Read from an advertisement on the newspaper:
YOUR AFFORDABLE INVESTMENT
Typical 3 Bedroom (Compact)
Sale Price $736,000
LESS
5% Downpayment (cash) $36,800
Balance 15% (CPF/cash) $110,400
Housing Loan (80%) $588,800
Monthly Instalment* $2032.07
Monthly CPF Contribution to Ordinary Account^ $2,300
Cash Top Up per month $0
Potential Monthly Rental Income $3,000
Footnote
* Loan of 30 years based on interest rate of 1.5%
^ For couples aged 35 years and below with total combined household income of $12,000
First of all, you need to read carefully. Your affordable "investment".
Young (professional) couples tend to buy this for the first property. This will drain up all the CPF money from ordinary account. In fact, young professional should be educated good enough to understand a retirement without CPF. The first requirement is to have your own saving. Unfortunately, most if not all Singaporean couples with such financial status will buys a car. CPF drained and retirement without saving is double blows.
Secondly, read loan of 30 years based on interest rate of 1.5%.
What about 5%? The monthly installment immediately grows to $3,161 which you need to top up another $861. The historical interest rate high is more than 9% which grows your monthly installment to $4,738. So, top up another $2,438 per month.
Thirdly, read aged 35 years.
CPF contribution decreases based on age group. I bet you don't know about this. The older you grow the more contribution goes to Special Account and Medisave Account. So, now you understand how to read the fine footnote.
So, spend your CPF money smartly.
