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Property

General

CPF

Gerard Ong
Gerard Ong, Tax consultant at Ernst & Young
Level 4. Prodigy
Answered 2w ago
The best way to approach this decision is to think of it this way - if you use CPF to pay your monthly installments, will you be able to dilligently set aside the extra cash-on-hand and earn a return equivalent to or higher than CPF OA (2.5% - 3.5%). If yes, then go ahead and pay with CPF. If no, you might be better off paying with cash so you don't forego the lost interest in CPF. Assumption: this thought experiment assumes that your monthly cashflow has enough buffer to pay the monthly mortgage in cash. If your cash is insufficient, then there's no need for dilemna, just pay with CPF.

Property

Retirement

CPF

SeedlyTV EP06

Cpfboard
Cpfboard,
Level 5. Genius
Answered 12h ago
Hi Ting Han, Transferring your Ordinary Account (OA) savings to your Special Account (SA) is only available for members below 55 years old who do not have a Retirement Account (RA). For members aged 55 and above, you can transfer your SA, followed by your OA savings to your RA to build up your retirement savings, up to the current Enhanced Retirement Sum. Doing so will help to build your retirement savings to give you higher monthly payouts from age 65. You can try using this online tool to estimate the payouts under CPF LIFE: https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator Do note that transferring your SA/OA savings to your RA cannot be reversed, so you should take into account your personal circumstances to see if it’s the right move for you. Thank you.

Property

Randall Tan
Randall Tan,
Level 4. Prodigy
Updated 3w ago
Here are the pros and cons of using cash or CPF to pay off home Transfer part or all in OA to SA to earn a higher interests of 4-5% https://dollarsandsense.sg/pros-cons-transferring-cpf-oa-sa/ Let's do a simple calculation: Loan amount: $100,000 Loan term: 25 years Interests rate: 2.6% Monthly payment: $453.67 Total payments: $136,100.65 Total interests: $36,100.65 If you use the cash to pay and let the cpf grow at 4% by transferring from OA to SA, CPF balance: OA: $0 SA: $100,000 MA: $30,000 after 25 years OA: $90,000 SA: $266,583.63 MA: $54,500 Total interests earned: $166,583.63 BUT if you choose to use CPF to pay: Accured interests: $62,500 This is the amount you have to refund back to your own CPF if you sell your flat. (If you did not meet the FRS) I hope I did not confuse you. In short, unless you do not intend to sell your flat at all then using cpf to pay your flat will be better. Those spare cash you have can go into investments to generate higher returns. But if you are unable to generate higher than 2.6% interests, then paying off your loan ASAP will be a better option. Because in 10 years' time you will be spending a lot of money on travelling and setting up business and you do not want to have any debts.

Resale HDB

Property

CPF

AMA 1M65

Loo Cheng Chuan
Loo Cheng Chuan, Founder at 1M65 Movement
Level 6. Master
Answered on 07 Nov 2018
It is a good idea because cash carries a lower opportunity cost compared to the CPF OA. With the CPF SA, you actually get up to 6% returns where the HDB Housing Loan is currently at 2.6% interest rate. Hence, I would suggest you to use cash every month to pay for the HDB housing loan.

CPF

Property

Junus Eu
Junus Eu,
Top Contributor

Top Contributor (May)

Level 8. Wizard
Updated 6d ago
Congrats on paying off your BTO! If your age is close to 55 (which I don't think it is) - you wouldn't need to be so concerned about your money being locked up. Of course, you wouldn't want a bulk of your savings being locked up until 55!

Lifestyle

Property

Investments

Allow me to showcase the reason in 3 pictures ! ! ! Take a look at the statistics. Scroll through your social media newsfeed these couple of weeks and what is the most common thing you see, be it on news or shared by friends? JEWEL If you manage to make a trip down to Jewel and stay till the Waterfall Light Show in the evening, just observe the number of people whipping out their phones to insta-story / Facebook Live the show. It makes my hair stand. Imagine each instastory reaches out to approx. 200 followers, multiply that by the number of insta-stories posted and one will then have the realisation that whatever costs involved was worth it. One can pay for advertising (posters, facebook ads) but one can never pay for publicity (i.e. word of mouth, reviews etc.) Furthermore, one has to understand the cruciality of an airport and its surroudning infrasturcture. The Airport serves as the first impression of a country, being the first and the last thing travellers see when they arrive and depart. It's how a country bades a tourist goodbye or hopefully, a see you. And Singapore has indeed done in right. I personally think much credits has to be given to Chairman of Changi Airport Group, Liew Mun Leong, who was also once the CEO of Capitaland whom I believe has a significant influence in this project. A big kudos to everyone involved in this project.
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Property

Family

HDB BTO

EC Condominium

BTO! it is cheaper and the capital appreciation potential (in absolute terms) is about the same at 5 years mark! If you manage to get a BTO near MRT, that would be a bonus!

Property

Sim Min Xuan
Sim Min Xuan,
Level 3. Wonderkid
Updated 4d ago
My teacher has talked to us about this before, so i’ll just dump whatever he had told us here. if you’re interested more in it, you can google to learn more about it. my information might be incorrect in some form or another so read with an open mind! In Singapore, there are no flats that have reached 99 years yet. However, a lot of flats have already surpassed the 40 years mark. The state will be issued back the land after 99 years are up, where they will renovate or demolish the entire building before putting it up on sale again. As for the owners, they have to leave their property with no compensation when their lease have expired with no way of renewing or extending it.

Property

CPF

HDB BTO

Glenn Toh
Glenn Toh, Founder at Whatcard.sg
Level 3. Wonderkid
Updated 2d ago
Never gone through the process, but sharing from personal knowledge (anyone who has personally gone through the process can feel free to correct any errors!) The CPF money will be taken in two stages. For this initial period where you are about to sign the lease/book the flat you only need to pay the 5% downpayment, which can be done via CPF or cash. After this you have the 4-5 year waiting period where no additional payments are required, and then only when the house is complete HDB will take all the money currently sitting in your CPF OAs and use that to paydown the cost of the house. The remaining value will then be your home loan. If you have a lot of money in CPF OA, this is the stage where you will need it in the account to payoff the loan value.

Property

Savings

General

Resale HDB

Jennifer Goh
Jennifer Goh,
Level 3. Wonderkid
Answered 2w ago
Costs of resale HDB resale flats can vary significantly based on factors such as location, amenities and condition. These are just an estimate of the costs for resale flats in 2019: Three-room: S$350,000 to S$380,000 Four-room: S$420,000 to S$550,000 Five-room: S$520,000 to S$700,000 You will probably use both cash and CPF savings for your flat purchase. Your financial planning should therefore cover: 1. How much cash is required 2. Amounts that can be paid using CPF savings Cash are used for the following payments: - Deposit to seller (a maximum of $5,000, paid in 2 stages: the option fee, and the deposit) - Part of the initial payment (if you take a bank loan, or have insufficient CPF savings) - Amount not covered by CPF savings and eligible housing loan amount - Cash proceeds from disposing the last flat if you are taking a second HDB loan CPF can be used for: - Initial payment in whole or in part (depending on whether an HDB or bank housing loan is used) - Partial or full payment for the flat purchase - Monthly mortgage instalments Hope this helps a little! :) Sources: - https://www.homeanddecor.com.sg/articles/91183-property-step-step-guide-buying-resale-flat - https://www.hdb.gov.sg/cs/infoweb/finplan - https://learn.moneysmart.sg/property/how-much-will-your-first-home-cost/ - https://www.singsaver.com.sg/blog/costs-of-bto-flat-resale-flat-ec-and-condo-in-singapore
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