<rp id="ypf3m"></rp>
<em id="ypf3m"><ruby id="ypf3m"></ruby></em>

  • <nav id="ypf3m"></nav>
      <sub id="ypf3m"><listing id="ypf3m"></listing></sub>

        HWZ Forums

        Login Register FAQ

        Cash or CPF for hdb?

        Like Tree8Likes
        Reply
         
        LinkBack Thread Tools
        Old 26-07-2020, 10:00 AM   #1
        Banned
         
        Join Date: May 2020
        Posts: 100
        Cash or CPF for hdb?

        Seeking advise from financial gurus here. I have around 400k cash and 300k in cpf.

        Planning to buy a resale hdb for stay of around 400k. Would prefer not to touch my cpf to earn the risk free interest and withdraw the excess after minimum sum when hit 55. Already moved maximum OA to SA. i believe the interest itself will cover any increase in the minimum sum. so any excess in OA will be available for withdrawal after 55. As for paying for the hdb, I intend to take bank loan while slowly using my cash to earn around 2% - 3% interest (low risk bonds or deposits such as dbs multiplier).

        Not intending to go into investment as it is not my style. Anyone have a better financial advise for me?

        Last edited by DragonKnightMaster; 26-07-2020 at 12:07 PM..
        DragonKnightMaster is offline   Reply With Quote
        Old 26-07-2020, 10:39 AM   #2
        Senior Member
         
        Join Date: Jun 2000
        Posts: 896
        Seeking advise from financial gurus here. I have around 400k cash and 300k in cpf.

        Planning to buy a resale hdb of around 400k. Would prefer not to touch my cpf to earn the risk free interest and withdraw the excess after minimum sum when hit 55. As for paying for the hdb, I intend to take bank loan while slowly using my cash to earn around 2% - 3% interest.

        Not intending to go into investment as it is not my style. Anyone have a better financial advise for me?
        1. No investments means ruling out potential returns.
        2. Risk of rising interest rate with a bank loan.
        3. Simply not possible to earn 2-3% return on cash in current low interest climate without investment. If you have such lobang, please share as we are interested to know.
        4. The low risk solution will be to buy the resale with cash. But I don't think you'll accept it anyway.

        We wait for others to comment.
        zoneguard is offline   Reply With Quote
        Old 26-07-2020, 10:40 AM   #3
        Arch-Supremacy Member
         
        Join Date: Oct 2016
        Posts: 10,163
        Ask youself, buy for own stay or investment?
        A Better Tomorrow is online now   Reply With Quote
        Old 26-07-2020, 10:43 AM   #4
        High Supremacy Member
         
        reddevil0728's Avatar
         
        Join Date: Dec 2005
        Posts: 33,582
        Ask youself, buy for own stay or investment?
        can buy HDB for investment 1 meh. if buy HDB now means it will be the first property purchase what no?
        __________________
        Whatever floats your boat...
        reddevil0728 is offline   Reply With Quote
        Old 26-07-2020, 10:47 AM   #5
        Arch-Supremacy Member
         
        Join Date: Jun 2010
        Posts: 12,325
        Seeking advise from financial gurus here. I have around 400k cash and 300k in cpf.

        Planning to buy a resale hdb of around 400k. Would prefer not to touch my cpf to earn the risk free interest and withdraw the excess after minimum sum when hit 55. As for paying for the hdb, I intend to take bank loan while slowly using my cash to earn around 2% - 3% interest.

        Not intending to go into investment as it is not my style. Anyone have a better financial advise for me?
        There are a couple things that donít add up here. In particular, where are you going to earn 2%-3% interest on ~$300K cash? You probably arenít. I would assert that you are investing, albeit in a relatively low yielding, ultra conservative way.

        You could do this. In these circumstances you would/should push your OA dollars into SA for the higher interest, as early and as much as allowed probably. Youíve got gobs of liquidity and have the mortgage fully covered should interest rates spike, so no problem there. I wouldnít be quite so conservative on the investment side (and am not), although in a real sense Iím more conservative since Iím in pretty great shape no matter what happens to the Singapore dollarís value. In other words, a reasonable degree of global investment diversification makes a lot of sense to me, and I donít think zero is reasonable at your level of wealth. Otherwise, congratulations really.
        BBCWatcher is offline   Reply With Quote
        Old 26-07-2020, 11:00 AM   #6
        Arch-Supremacy Member
         
        Join Date: Jun 2010
        Posts: 12,325
        4. The low risk solution will be to buy the resale with cash. But I don't think you'll accept it anyway.
        No, I disagree about that idea. Right now you can get a bank loan with a fixed, low interest rate for 3 years, with no prepayment penalty thereafter, and reliably earn greater than the bank rate across those 3 years. Even CPF OA does that (earns more than the bank rate). In the meantime you preserve liquidity. All of that adds up to much lower risk than plonking down personal cash up front. At the end of the 3 years you then decide what youíd like to do. If mortgage interest rates are significantly higher, and you feel that the best available choice is to accelerate mortgage repayment, great, you can do that. In the meantime youíve printed free money and preserved liquidity for ďblack swan?events.
        BBCWatcher is offline   Reply With Quote
        Old 26-07-2020, 11:14 AM   #7
        Arch-Supremacy Member
         
        Join Date: Oct 2016
        Posts: 10,163
        can buy HDB for investment 1 meh. if buy HDB now means it will be the first property purchase what no?
        There are people who use their HDB bto to upgrade to condo. Not sure if it is possible now.

