Asked by Anonymous

Should I use Cash of CPF fund for my housing loan partial prepayment?

Recently, the bank increase interest rate for my housing loan from 1.7% to 2.4%. I I am still within lock in period, I cannot refinance yet. But bank allow me to do a lump sum partial repayment without any penalty charge. But I do not know whether I should use cash saving or CPF for this repayment. I am risk adverse & do not have investment that give yield of above 2.4%. If i use CPF fund, i lose ordinary account 2.5% int & also mean it will take me longer to reach Minimum sum for retirement.

0
0
Share this
Answer this question
Add
Add
Select
Clear
Add
Write your answer

Answers (2)

Sort by:
Most Upvote
  • Most Recent
  • Most Upvote
    • Mic Mc
      Mic Mc
      8 Answers, 8 Upvotes
      Answered 2w ago

      Cash. but actually, use the cash to pay back your CPF amount used. paying cash to the bank loan doesn't put you at a better position than paying back your own CPF.

      Comments (1)
      2
      0
      Share this
    • Jim Tay
      Jim Tay, Director at Jimtay.com
      10 Answers, 11 Upvotes
      Answered 2w ago

      Considering that you have spare cash sitting around, best to use it to pay off your debts and reduce interest.

      And I second mic mic, that using it to pay off the CPF owed is better, as the cost of using your CPF is higher vs the bank loan interest rate, even at 2.4%. There's a separate working for that which is hard to explain here.

      For the topping back of CPF, the form is available on their website: https://www.cpf.gov.sg/Assets/members/Documents/FORM_HSDVR.pdf

      Comments (0)
      1
      0
      Share this

Download Seedly’s free

Expense Tracking App
Download on the App StoreGet it on Google Play
  • Sync all your banks in one place
    Sync all your banks in one place
  • Quickly add transactions and view reports
    Quickly add transactions and view reports
  • Community Q&A and blog integration
    Community Q&A and blog integration