Full settlement the HDB loan from the Bank or not?

[musette]

Since the Gov announced the latest ppty cooling measures, we decided to redeem our pte pty loan using cash and cpf.


This is done so that if we decide to buy another ppty, we do not need to worry abt servicing 2 loans and also we need to pay only 20% downpayment for the 2nd ppty. We were paying abt 2 % interest for the loan which was < 200K. No bank was interested when we wanted to convert our loan to get a lower interest rate.

[JonC]

CPF give you 2.5% interest.


You pay fixed 2.6% interest to HDB via CPF (if you are paying via CPF and not bank).

For SGD60k you have in CPF, CPF give 1% extra. SGD20k must be in SA and $40k can be OA (if you have SGD40k) or SA.

Take 3% inflation rate (I know it’s higher).

You have HPS.

Your monthly repayment should be lower than market rental for same type of flat.

So, see no point for full repayment if CPF, unless you are buying second property and you cannot come out with 40% down payment.

Bank is different, interest rate not fixed and bank can take your house if you cannot pay.

[sandyfernandes1]

You should consider the point what Hquek has suggested. Along with that I will recommend you to consult a property expert to know more about it. You can visit Property Guru which is Singapore’s leading property portal and will guide you for the HDB loan settlement and other real estate related issues.

http://www.propertyguru.com.sg/mortgage

[starlight1968sg]

musette:

Since the Gov announced the latest ppty cooling measures, we decided to redeem our pte pty loan using cash and cpf.


This is done so that if we decide to buy another ppty, we do not need to worry abt servicing 2 loans and also we need to pay only 20% downpayment for the 2nd ppty. We were paying abt 2 % interest for the loan which was < 200K. No bank was interested when we wanted to convert our loan to get a lower interest rate.

I shared a similar thought.
If one has cash lying in the bank a/c earning that negligible interest and no big investment plans, maybe it is fine to repay the hdb loan so that the returned money in CPF a/c can continue earning a slightly higher interest rate than the banks'.

[pqy]

Hi any lawyer recommend for handling full settlement HDB loan at reasonable fee. I called OCBC, they advised that i need to engage lawyer for discharge the title.

[kiasubox]

pqy:

Hi any lawyer recommend for handling full settlement HDB loan at reasonable fee. I called OCBC, they advised that i need to engage lawyer for discharge the title.

The last time I engaged Carol teh from 62244118, forgotten the lawfirm name, she charged me $500 only, but my friend engaged her 2 years ago heard she increased the fee but still below $1k, you can ask around do note they charge different price, is not a fixed rate. If I didn't tell my friend about this, she would be paying more than $1k for a lawyer recommended by her bank.

[hquek]

My lawyer was Corinne Foo (Foo & Partners). Can’t recall the charges but definitely few hundred bucks.


Shopping around makes sense.

[pqy]

Hi kiasubox, thanks for the information. The panel lawyer fr ocbc wrote to me and their charge was $573++. i will engage them.

[hquek]

The charges sound reasonable. It’s best to get a lawyer who can act for multiple parties - save cost.

[River]

If the money is sitting in the bank generating negligible interest, suggest repay as much as possible.


If the money can be invested to get an interest higher than the interest of the loan, then don’t repay.

For housing loans, usually the second scenario applies. That’s one important reason why many people invest in property. A large amount of money can be borrowed at low interest rate and leveraged for other investments.