ok as promised, here is the money saving method that was suggested from a friend.
Deciding your loan repayment period with HDB Loans.
First, even if both parties are able to repay the loan in a short period of time, say 10 years, don't take a 10 years loan immediately.
Here's how to do it.
Purchase with a longer period of repayment, stretching it longer than what you can afford now. Eg. if you can repay in 10 years, choose 25 instead.
Service the loan for the next 5 years, then shorten it.
HDB loan interest is compounding interest. You can find the meaning of compound interest here:
http://en.wikipedia.org/wiki/Compound_interest
I didn't do the calculations but I believe it should not be more interest if you applied the method instead of going straight with the minimum repayment period you need.
In this manner, you will have some CPF as savings and while paying with your CPF income, you have a cushion of CPF to fall back on for your mortgage loan with HDB.
This will safeguard you against loss of job during the repayment period.
I will go figure it out with my own loan and then probably post it up for reference.
but ultimately, this will save money in the sense that if anything were to happen, you no need to stress about having to fork out cash to repay the loan.
it encourages people to shorten their loan in a safe manner and allow the cashflow to not be interrupted by any crises.
