Arcachon
28-04-15, 18:37
I did a calculation based on the 127.5k 4 room flat using the old rule of 20% down payment, and remaining lump sum service by 30 years mortgage.
You need to take out $25,500 from your cpf account to pay the 20% downpayment under the old rule. After 30 years at 2.5% compounding interest rate, the total amount you need to return cpf with accured interest is $53,487.97.
As for the remaining lump sum, $102,000 that you will pay with installments over 30 years to HDB at 2.6% interest rate. The total sum with interest that you will need to draw out from your cpf is $147,005 to pay up the mortgage.
$147,005 will be split into 360 installments of $408.35 to be withdraw from cpf every month to service the mortgage. Every month, once the $408.35 is out of your account, cpf will start calculating the interest as if the money has remained inside. Over 30 years, the principal with interest accured with be $218617.34 ($147,005 principal/ $71,117 interest)
So the final grand total amount you have to return to cpf if you flat is EN BLOC in 30 years is $272105.31. (20% deposit $53,487.97, 30 year mortgage monthly payments $218617.34)
Now compare this with the upfront payment of $127.5k compounding at 2.5%. Grand total:$267,349.
The difference is $4756.
However, if you take a 30 year mortgage, the total amount that you have withdraw from cpf is $172,505 ( $25,500 for 20% downpayment, $147,005 for monthly installments). As you need to use $45,005 of your cpf ordinary account balance as interest payments to HDB.
At the 31st year, $172,505 will compound at a faster rate then then the $127,500 as the principal is bigger.
Now, one wonders why cpf never take the trouble to educate everyone on these significant details.
http://singaporebrides.com/weddingforum/threads/full-deduction-from-hdb-when-purchasing-flat-is-best-option.1242/
You need to take out $25,500 from your cpf account to pay the 20% downpayment under the old rule. After 30 years at 2.5% compounding interest rate, the total amount you need to return cpf with accured interest is $53,487.97.
As for the remaining lump sum, $102,000 that you will pay with installments over 30 years to HDB at 2.6% interest rate. The total sum with interest that you will need to draw out from your cpf is $147,005 to pay up the mortgage.
$147,005 will be split into 360 installments of $408.35 to be withdraw from cpf every month to service the mortgage. Every month, once the $408.35 is out of your account, cpf will start calculating the interest as if the money has remained inside. Over 30 years, the principal with interest accured with be $218617.34 ($147,005 principal/ $71,117 interest)
So the final grand total amount you have to return to cpf if you flat is EN BLOC in 30 years is $272105.31. (20% deposit $53,487.97, 30 year mortgage monthly payments $218617.34)
Now compare this with the upfront payment of $127.5k compounding at 2.5%. Grand total:$267,349.
The difference is $4756.
However, if you take a 30 year mortgage, the total amount that you have withdraw from cpf is $172,505 ( $25,500 for 20% downpayment, $147,005 for monthly installments). As you need to use $45,005 of your cpf ordinary account balance as interest payments to HDB.
At the 31st year, $172,505 will compound at a faster rate then then the $127,500 as the principal is bigger.
Now, one wonders why cpf never take the trouble to educate everyone on these significant details.
http://singaporebrides.com/weddingforum/threads/full-deduction-from-hdb-when-purchasing-flat-is-best-option.1242/