Should I commit to clearing my reno loan (5-yrs) and hdb loan as soon as possible or use my cash on hand to invest in REITs, Bonds and/or FD first? - Seedly

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Asked by Anonymous

Asked on 10 Apr 2019

Should I commit to clearing my reno loan (5-yrs) and hdb loan as soon as possible or use my cash on hand to invest in REITs, Bonds and/or FD first?

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It would depend on the % of your loan. I'd clear anything higher than 4% per annum.

For your HDB loan, instead of trying to clear it quick, just switch from paying with CPF to paying with cash.

Btw, Bonds and FD will only give you about 1.5-4% return. Clearing your loan would also give you a similar "return".

2 comments

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Besey

10 Apr 2019

Interesting about paying with cash instead of CPF for hdb loan, why so?
Hariz Arthur Maloy
Hariz Arthur Maloy

10 Apr 2019

Because you earn 2.5-3.5% interest on your OA. So you lose out on this and have to pay it back to yourself when you sell your house.