Settlement of HDB loan

[Rejoin]

My parents still owed $42k HDB Loan. Recently, I suggested to my parents to use $20k to pay back the loan. The outstanding amount is now $22k.

Next year, we will be paying back another $7k.

The idea is to pay back completely within 5 years.

[superduper]

Hi folks,

Assuming someone hasn't reached 55 years old, but CPF SA about 200k, is it still considered a good leverage for a hdb mortgage balance of $79k, at 2.6% interest subsidized rate with HPS premium, and a balance of about 10 years of tenure.

Regards.

[starlight1968sg]

Hi folks,

Assuming someone hasn't reached 55 years old, but CPF SA about 200k, is it still considered a good leverage for a hdb mortgage balance of $79k, at 2.6% interest subsidized rate with HPS premium, and a balance of about 10 years of tenure.

Regards.

Sorry, dont really understand your qn. Are you asking whether to settle the hdb loan?

[superduper]

Yes, whether to pay up or continue to leverage the loan.

[superduper]

Hi folks,

Assuming someone hasn't reached 55 years old, but CPF SA about 200k, is it still considered a good leverage for a hdb mortgage balance of $79k, at 2.6% interest subsidized rate with HPS premium, and a balance of about 10 years of tenure.

Regards.

Sorry, dont really understand your qn. Are you asking whether to settle the hdb loan?

Yes, wanna get opinions as to whether to settle the loa, or is it better to drag to 10 more years of maximum mortgage tenure, considering the conditions as above.

[starlight1968sg]

Hi folks,

Assuming someone hasn't reached 55 years old, but CPF SA about 200k, is it still considered a good leverage for a hdb mortgage balance of $79k, at 2.6% interest subsidized rate with HPS premium, and a balance of about 10 years of tenure.

Regards.

Sorry, dont really understand your qn. Are you asking whether to settle the hdb loan?

Yes, wanna get opinions as to whether to settle the loa, or is it better to drag to 10 more years of maximum mortgage tenure, considering the conditions as above.

The usual advice would be if you can use that money to earn a higher interest than the interest payable for the loan, then you should drag the borrowing period as long as possible.

[Ikid]

Hi folks,

Assuming someone hasn't reached 55 years old, but CPF SA about 200k, is it still considered a good leverage for a hdb mortgage balance of $79k, at 2.6% interest subsidized rate with HPS premium, and a balance of about 10 years of tenure.

Regards.

Unless you have intentions to apply another home loan, you may want to pay the balance as new loan will be affected by
Total Debt Servicing Ratio (TDSR)?

[superduper]

No intentions to apply for another home loan at all.
So what's the take?

[slmkhoo]

No intentions to apply for another home loan at all.
So what's the take?

As someone pointed out earlier, it depends on what you are doing with the money which you could use to pay off the loan. If it's not earning you more than the mortgage interest rate, then you are better off paying off the loan. On the other hand, if it's earning you more than you are paying in interest, then it's better to pay off the mortgage slowly.

[superduper]

If OA, SA/RA, all exceeds the net balance of mortgage loan, and about 10 more years of loan balance, then what's the take on this?
Drag to maximum tenure?