hdb loan to take the max?
- Thread starter yuroko
- Start date
hey yuroko, nowadays taking 30 years is common, they even have 40 years loan. for our generation 30 years is pretty much the norm now. if take 30 years, negative aspect is that interest compounded over the years is higher. But if you take lesser years, the monthly payment can be much higher. It depends on how much money you have to pay monthly, and whether you want to pay off your house faster.
as much as possible, try to pay monthly installments through CPF instead of cash. only if your CPF not enough then top up with cash. CPF is there to be used for all these things like paying for house, good to make use and save your cash for rainy day instead.
as much as possible, try to pay monthly installments through CPF instead of cash. only if your CPF not enough then top up with cash. CPF is there to be used for all these things like paying for house, good to make use and save your cash for rainy day instead.
PerfectPixie
Moderator
Ya I agree totally with honeydew! if your CPF have enough its better to use CPF fully to pay for your house. Cash is good and handy, keep it with you unless your CPF not enough then top up with cash ba. Store so much in CPF is kinda wasted to me.
As for loan period, I think 30 years is ok. You can try 30 years first then if you make lots of money sometime later you can consider paying the remaining sum in full so that you can save a lot on the compounded interests.
As for loan period, I think 30 years is ok. You can try 30 years first then if you make lots of money sometime later you can consider paying the remaining sum in full so that you can save a lot on the compounded interests.
sandyfernandes1
New member
I totally agree with Honeydew. If you take a loan for a period of 30 years then interest compounded over the years will be higher. But if you take loan for lesser years, the monthly payment can be much higher. It depends on how much money you have to pay monthly. You can use mortgage calculator (http://www.propertyguru.com.sg/mortgage_loan_calculator) for calculating the amount you want to borrow and see the impact of interest rate and loan term to your monthly payments of your HDB loans.
Yeah, i think using CPF to pay is better too.. the remaining can then be paid by loan. For the loan period, i think it really depends on the financial status of the owners. Some people may have other financial commitments or would like to have more free cash on hand, and hence opt for longer repayment period. Others may not want to incur so much interest or dun wan to owe the banks etc, and hence opt for a shorter repayment period.
The repayment period to take up really depends on the owners. Hope that helps = P
The repayment period to take up really depends on the owners. Hope that helps = P
i agree, that the compounded interest over the years will be quite overwhelming. I would choose to pay in the least amount of time, within my means, and still have some cash available for other uses. However, if you're good in investing your money, then it would be better to choose to pay your flat over max number of years, leaving yourself more cash rich and thus can invest and gain more from the extra cash. however, this is only applicable if you're confident of earning more than the interest accrued.
yeah, the compounded interest over the years is quite scary, especially if you stretch the loan for many years. As much as possible, i would try to loan the least amount (by paying as much down payment as possible), within the shortest number of years, of possible. My target is to pay off the loan in ten to twenty years time, if possible, to incur the least amount of interest, within my means. But based on my combined income now, think i may have to pay within 20 years fastest.. ha ha ha.a
Is it better to loan from Housing Development Board or private banks ah by the way? If its private bank, which is your preferred bank with the lowest interest rate??
Please advise! Hope to hear from you all!
Is it better to loan from Housing Development Board or private banks ah by the way? If its private bank, which is your preferred bank with the lowest interest rate??
Please advise! Hope to hear from you all!
mellowhearts
New member
Hmm...hubby and I also had a long discussion about this before we got the flat and we worked on the principle of having just one income to pay for the housing loan which we took from HDB. And we don't max out his CPF paying for the house so whatever contribution is made, after the deduction for the housing loan, there's still some that will accumulate inside his CPF account. Mine is wiped out when we got the flat but contributions since then will just accumulate in case of changes to his employment status. Haha...
Not needing to pay cash for the flat also leaves us with more disposable cash since we aren't cash-rich to begin with! Haha
gypsy2000: Different pros and cons for loaning from HDB or private banks. Would definitely have to do your own research and set your household financial goal as you decide along the way.
Not needing to pay cash for the flat also leaves us with more disposable cash since we aren't cash-rich to begin with! Haha
gypsy2000: Different pros and cons for loaning from HDB or private banks. Would definitely have to do your own research and set your household financial goal as you decide along the way.
actually when buying a flat, when hdb ask u how many yrs u want to loan. my advise is to say 30. of course, you will not really need 30 yrs to pay.. but remember, hdb loan u can shorten, cannot lengthen. means if u say 20, u die die have to pay in 20 yrs. but if u say 30, 10 yrs later, u strike toto or what, u can pay full.
when u tell hdb how many yrs consider the following:
1) if one of us lose our job, can we continue to pay monthly installment?
2) if we have a kid, can we continue to pay monthly installment?
3) do i know what happen if i default payment for one month, what will happen?
Also, i dont advise on paying cash on top of CPF for the hdb.. tt cash can be used for utility and u are not giving urself any safety net at all.. all will be left hand in, right hand out. means for the next few yrs, u cannot quit ur job, cannot get paid lesser than what u are getting now etc..
when u tell hdb how many yrs consider the following:
1) if one of us lose our job, can we continue to pay monthly installment?
2) if we have a kid, can we continue to pay monthly installment?
3) do i know what happen if i default payment for one month, what will happen?
Also, i dont advise on paying cash on top of CPF for the hdb.. tt cash can be used for utility and u are not giving urself any safety net at all.. all will be left hand in, right hand out. means for the next few yrs, u cannot quit ur job, cannot get paid lesser than what u are getting now etc..
Yeah, tt's an important thing to note -- can shorten cannot lengthen. I also agree that it is not good ot wipe out your cpf and still need to top up cash. Anyone knows if hdb loan can be 40yrs? coz i know bank loan can.. not sure if 40 yrs is at all a good idea tho, considering the amt of interest compounded over the years...
chongeileen
New member
HDB prices are making Singaporeans depress!
Cyber Spider11
New member
I would say, it is important to consider how much you want to take as a loan, then take issue with how much money you can afford to pay without affecting your month expenses, after that it is easy according to the rate of interest dynamic or fixed you would figure out for how long you should stretch the payments.
dont think HDB can do 40 years, think only 30 years but they might stretch it to 40 years soon as the prices keep increasing lor. I will opt for 40 years if have even though theres compounded interest but at least it is less taxing each month, then if do manage to get promotion at work with lots of spare savings then can pay a huge sum at one short at certain points of time and this will help lower the compound interest and yet at the same time dont have to be so afraid if lose the job
carltoneoz
New member
actually home loan is considered a "good" debt cos interest is generally low. hence, even if u can afford to pay off ur loan, it may be a better idea to invest that money instead cos the required returns is only 2.6%. meaning that as long as ur investment returns is more than 2.6%, you are enjoying net gains