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Asked by Anonymous

What is your opinion on using only cash every month to pay for hdb loan repayment instead of using full OA CPF to pay hdb loan every month?

So that can Transfer what is above 20k in OA to SA every month to reach the FRS in shorter time?

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  • Loo Cheng Chuan
    Loo Cheng Chuan, Founder at 1M65 Movement
    Level 6. Master
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    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.

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  • Jason Sin
    Jason Sin
    Level 5. Genius
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    Answered on 30 Nov 2018

    Yes, it is a good idea. The interest of your fixed deposit is lower than the interest of your CPF OA. Hence it makes sense to use cash instead of CPF OA to repay your hdb loan.

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