Defer or not to defer.

[Arcachon]

Just an example.

If you use CPF to pay your loan, your CPF interest rate is 2.5%. Then you can defer for another 6 months, it means your OA will not be disturbed for the past 6 months. You allow the CPF interest to recoup and earn.

That is assuming your interest rate is 1.4-2% or less.

https://www.mortgageconsultancy.com.sg/post/should-i-take-up-the-corvid-19-home-loan-deferment-relief-package

[Arcachon]

Accrued interest-only happens on deferred principal. If you're early on in your loan repayment, you are paying more interest than principal.

Deferred interest does not accrue interest according to this scheme, the amount is then amortised over the remaining loan tenure.


In essence, you're getting 6 months of interest on your deferred-interest payments (more since it is amortised over the loan tenure), and if your cpf / bank or investments can gain more than your loan rate, you are also earning on the deferred principal.

https://forums.hardwarezone.com.sg/eat-drink-man-woman-16/more-than-17-000-applications-defer-mortgage-payments-virus-hits-home-6264578-14.html

[Arcachon]

If you secured a good interest rate from 1.4 to 1.68% I do not see reasons not to defer if you already have a good CPF OA mechanism which guarantees a 2.5% interest.

If your CPF OA and SA are lower than the initial 60K, it is also a good chance to earn an additional 1%.

Good hacks for young people for the next 6 months.

This deferment could be jolly well be extended if the Singapore government foresee COVID disruption could be longer than it estimated in early April.