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
    Level 5. Genius
    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
    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.

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