After a fruitful discussion with a friend who was considering among the options of (1) using CPF to pay in full, (2) take a HDB loan or (3) take a bank loan for his HDB flat, I did quite a lot of calculations, so I thought I might as well share it, in case there are others who face the same dilemma.

Option 1 will need to be the reference point. Based on the assumption of $100k as a ball park figure in CPF where any other amount can be multiplied from. Time frame will be another consideration, but will pick a short time frame of 5 years and any other tenure will compound the differences further.

Option 1, CPF will determine the opportunity cost which will be using (1.25^5 – 1) = $13k.

Option 2 (assuming the $100k in CPF is squirreled away in a CPF investment before …