Hi,
1) True that the current bank rate (~1.4%) is far more attractive than the HDB loan (2.6%), which is always tied 0.1% more than your CPF interest.
2) You have to know that by taking up a bank loan, your max loan is only up to 75% as compared to an HDB loan of 90%.
3) You have to prepare 5% cash, and/or 20% CPF for the down payment to switch to a bank loan.
4) There is no lock-in period in HDB loan. There is a lock-in period of 1 to 2 years dependent on the package chosen.
5) You are allowed to reduce your HDB loan from time to time at your HDB branch, with no penalty or cost involved.
6) Bank loan does not have such flexibility, every time you choose to pay up lum sum to reduce or clear up your loan. There will be admin charges of ~$2,000 or more dependent on the agreement signed.
7) You will not be able to switch back from a bank loan to an HDB loan in the future.
8) You have the flexibility to switch from bank to bank in the future once you fulfilled the lock-in period at no cost. However, you might encounter legal & admin charges every time you do a refinance to switch to another bank.
9) At the current policy, you are allowed to keep up to $20k in your CPF OA for rainy days.
10) Banks don't look into your CPF OA, you may loan as much as you wish as long as you fulfilled the MSR assessment, but up to 7%% LTV only.
11) If you have taken an HDB loan for your current flat, your BTO HDB loan shall be considered as a 2nd HDB loan. Under the "Right-Sizing" policy, the total amount of HDB loan will be reduced by CPF refunded, and up to 50% of the cash proceeds from the disposal of existing owned HDB flats.
This is to facilitate financial prudence and prevents over-borrowing.
Hope the above answer to your main concerns, but if there are more query, 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
90110636
ling.ck7@gmail.com
https://R056727F.propnex.net/
https://www.facebook.com/Homesellerbuyer
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