Private or Public Housing Loan?

Buying a HDB flat for the first time can be an intimidating experience. It is probably the first big-ticket purchase in your life that will take the next couple of decades to pay off, so you would definitely want to rake in as much savings as you can.

Perhaps you have not really thought about what kind of loan to take up. If you do not already know, you have a choice between taking up a HDB loan or a bank loan, provided you are eligible for them.

You might want to hold on to your cash and pay off your home loans using your CPF, but did you know that taking up a bank loan allows you to pay less interest? This is because bank interest rates are lower as compared to the CPF Ordinary Account (OA) interest rate which home loans are pegged to.

Recommended Read: Climate change: You can save money and the planet

And while the down payment required to take up a bank loan may be higher (at 20%, with at least 5% paid in cash) as compared to a HDB loan (10%, fully payable with your CPF), you get to enjoy greater flexibility in retaining your savings in your CPF OA. Conversely, upon the collection of keys to your new home, HDB will wipe out your CPF OA balance to reduce the loan quantum required for you to service.

In the following infographic, we run through the main factors to consider while taking up a home loan for your HDB flat, and the main differences between taking up a HDB loan and a bank loan.

Click HERE to see the full infographic.

Recommended Read: Here's how you can opt out of CPF LIFE

Infographics provider:
The team at Redbrick Mortgage Advisory has more than 60 years of banking experience and is proficient in structuring and sourcing for the best financing terms for both residential and commercial real estate in Singapore, Malaysia, USA, UK, Japan, Thailand and Australia.

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

Have feedback? Tell us now!
Subscribe to us or

Follow us: Investment Stab on Facebook

Unhappy with your job? There's something you can do about it.
A. Save up enough money from your job so that you can fire your boss - the problem is it might take some time and some effort
B: Find a new job, search for new opportunities. A career coach might be able to help you with that. And if you are looking for a free career coach, visit Workforce Singapore via the link below.
They can link you up with the career coach and you might be able to find new opportunities on their jobs portal.
http://ow.ly/GY8150wlfrF