WHEN MORTGAGE IS FULLY PAID - WITH CPF INTEREST INCLUDED Finally a simplified chart covering CPF money to buy HDB. COMMON PERCEPTION - DARK BLUE LINE Many people perceived this is how much our HDB mortgage looks like. After 30 years when mortgage is fully paid, the HDB apartment is fully owned and there is no more cost to the purchase of HDB. Forgetting that HDB is really lease hold. CPF INTEREST - PINK LINE The CPF Interest accrued for using CPF money for the HDB purchase. CPF Interest appears only when the HDB is sold. For those who wants to know how much CPF Interest just needs to draw a vertical line on the year of sale. The difference between the PINK LINE and BLUE LINE is the CPF Interest. THE UGLY CPF INTEREST FROM THE 15TH YEAR CPF Interest is 2.5% compounded on the total CPF money taken out. It is by law to be paid by the government. Now the CPF Interest is paid by the CPF account holder. Since the CPF money is taken by the CPF account holder for the purchase of HDB apartment. This is an additional cost to the HDB apartment, as it will not be included if cash is used in the mortgage repayment. On the 15th year of the mortgage, the CPF Interest becomes 20% of the principal sum. On the 30th year of the mortgage, the CPF Interest becomes 74% of the principal sum. On the 40th year, the CPF Interest is 132% of the principal sum. While the mortgage has already ended, the CPF Interest is still accruing more interest. This will end only after the HDB is sold. FUTURE OF SINGAPOREANS This CPF-HDB flawed policy will not end even with the change of the ruling party. It can only change when Singaporeans learn to manage their PERSONAL FINANCES. Then demand for an overhaul of the flawed CPF-HDB system. From the discussions I have with young and old, it is easier to climb Mount Kinabalu than break the staunch barriers in our minds. Ironically, the maths involved is quite easy and it only takes an hour to learn, but a lifetime to unlearn our brainwashing ...
Posted on: Thu, 23 Jan 2014 05:17:37 +0000
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