Asked by Anonymous

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

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    • Jason Sin
      Jason Sin
      329 Answers, 419 Upvotes
      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.

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    • Loo Cheng Chuan
      Loo Cheng Chuan, Founder at 1M65 Movement
      63 Answers, 184 Upvotes
      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.

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