Pay off a housing loan

Dear Mr. Tan,

I have a housing loan with a bank. I wish to repay the loan at the end of the 3 year lock-in period. I have the following options:
(a) Do a partial payment and continue to pay the same monthly payment from CPF OA
(b) Do a full payment using cash and CPF OA
(c) Do a full payment from CPF OA

Interest rate on loan: 4.95%
Rate of cash savings : <1%
What is your advice?

REPLY
I suggest that you keep a certain amount of cash savings (say $10,000) to be used for emergencies, and use the remaining cash savings to pay off the housing loan. You can pay the remaining loan from your CPF ordinary account.

Your balance in CPF will earn you 2.5% plus 1% bonus on $20,000. By repaying the housing loan, you can save on 4.95% of interest.