Be afraid. Be very afraid after reading this article. This is an article that all aspiring and existing home owners can ill-afford to miss. And I do mean it because you may live to regret for dismissing the message in this article. Today, I am going to share with readers the devastating effect of HDB Loan combined with CPF Accrued interest.
Many financial bloggers wrote about CPF accrued interest and HDB Loan. However, they may not have the real experience of purchasing an HDB flat or obtaining an HDB loan before. Most of them merely touched on the interest rate figures without providing much analysis on the bigger picture of the housing scheme framework in Singapore. In my perspective, this is dangerous as not knowing the full picture of the law can cost you an arm or leg.
However, I am different because in this article, I am going to provide some basic analysis and share with readers the frightening aspect of the HDB Loan and CPF Accrued interest. At the end of the day, I hope readers can avoid the financial pit-falls and grow wealth with me together. So, if you do find this article useful, please lend your support and subscribe to my blog.
For many decades, Singapore government has been selling HDB Loan as a form of concessionary loan “exclusive” only to Singapore citizens. Undeniably, the interest rate for HDB Loan is extremely stable and is not subject to fluctuating market conditions. This is because the interest rate is pegged to the CPF Ordinary Account (OA) interest rate.
Currently, the interest rate for HDB Loan is pegged at 0.1% above the CPF OA interest rate of 2.5%. Hence, the total interest rate payable for HDB Loan has been 2.6% for many years.
But in life, there are always trade-offs. In exchange for the unbeatable stable interest rate, those who took HDB Loans are essentially forking out a huge premium as compared to those who opted for commercial bank loans. For the past 8 years, interest rates offered by bank for home loans had been consistently below 2%. Of course, nobody can tell when the interest rate will spike as a lot will depend on the policy developments of US Federal Reserve. Thus, this is not to say that bank loans are better than HDB Loan because there is the risk of rising interest rate to be considered.
Nonetheless, what I am going to highlight is not the interest rate payable for HDB Loan, but [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
Read my other articles on CPF:
Not a member yet? You may sign up to become a member of SG Wealth Builder. The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Participate in SG Wealth Builder campaigns
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles and Wealth Forum
- Future network opportunities
SG Wealth Builder Membership
You may sign up for the SG Wealth Builder Membership for only $15 per month. As a member, you can access all the articles, including the premium ones.
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.
[wlm_paypalps_btn name=”SG Wealth Builder (Annual renewal)” sku=”7BB4D00C52″ btn=”pp_pay:l”]