Property
Monthly Housing Installment: Use CPF or Use Cash?
By Investment Stab  •  December 21, 2020
"Should I pay my monthly property installment using CPF or cash?" This is probably a very common question people who just bought their house think of. Which should you choose? Let's find out! Scenario 1: Use cash to pay for mortgage, CPF money remains in CPF This is the least common way Singaporeans tend to pay for their property.
  1. You are earning interest (2.5% + 1%), by keeping your money in CPF OA.
  2. No accrued interest incurred from using OA to pay for housing loan.
  3. You will have less cash on hand, thus it is not recommended to do this UNLESS you have quite a sum of cash or income to sustain your monthly mortgage.
Usually, those people that I know do this tend to 
  1. a) have sufficient cash/salary to pay for their mortgage, and 
  2. b) are keeping their money in CPF to earn the high interest because there is no where else that pays 2.5% (or 4% if you transfer to SA).
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By Investment Stab
We are a group of Singaporean students who are curious and interested in Finance. As we dive deeper into this area in search of more knowledge, the more debates and differences we have. We also realised that financial literacy is not strongly inculcated in the younger generations, leading to numerous costly mistakes. Some of such includes believing in "high profiting" scams such as land banking and buying unnecessary investment schemes which are often motivated by the salesperson's personal interest ...
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