Question on CPF loan for Housing

Good Day.

My husband and I are young Singaporeans and just bought a our first property 4rm punggol bto. After deduct our current cpf and down payment, we need a hdb loan of 180k. Our combined gross monthly income is 9k.

We would like to ask which loan tenure length is best for couple like us? We plan to purchase a 2nd property for investment.

Would like to seek your views:

1)Get a short loan tenure 10yrs, each month all of our cpf will be used to pay off hdb loan, save the interest. Loans cleared within 10yrs but cpf has no $ accum for past 10yrs.

2)Get longest tenure 30yrs, each mth aft pay hdb loan, there is still remain $ in cpf. Can accumulate the remain $ for investment or earn cpf interest.

In both scenarios, no cash will be used. All loan aimed to pay by cpf. Please kindly share with us your views.

Thank you very much.

Dear ******,

The HDB concessionary interest rate is pegged at 0.1% point above CPF Ordinary Account Interest Rate. It is revised quarterly in January, April, July and October each year, in line with the revision of CPF interest rate.

I do not foresee a huge increase in the CPF Ordinary account interest rate in the future due to policy direction and trend.

The key question is your risk appetite in investing your CPF money. If you invest them over a long time in funds with exposure to riskier products, the chances of beating the loan % is higher. If you traditionally shunned away from investments, my personal suggestion is to pay down the CPF loan in a quicker way.

It is not impossible to get a 5 to 7% rate of return from investing in global funds with your CPF.

I hope I gave you some options and a better understanding.

Let me know If I can schedule a meeting between you and Leong for a deeper dive.

Regards,

Alex Lew