Justina Tan and her husband Bernard Loh decided to take HDB loan to pay for their 5-room flat

[TerrexLee]

For many first-time HDB flat buyers, the HDB housing loan seems the easiest option. Since the Loan-to-Value limit (LTV) is higher than that of bank loans, most young couples end up being able to borrow a larger sum from HDB, making financing the HDB flat more manageable. Not only that, but you can also get everything settled at one go with HDB, adding to the convenience.

Like many others, those were the two main reasons Justina Tan, 40, and her husband, Bernard Loh, 41 decided to take a HDB loan to pay for their current home – a 5-room flat in Depot Road that they bought in 2011.

Back Then, the HDB Loan was the Most Feasible
At the time, the HDB loan seemed the best choice as Justina and Bernard had little savings and wanted to pay the least possible cash up front.

“When we first submitted the paperwork to HDB, we were told that we had to fork out more in down payment if we took a bank loan. That was not ideal as we weren’t earning enough at the time,” says Justina. HDB allows home buyers to borrow up to 90% of the HDB flat’s price, versus only up to 75% for banks.

With their then-income, the couple’s monthly CPF contributions were insufficient to cover the mortgage repayments, so they still had to pay about $500 in cash every month. It was only after three years when they both started earning more that they were able to fully rely on CPF to pay the instalments.

Using CPF to Pay Their Mortgage Instalments Meant It Was “Out of Sight, Out of Mind”

Did the couple know that the HDB housing loan interest rate of 2.6% was significantly higher than the 1.4% to 1.8% that the banks were offering?

Yes, they did. They had also heard about refinancing before, and knew that they could explore their options after a few years to save on interest costs. However, as the years went by, they got increasingly busy with work and other aspects of their lives, and the mortgage gradually became something they just never spared much thought to anymore.

More at https://tinyurI.com/ykwj9dt8

 

[blackmondy]

Is this kind of news even newsworthy ? Can you even outsmart a system that is meant to screw you right from the start with all the loopholes well-covered ?

 

[millim6868]

Sinkies really hv CB brain ,they are fxxx n screw in the ass,n they still turn around n the PAPigs MPs for the fxxx n screw.Dumb ass

 

[mojito]

It is simple economics. 10% down payment at 2.5% vs 25% at 1.5%. Fool also know HDB loan is better than paying rent. Couple is probably unwilling or too broke to refinance.

 

[zhihau]

I love problem sums- case in point.

Say a 4-room flat in a matured estate pegged at SGD$450K. 10% down-payment is SGD$45K, loan amount of SGD$405K.

HDB rate of 2.6% p.a for a 30 year loan works out to be SGD$315.9K of interests, i.e. about slightly over SGD$2K in repayment per month for 30 years.

Affordable?

 

[bobby]

HaHaHa...paying and "owning" a property that is actually only on a long term restrictive lease with many conditions. Don't even have a strata title to show ownership of that pigeon hole.

 

[CPTMiller]

I love problem sums- case in point.

Say a 4-room flat in a matured estate pegged at SGD$450K. 10% down-payment is SGD$45K, loan amount of SGD$405K.

HDB rate of 2.6% p.a for a 30 year loan works out to be SGD$315.9K of interests, i.e. about slightly over SGD$2K in repayment per month for 30 years.

Affordable?

Pay and pay is normal here.
Many people are too busy eg the couple to have a mind to think otherwise.
This is sheep life

 

[blackmondy]

In communists cuntries, "rent" and "buy" can be used interchangeably when it comes to properties.

 

[whoami]

HDB loan safer. 2.6% may not be tat attractive. But interest rates may rise near future. If default in pyt, can still appeal to the authority.

 

[Scrooball (clone)]

I hope this is under 'PREMIUM' content. This is nail-biting, journalistic excellence at its best. The Crème de la crème of investigative journalism. In fact, if this is not nominated for the Pulitzer prize, there could be massive uproar!

 

[zhihau]

Pay and pay is normal here.

Add on stamp duty, conveyancing fees, miscellanepus charges and what-have-you’s.

Altogether now!!! HUAT AH!!!

 

[red amoeba]

They take 2.6% interest in this climate ?

 

[hbk75]

I love problem sums- case in point.

Say a 4-room flat in a matured estate pegged at SGD$450K. 10% down-payment is SGD$45K, loan amount of SGD$405K.

HDB rate of 2.6% p.a for a 30 year loan works out to be SGD$315.9K of interests, i.e. about slightly over SGD$2K in repayment per month for 30 years.

Affordable?

Now ppl just think of getting only. Never mind the debts. When they get older and jobs become dangerous. They will get frighten why pay so long actually is paying interest. Principal sum still owe alot. Old time cpf empty. No cardboards to pick

 

[Cottonmouth]

This house is such a fucking mess.

 

[LordElrond]

HDB loan safer. 2.6% may not be tat attractive. But interest rates may rise near future. If default in pyt, can still appeal to the authority.

You can get fixed rate loan at 1.5% fixed for 3 years, after which you refinance. I would have though HDB adjust to market no?

 

[nirvarq]

HDB financed you default one year installments they still don't kick you out. /shhh.... They wrap up the entire year unpaid installments and then throw it to add to your contract end date mean while they'll gib you ntuc vouchers and then for first 3 months you pay 33% of your usual installments then 50% then full installment again to help you tie over.

PAP does this to the people without much advertising so as not to promote y'all lazy bums take advantage. Where to find this type of gohmen ?! knn... lol..........


Bank loans you try 3 months late just wet and see wat happen ? .........

 

[bobby]

HDB financed you default one year installments they still don't kick you out. /shhh....

Bank loans you try 3 months late..........

It is LPPL....if HDB kick you out, then they must give you another cheap HDB rental flat.

Gahmen already said...no one will be left behind.

 

[frontier]

Can tell that they spent $60 to $120K for renovation and furnitures, did they also mention that they have renovation loan?

 

[bushtucker]

Now ppl just think of getting only. Never mind the debts. When they get older and jobs become dangerous. They will get frighten why pay so long actually is paying interest. Principal sum still owe alot. Old time cpf empty. No cardboards to pick

And then burden their kids to pay off the remaining hdb loan. No long term planning and vision from these lazy bums. They deserve to be screwed many times over by hdb and govt.

 

[Balls2U]

What a poorly designed house cluttered with trash. Still dare to show to the media.