Today morning, me and Ms Doraemon went to HDB Hub for an appointment to pay the down-payment for our HDB BTO flat using our CPF OA savings.
Zero cash outlay for the down-payment of a property in District 13 city fringe, beside an MRT station. What more can we ask for?
HDB BTO flat is a property and CPF OA can be used like cash to pay a property. Who says CPF money is not money?
The waiting time was more than 30 mins long but the entire transaction was smooth and took less than 30 mins. We used the Singpass mobile app to login MyHDBPage for submitting the application to use CPF OA funds for the BTO downpayment and signed some documents on joint tenancy agreement and checklist for receiving documents related to agreement of lease. "Lease" is an important word to server as a great reminder that we do not own the land nor the HDB property forever, but merely leasing the space for 99 years, a period of time that most of us could not surpass living on this earth.
The key collection is expected to be in Dec 2026, another 5 years time.
We aim to pay up this HDB flat purely using our CPF OA monies, without taking up any HDB or bank loan. This will let us propel towards financial freedom.
Currently, our CPF monies are still insufficient to pay off the outstanding amount. However, in the next 5 years, by continuing to work, we should be able to accumulate enough CPF OA savings to pay off the outstanding amount.
We will consider making voluntary housing refund of monies back to our CPF OA accounts because using CPF OA monies is akin to taking a personal loan from our own pockets containing retirement funds, at an accrued interest of 2.5%. However, borrowing money from left pocket to right pocket is much safer than borrowing from banks or loanshark.
To be able to sleep peacefully every night with no liabilities nor debts is a divine gift.
To be able to own a roof over our heads is a feat only easily achievable on this Singapore island with a great public housing system.
4 comments:
If you have limited cash saving, using cpf to pay housing is correct.
If you have extra savings in FD earning 0.5% interest then it is wiser to use cash to pay for housing.
Personally i have more cash savings than my housing loan amount but i am not redeeming my loan, currently super low interest rate is a rare opportunity where i can use my cash to invest and get much higher return than the loan interest rate.
Many ordinary ppl prefer to be debt free, definitely not for a investor.
Good day!
I agree that cash could be used to invest to generate returns higher than loan interest rate. I am greedy and would like to be debt free and an investor, enjoying the best of both worlds.
Very commendable savings and impressive saving trajectory there Qiongster.
May I ask if the savings included that of your spouse? If not, it would be even more impressive for a young couple with combined resources.
For a couple with dual incomes, you will realise that 1 + 1 > 2 when it comes to wealth growth rate. As a couple there will also be some economies of scale in expenses eg. on food, household utilities etc...
Keep it up, and looking forward to your next update!
Thanks for reading my blog. I am just tracking my own savings and net worth. I have been saving intensively and investing aggressively, rinse and repeat, hoping to achieve financial freedom before 40s.
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