Loan for HDB Resale Property

Hi Mr Tan,

I enjoy reading your blog as it provide me with knowledge on insurance, investment, current affairs, etc.

I would like to consult you on a CPF matter. My wife and I have $230,00 in our CPF and $20,000 already invested in unit trust.

We decided to buy our next HDB flat in the resale market. The flat cost 400k and we are entitle to HDB con loan of 2.6% per annum.

Should I let HDB deduct all of our CPF or should Itake out $40,000 to invest in unit trust?

REPLY

I think it is better as much as possible from the HDB loan and to invest your CPF savings in unit trust (which should earn more than 2.6% per annum).

If you do not wish to take the risk from equity at this time (when the market is high), you can invest in bonds and earn say 3.5% return (i.e. better than 2.6% interest on HDB loan).

You have to invest your money first, before you apply for the HDB loan, as they will take away all of your available balance.