Property
Should You Pay Off Your Monthly Mortgage Early Or Invest?
By ValueChampion  •  June 16, 2021
Key Insights
  • Assuming an initial home loan of S$200,000, investing the amount into an STI ETF like the Nikko AM can produce returns nearly 10 times as much as the total interest paid on a HDB loan.
  • Paying off the mortgage early - then running into cash flow issues - can cause you to pay more than S$20,000 worth of installments when you resort to taking out a personal loan.
  • Paying off your mortgage early saves you on interest payments (more than 50% if you pay off a S$300,000 loan in 5 years, compared to 10 years).
Singapore’s housing market is among the most expensive worldwide. For instance, the average cost of an HDB property listing is S$532,768 or S$507 per square foot. Compare that to the average monthly salary of S$5,783, and it isn't difficult to see that many Singaporean homeowners will need to use debt (i.e. take out a home loan)...
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By ValueChampion
We distill sprawling marketplaces—for insurance, credit cards, bank accounts, and more—down to choices that represent a sweet spot for value—as in offering the features, returns, or experience we think you need for the smallest outlay. We ask: Is the return on a particular purchase or decision worth the cost or risk of that option, and how does the choice stack up against other options?
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