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Anonymous

26 Feb 2020

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Property

Should I use OA, Cash, or a mixed combination to pay my mortgage?

Situation:

Monthly mortgage payment > CPF OA contribution. My current CPF OA contribution balance will be depleted in 3 years at current rate.

For the difference between monthly mortgage payment and CPF OA contribution, is it wiser to pay using cash right now?

Discussion (6)

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Andy Sim

26 Feb 2020

HR Professional at a Financial Institution

I'm also going to pay for monthly mortgage soon and I'm planning to use CPF before touching my cash, reason being I'm confident I can get more than 2.5% returns on my investments, so would like to use as much CPF first before cash.

Jason Sing

25 Feb 2020

School Of Hard Knocks And Life at School Of Hard Knocks And Life

I recommend using cash to pay your mortgage and to leave your CPF OA savings alone. This is because cash is earning a much lower interest compared to CPF OA. Unless you could use the cash to buy investment that could generate a higher interest, it is better not to touch your CPF OA. Just my humble opinion.

There's an opportunity cost of 2.5% for using CPF OA to finance your mortgage. If you are confident ...

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