This is the first time that I received a query on personal finance issues from a reader. I’m pretty ‘shocked’ actually because I am not a qualified financial adviser but the average Joe facing the same day to day financial problems like man on the street.

The reader has given me permission to post it my site and what’s better than to open this question to people here whom I believe have more knowledge and real life experience than me. I will of course shed my 2 cents worth when  I get back home later.


Just want to check your opinion on my outstanding HDB loan. I have a 30 year HDB loan, now in the 10th year, and thus have serviced most of the interest. Was doing some calculations to determine if it is better to pay the principal to reduce interest on the HDB load, or to leave the money with CPF and earn interest.


Outstanding HDB Loan: S$ 205,000.00

Interest: 2.6% per annum monthly rest

Monthly: S$ 1,138.00 till end 2028.

CPF Ordinary Balance: S$ 54,000.00

Interest: 2.5% per annum monthly rest

Scenario 1

If I don’t touch the CPF:

– Total interest paid for HDB Loan from now till 2028: approx. S$ 55,000.00

– Total interest gained from CPF based on principal of S$ 54,000.00 till 2028: approx. S$ 32,800.00

– That means net interest paid is approx. S$ 22,200.00

Scenario 2

If I use the CPF to pay the outstanding HDB loan:

– Total interest paid for HDB Remaining Loan (S$ 150,000.00): approx. S$ 27,100.00

– This factors in shortening the loan period to 2022 using the same monthly payment value

Net result: It is better to keep the money in CPF, as the net is a gain of approx. S$ 4,900.00 over the next 20 years vs paying the principal loan now.

Would appreciate if you can provide some advice or correct my calculations. I’m using Excel CUMIPMT and FV formulas for calculations.

You can publish this on your blog.

Yong Hwee