AMA 1M65

Asked by Anonymous

Updated on 18 Apr 2019

Would you advise people to pay for their HDB mortgage using cash instead of using cpf?


Answers (2)

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Good Day Every Day
Good Day Every Day,
Level 6. Master
Answered on 30 Nov 2018

Yes, it is advisable. 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 mortgage.


Loo Cheng Chuan
Loo Cheng Chuan, Founder at 1M65 Movement
Level 6. Master
Answered on 07 Nov 2018

I am a believer that if you can harness the high interest from the CPF Special Account (4%), I should consider a HDB loan quite healthy because it only carries about 0.1% above the OA interest rate (currently at 2.5%) and I can arbitrage the difference. Hence, I advocate the use of a housing mortgage loan as a means to arbitrage between the Special Account and HDB Housing Loan.