house, then you should consider using cash to pay off your HDB. This prevents the need to pay back the principal and accrued interest.

This is a decision of trade-off that you will need to evaluate. For this purpose, it will be valued to analyse your cashflow in detail and to make the best decision from there.

Personally, I will be paying cash for my HDB.

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