        However the bto lottery enables the couple to move more towards outskirt of Singapore if they are able to secure a good location unit at mature estates. Or there are people who game the system and mutually part off with benefits.
        A Better Tomorrow is online now   Reply With Quote
        Old 26-07-2020, 11:15 AM   #8
        Senior Member
         
        Join Date: Jun 2000
        Posts: 896
        No, I disagree about that idea. Right now you can get a bank loan with a fixed, low interest rate for 3 years, with no prepayment penalty thereafter, and reliably earn greater than the bank rate across those 3 years.
        http://www.tyskj.cn/1...-post2552.html
        Your advice to the other guy.

        So bank loan for an insurance policy not OK because of rising interest rate but bank loan for a property OK because fixed low interest rate?

        Please enlighten me on your logic so that we can all learn together, thank you.
        zoneguard is offline   Reply With Quote
        Old 26-07-2020, 11:18 AM   #9
        High Supremacy Member
         
        Entry Level PC's Avatar
         
        Join Date: Oct 2011
        Posts: 27,921
        Seeking advise from financial gurus here. I have around 400k cash and 300k in cpf.

        Planning to buy a resale hdb of around 400k. Would prefer not to touch my cpf to earn the risk free interest and withdraw the excess after minimum sum when hit 55. As for paying for the hdb, I intend to take bank loan while slowly using my cash to earn around 2% - 3% interest.

        Not intending to go into investment as it is not my style. Anyone have a better financial advise for me?

        Buy a Freehold Shoebox instead?
        Entry Level PC is offline   Reply With Quote
        Old 26-07-2020, 11:22 AM   #10
        High Supremacy Member
         
        reddevil0728's Avatar
         
        Join Date: Dec 2005
        Posts: 33,582
        There are people who use their HDB bto to upgrade to condo. Not sure if it is possible now.

        However the bto lottery enables the couple to move more towards outskirt of Singapore if they are able to secure a good location unit at mature estates. Or there are people who game the system and mutually part off with benefits.
        yea but my point is, if you buy a HDB, for the first 5 years u can't actually rent it out right? So is either you stay in there or leave it empty for 5 years?
        __________________
        Whatever floats your boat...
        reddevil0728 is offline   Reply With Quote
        Old 26-07-2020, 11:30 AM   #11
        Senior Member
         
        Join Date: Jun 2000
        Posts: 896

        Buy a Freehold Shoebox instead?
        Average asking price is $500K? Which is above OP's budget unless he wants to raise it.
        zoneguard is offline   Reply With Quote
        Old 26-07-2020, 11:33 AM   #12
        Arch-Supremacy Member
         
        Join Date: Oct 2016
        Posts: 10,163
        yea but my point is, if you buy a HDB, for the first 5 years u can't actually rent it out right? So is either you stay in there or leave it empty for 5 years?
        You CAN rent rooms within the MOP period but cannot rent the ENTIRE unit out until MOP.
        A Better Tomorrow is online now   Reply With Quote
        Old 26-07-2020, 11:35 AM   #13
        High Supremacy Member
         
        reddevil0728's Avatar
         
        Join Date: Dec 2005
        Posts: 33,582
        You CAN rent rooms within the MOP period but cannot rent the ENTIRE unit out until MOP.
        ok la. fair point. but
        __________________
        Whatever floats your boat...
        reddevil0728 is offline   Reply With Quote
        Old 26-07-2020, 11:50 AM   #14
        High Supremacy Member
         
        Entry Level PC's Avatar
         
        Join Date: Oct 2011
        Posts: 27,921
        You CAN rent rooms within the MOP period but cannot rent the ENTIRE unit out until MOP.
        Property is a very lousy investment.
        Come I do Maths for you.
        Assuming 400k.
        You rent out and get 2k a month.
        You need around 20 years of rent to break even. (inflation, interest, maintenance fees)

        Compare to say I throw stock market index.
        10years double.

        20 years later = 400%.
        400k become 1.6 million in stock market for 20 years
        vs
        Break Even after 20 years via rental income of 2k per month.



        Also no guarantee rental market will continue to be rosy for next 20 years.
        Entry Level PC is offline   Reply With Quote
        Old 26-07-2020, 12:04 PM   #15
        Banned
         
        Join Date: May 2020
        Posts: 100
        Property is a very lousy investment.
        Come I do Maths for you.
        Assuming 400k.
        You rent out and get 2k a month.
        You need around 20 years of rent to break even. (inflation, interest, maintenance fees)

        Compare to say I throw stock market index.
        10years double.

        20 years later = 400%.
        400k become 1.6 million in stock market for 20 years
        vs
        Break Even after 20 years via rental income of 2k per month.



        Also no guarantee rental market will continue to be rosy for next 20 years.
        not intending to rent out. purely for stay.
        DragonKnightMaster is offline   Reply With Quote
        Reply
        Important Forum Advisory Note
        This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

        Please refer to our Terms of Service for more information.



        Posting Rules

        Smilies are On
        [IMG] code is On
        HTML code is Off
        Trackbacks are Off
        Pingbacks are Off
        Refbacks are On

        Ō÷Ĺū≤∂”„∆ĹŐ®