Should You Use CPF or Cash To Pay Your Housing Loan?

[@KelvinLearnsInvesting]

The first 1,000 people to use the link will get a 1 month free trial of Skillshare: skl.sh/kelvinlearnsinvesting08222

[@chaangru]

Good job in pointing out the negative cash sale! Some agents are actually clueless about this.

[@michaellee_sg]

I took a 18-year hdb loan, but cleared it in 5 years. However, I have not done any HDB Housing Refund. Instead, I have been doing RSTU to SA to enjoy tax rebates. If I were to do it again, I might stretch out the repayment of the loan so as to use the cash to invest. However, reality is that my head then couldn't think in that money-savvy way until I had cleared my mortgage. Blessing in disguise now is that, with my home loan paid up, I have more cash freed up for investment, incl. starting an SRS account and investing $6k per year via robo-advisor StashAway. At age 50 now as a freelancer, I have only just reached my BRS, but if I continue to have part-time employment and RSTU $8k each year, I expect to reach FRS when I hit 55. If I don't, I might RSTU more if my cash balances then allows.

[@desmondsim7881]

no need to worry if unemployed when you clear the loan. I planned to clear but i can also reduce to a point that 20k in OA can support the repayment.

[@michaellee_sg]

@@desmondsim7881 Oh ya, 20K in OA is a good magic number according to @HoneyMoney also, cos anything beyond can be used to invest.

[@JRambonian]

My rule of thumb is: Keep aside at least 100-200k cash on hand (can park at SSB) as emergency funds and any surplus invest or pay your mortgage using CASH. So if u do not have at least $100K liquid cash, just use your CPF to pay your mortgage.

[@kohchongseng6470]

I used to be use cpf to pay my house loan, end up total interest to top up into cpf around 60k for 12 years period of time, after selling my EC, I manage use all cash to pay my current house. Now I’m enjoy 2.5% and 4% interest for OA and SA. By the way when SA reached full retirement sum, u don’t need to worry about every year increase full retirement sum anymore as your interest is more than enough to cover the amount of increased.

[@xaviertoh1059]

Accrued interest gets credited back to ur cpf anyway which u can use ur cpf to buy another house . Assuming if u are upgrading to a private hse from hdb, u will need to pay upfront 25%, then it is better to use cpf to finance ur hdb and use the cash to Invest

[@lktan224]

How many young Singapore can pay their mortgage in cash ?

[@letgotothemoon8174]

Dear Kelvin, maybe I dont recall you are talking about investing TLT? Appreciate if you can advice it is better to buy TLT now or keep the cash in the bank? (waiting market to dip before buying next year 2023) Thanks in advance

[@Kalimatullah_Yoh1-1.14]

any suggestion for those with little or no cash but have enough in CPF-OA to settle for a home at one go? One said if you use all CPF OA, you will be risking the retirement funds at old age.

[@MrJasonjace]

Preference/situation or not. SGD is a form of asset. Putting too much into one is definitely not healthy. Even if you love holding cash.. Please hold in multiple currencies. CPF = is ONLY in SGD. Because in CPF, we are talking about locking up for decades. Will SGD be the supreme currency that wont crash while floating along side USD? I mean we are already seeing EUD reaching parity, Lira, Taka, Kip and even big economies like RMB, JPY and RUB are falling significantly.. So.. Just saying that I wont be too sure about it..

[@chaangru]

Btw, you can appeal to cpf / your MP to partially waive cpf accrued interest if you intend to downsize your house to free up cash for retirement.

[@devstruction98]

Hi Kelvin, not sure if you will find this comment but could you make a video on the possibility that Endowus might suffer the same fate as HODLnaut especially since we are using our cpf to invest which is even more risky and what are their safety measures in place

[@KelvinLearnsInvesting]

Check out this FAQ from them: endowus.com/support/360000801513-what-happens-to-my-money-and-assets-if-endowus-closes

[@alexlim7823]

can take the benefits from both side, cash and CPF. Depending on the market and the stage in our lives. If got children then there is a need to be very discipline in saving which I use insurance plans. Now, most insurance plans are not able to give high returns than before, so stock markets become attractive. Anyway, don't invest in things that you don't know or lack of knowledge. If you are using insurance products that are investment linked that likely you are making loses for now. I have 3 profiles making loses with 3k each. It will take sometime to recover. Putting money in CPF will be cash-trapped. I only willing to put in more money into CPF when reaching 55. Since insurance saving plans require 5 years premium depends how much you want to save with interest not more than 4% and wait for another 5 years for maturity; then it make sense to use CPF as a saving tool since have to wait for the same period (10 yrs) to take the money. Do so once you cross 50 if insurance and stock markets are not perform to your expectation.

