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I am assuming that your parents' BTO will be solely under your dad's name such that your mum has a free name to purchase a private property after MOP without incurring ABSD.

Whether paying off in full is beneficial really depends on what else you can do with the cash sitting in the bank in the even you do not pay off in full.

Will that cash be put into any investments that can yield better returns that the interest payable for your home loan? If it does, then of course it is more viable that you don't pay off the loan and keep that cash for investment that can generate better returns.

To be fair, it is quite premature to be planning ahead since rules and regulations may change along the way but it is important to stay connected to stay ahead and plan accordingly and you are then able to react better to any changes moving along the way.

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Good day to you.

Please allow me to approach this step by step:
a) Your parents may face challenges in securing a mortgage because of their age; therefore, it would be prudent to cash out for their forthcoming purchase.
b) It is necessary for your mother to be the essential occupier to qualify for an exemption from ABSD when she goes ahead with the condo purchase after meeting MOP.
c) They can concentrate on suitable financial strategies to enhance their wealth while waiting.

Considering the above, your situation is more intricate:
a) It is advisable to secure the highest loan amount and loan period possible, and use your CPF savings to finance the acquisition.
b) Take advantage of financial methods to increase your wealth with any surplus cash you have. Bear in mind that you will need to pay ABSD for the upcoming purchase since you plan to retain the HDB for a duration of 10 to 20 years.
c) You may also want to clarify who will be buying the second property, enabling you to focus on estate planning.

It is wise to start planning early, and if you require my help, we can meet to discuss options.

Navigating a property transaction can be complex, especially with major life events. As a seasoned property consultant with 15 years of experience, I provide informed guidance on complex property matters.

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Hi Sir/Mdm,

It is always good to plan early. With regards to the loan, my personal opinion is that it is okay to leverage on the HDB loan since the interest rates are not very high and it is also a fixed rate. I would suggest minimizing your CPF usage instead as leaving the funds inside your OA account, the govt is paying you interests. For cash, you may use to reduce the loan for the private property depending on the bank interest rates at that point in time.

For your parent's flat, you may start planning for their move, 6 months before the estimated keys collection date. This is to ensure that they will be able to transit smoothly and seamlessly from their current place to the new one without the need for an interim housing solution.

Please feel free to contact me so that I can understand your intentions and assist you further!

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Nick Tan
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Selling our house was a pretty stressful ordeal, as we have already committed to buying our new home and hence have a timeline to meet. Losing a substantial deposit and worse still, not getting our dream home caused many sleepless nights as we are nearing our deadline. I am very glad we have Read More

Hi, appreciate your sharing. Base on your sharing, it will be good to meet up and understand your needs before proposing solution to suit everyone.

Best to settle the interim stay before deciding the next move.
Looking forward to assist you at 9696 4398  or email me at stewartlim96964398@gmail.com

Cheers
Stewart-PropNex (Senior Associate Division Director) Read More

Hi! It's actually an excellent time to consult with agents as most property planning should be done in 3-5 year horizons and with a 15-30 year perspective in mind. Even if there are no property moves might be able to make at this juncture, there are steps you might need to take (e.g. working towards a certain savings goal, refinancing etc) to prepare yourself for those move ahead of time.

From a financing perspective, what you should do depends on your priorities, risk appetite, as well as long term (15-30 year) property strategy.

From a market perspective, while interest rates are low now, they may not stay that way for the long term. Financing costs do add up even though it sounds like you are paying a little amount of money every month, but you have to balance that against your potential free cash flow as a family for retirement, properties and other needs.

From a property perspective, it sounds like you already have a rough idea of what you might want to do. Will be happy to advise on how to make that a reality, and also raise alternative options that you may consider depending on your priorities.

I'm a Harvard graduated real estate agent with a degree in economics, and have supported clients on more than $1 billion in transactions. Feel free to reach out below and we can chat further! :)

Kay Cloud
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You’ve got quite a solid setup planned, and it’s good that you’re already thinking years ahead — that gives you flexibility.

For your first question, it’s usually not ideal to fully pay off a BTO early, especially if your HDB loan rate remains around 2.6%. That rate is relatively low, and it’s often wiser to keep your CPF and cash liquid for higher-yield use — like your upcoming private property purchase under your mum’s name. If you repay your parents’ loan later in cash, that’s still fine, but tying up too much CPF early can reduce flexibility down the road. Keeping some liquidity also helps with emergency or renovation needs, especially since your hold period is long (10–20 years).

As for timing, it’s not too early to speak with an agent now. A good agent can help your parents plan the sale timeline, align it with their 3-room BTO key collection, and even advise on how to structure ownership for the next private purchase. Two to three years’ lead time is ideal for mapping out finances and CPF refund implications clearly. Read More

Hi,

1) First thing to clarify is as long as the occupier does not own any residential property, she/he will not be subject to ABSD.
2) This has nothing to do with whether the HDB flat living in has any outstanding loan or not.

3) This is a myth on whether it is wise to clear any outstanding loan as soon as possible using cash. If the cash is able to generate a higher return of 2% annually, then, it is recommended to invest the cash rather than keeping in the bank which properly can only receive 1.x% today. As of today, 3-month SORA rate is only 1.35%. A 12-month FD saving rate should only around 1.6% or lower dependent on different amount and bank.

4) The other saying is you saved 2.6% interest by fully paying of the home loan if you have sufficient cash.
5) I would recommend you to do so if this is your own cash money.
6) My suggestion is your parents should keep the cash for themselves for investment, leisure or even for rainy days than paying of your home loan now.
7) You may do a lump sum payment as and when you receive your bonus or any investment returns annually. You will save some interest by doing so without having relying on your parents. There is no fees involved if you are having home loan with the HDB. You may do so at your HDB branch office.

All The Best!!!

Hope the above answers your main concerns, but if there are more queries, please feel free to contact me at 90110636  or email: ling.ck7@gmail.com if more information is needed.
I'll be glad to assist.

Best regards
Ling CK
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