Anonymous
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?
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Andy Sim
26 Feb 2020
HR Professional at a Financial Institution
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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.
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There's an opportunity cost of 2.5% for using CPF OA to finance your mortgage. If you are confident ...
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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.