[@limcheesiongvincent8338]

If I not selling my flat. Then accurred interest is no concern.

[@connietan5012]

If paying by cash, to downsize will definitely get back cash in return right?

[@yitfoonglee8434]

Yeah but if u sell and buy another property using ur cpf .... u jus "rolled over" the accrued interest . Negative cash sale u ll not need to pay the "lost" w own cash .....

[@kokyoung]

Since there is decay and TSLA been performing well, how about shorting this inverse ETF??

[@sleepandrelaxation3395]

Just a quick question, so when selling the house, the accrued interest will return into my own cpf account right?

[@KelvinLearnsInvesting]

Yup, the accrued interest is the amount you owed CPF. So CPF will deduct the money from your CPF account

[@stevenheng3336]

I planning to set aside only for BRS by pledging my flat.. take.whatever Pap allows.... yes, I don't believe what they say..... any moment prata only, cpf stuck there longer.. that's why they enticing sinkies with high interest but I damn worry even though I wish to have the interest..and yes, I paid off the housing loan in full with cpf

[@adamaze2920]

good move...

[@thelivingessentially]

I am a beneficiary of housing protection scheme for my hdb, and early cpf withdrawal due to reduced life expectancy.. as I was diagnosed with critical illness.. so I’m pro using cpf, and don’t pay up early. Save resources as we don’t know what life throws at us as we grow And there’s great policies in SG that helps its people

[@ezann]

Yes hdb owners should not pay up early

[@stevenheng3336]

In fact, old batch are better as we paid lump sum HPS during completing... passed away due to whatever reasons, pap just paid... years later, they go by yearly basic and many didn't renew due to no $ in Cpf and many did BUT DIDNT DECLARE their health but serious how many will declare??? As a result, once passed away, they will find the reasons of death, any medical record , what medicines you taking?!! MANY didn't get the payout!! If you are owing instalments , although it's 100% payout, Pap will deduct the arrears owe and family still owes the arrears... I work in this area so I came across

[@vulturepeak]

@@stevenheng3336 wtf r u saying?

[@NicholasONGYS]

I using CPF to pay, but thinking to reduce the CPF as I'm not exactly sure where to invest right now.

[@valuabletips560]

Good video, if we need to pay back cpf after using it I really don't see the point of using it to begin with

[@teamplayer613]

Should use CPF to pay and use cash to invest. Over the long run (5 years and more), investment pays more than the CPF interest incurred

[@gilazz]

Where if your card up link?

[@KelvinLearnsInvesting]

Sorry, here it is: www.cardup.co/kelinvest

[@ron2040]

So, you put more money from OA to SA account?

[@KelvinLearnsInvesting]

Nah, i wanna forego the additional 1.5% interest. Prefer to keep in OA just in case i want to upgrade the house

[@ron2040]

@@KelvinLearnsInvesting some people said not worth it. Coz if resell, there are certain interest or profit need to pay back to the bank. Not sure how it works.

[@darrenchia304]

Is there a way to pay accrued interest?

[@KelvinLearnsInvesting]

You can make a voluntary housing refund,. Check this out: www.cpf.gov.sg/member/growing-your-savings/saving-more-with-cpf/make-a-voluntary-housing-refund

[@selvat5872]

I believe there is no one-solution-fits-all here. It depends on the cash flow for each individual. If one has adequate cash flow to manage the monthly expenses and meet savings / investment goal, he need not disturb CPF. But when he is not able to meet any of the above needs, he can take support by using CPF for home loans.

[@willie3911]

At a first glance i thought this video advertisement/sponsor is CardUp. 😅

[@shaunphong9885]

Hi Kelvin, great content! I'm a longtime fan, first time commenting... I noticed you didn't mention leverage when using CPF for property? E.g. If i used all my CPF OA for private property purchase because my logic is CPF OA pays for the down-payment (25%) but gives me 4x leverage (assuming 75% loan). So for easy Math I could buy a $1M condo, with 250k CPF OA down-payment. If my property sees appreciation of just 10% (on $1M), I make a profit of $100k which more than covers the 2.5% p.a accrued interest. Any flaws in my reasoning? Of course, leverage is a double-edged sword because it magnifies losses too, but assuming property prices hold or rise slowly, the leverage is good right? WDYT?

[@jm2yn]

CardUp transactions have been nerf-ed

[@AaronKNH]

I also want to retired in my 40s.... buy TOTO huat big big!

[@lmk928]

very good narrative and explanation! keep it up! But...i withdrew my CPF in full and threw everything in something call TSLXXX about 10 years ago...the rest is history. i did not manage to earn that 4% from CPF at all.

[@JRambonian]

Got many self praise crypto/Tsla millionaires sia