Absolute Cost of My House

I did a quick calculation of the actual cost of my HDB flat today. While I bought the flat from HDB at a low $300K, when I add up interests at 2.6% for a 30 year repayment period of the mortgage loan, it actually adds up to cost in absolute dollars of over $400K.

That is simply quite amazing!

That is an additional $100K more than the mental figure I had in my head.

It happens all the time when people ask me how much I bought my flat for, I simply give them the price at which I bought it from HDB.

But today, after doing a real calculation of how much in absolute dollars and cents I am paying, I realise that the figure I ought to be quoting them is actually $100K more. That is of course if I do not make any early repayment of the mortgage loan and if I do not sell my house within the 30 year timeframe.

This sorts of shifts my thinking abit about whether I ought to repay a part of my loan earlier with cash sitting in the bank that is earning an interest rate lower than 2.6%. Food for thought...

Paying Housing Installments With CPF

I visited one of the branches of HDB's office today to start paying a greater percentage of my housing installments using my CPF monies instead of using cash.

I have been paying close to $500 cash with the rest of the housing installments paid by my CPF. However, I decided to use more of my CPF monies to pay for my housing installment so that the amount of cash that I will pay is really nominal now (less than $100). This should free up some cash and provide a little more flexibility for me.

I was surprised at how efficient and how fast the service was. I spent less than 15 minutes there to settle everything even though it was a Saturday morning where one would expect things to be working a little slower.

So now I am paying $1000 per month from my CPF monies for my HDB flat. I don't think I will have much CPF money for the next few years.

For those of you who are unacquainted with Singapore and acronyms like HDB and CPF here is a brief explanation:

1. HDB - Housing Development Board. One of the first few statutory boards established by the Government under the Ministry of National Development to take care of the housing needs of Singaporeans. The high rise apartments or flats that are built by HDB are called HDB flats. Most Singaporeans (around 80%) live in these HDB flats which vary in shapes and sizes, and are distributed across various town centres in Singapore.

2. CPF - Central Provident Fund. Another stat board formed. CPF is a social security savings plan for Singaporean's retirement. Over the years, it has been expanded to allow Singaporeans to purchase their HDB flats and pay for medical bills too. When people refer to CPF in Singapore, they commonly refer to their CPF monies which are kept in this account.