"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.
- You are earning interest (2.5% + 1%), by keeping your money in CPF OA.
- No accrued interest incurred from using OA to pay for housing loan.
- 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
- a) have sufficient cash/salary to pay for their mortgage, and
- 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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