tag:blogger.com,1999:blog-2129847651574313903.post4373370195293819573..comments2023-11-05T16:34:15.506+08:00Comments on Lifelong Financial Freedom in Singapore: My housing loanFreedom Achieverhttp://www.blogger.com/profile/11611341421163339252noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2129847651574313903.post-81520548773232035192009-12-14T12:28:15.356+08:002009-12-14T12:28:15.356+08:00Hi Ashikane,
Thank for spotting the mistake, I a...Hi Ashikane, <br /><br />Thank for spotting the mistake, I always thought that the extra interest of 1% from OA will go to OA account. Really appreciated it.<br /><br />http://mycpf.cpf.gov.sg/CPF/News/News-Release/N_16Nov2009.htm<br /><br />Regards<br />Freedom AchieverFreedom Achieverhttps://www.blogger.com/profile/11611341421163339252noreply@blogger.comtag:blogger.com,1999:blog-2129847651574313903.post-19357249400152363612009-12-14T12:06:33.801+08:002009-12-14T12:06:33.801+08:00Hi Freedom Achiever
First of all, a healthy good ...Hi Freedom Achiever<br /><br />First of all, a healthy good blog.<br />On this topic, a newbie question, isn't proceeds from the 1% goes into the SA instead of OA to boost up that account??<br /><br />RegardsUnknownhttps://www.blogger.com/profile/12197787941409343267noreply@blogger.comtag:blogger.com,1999:blog-2129847651574313903.post-71785458358589950222009-11-11T19:24:06.405+08:002009-11-11T19:24:06.405+08:00Hi PanzerGrenadier,
Thank for the questions. Act...Hi PanzerGrenadier, <br /><br />Thank for the questions. Actually some of the answers can be found in my link @<br /> http://lifelongfreedom.blogspot.com/2009/09/housing-loan-make-it-15-years-or-30.html<br /><br />My calculation is based on month and not year. It is because the housing loan is paid monthly and not yearly. The monthly housing loan payment already includes the interest you need to pay in order to service the loan. For example, out of the $400 that I paid for my loan, $180 may be just for the interest. <br /><br />So you are right to say that 3.5% for first $20000 in OA account would still be less than my outstanding HDB loan amount x 2.6%. But don't forget that the amount over the first $20000 also give you an interest of 2.5%. If you are investing this amount, you might be able to get more.<br /><br />Currently the ratio of my total OA Saving to outstanding housing loan is about 1 : 2. But in a few year time, this ratio will reach 1 : 1. That will mean that I can pay out every thing to become debtless. But I will not do that because HDB loan is considered as good debt. I will use the money to invest something can give me more than 2.6% return.<br /><br />If you still in doubt, feel free to question me. <br /><br />Regards<br />Freedom AchieverFreedom Achieverhttps://www.blogger.com/profile/11611341421163339252noreply@blogger.comtag:blogger.com,1999:blog-2129847651574313903.post-35555721700984916362009-11-11T12:41:12.149+08:002009-11-11T12:41:12.149+08:00Your returns from CPF ordinary account at 3.5% wou...Your returns from CPF ordinary account at 3.5% would still be less than your outstanding HDB loan amount x 2.6%.<br /><br />Have you computed your loan interest expense per year versus the returns from CPF ordinary account not used to pay off your loan?<br /><br />Typically, unless your HDB loan amount is small, the higher interest in CPF OA is not enough to offset your higher interest incurred even on 2.6% loan because the principal amount of loan is much much bigger than your 20,000 in ordinary account.<br /><br />Be well and prosper.PanzerGrenadierhttps://www.blogger.com/profile/15836438378215893219noreply@blogger.com