Is it wise to borrow higher home loan and invest the extra cash?

[Mummy1234]

I can get Priority home loan rates of 2.4% pa and borrow up to S$1.87 mil by showing funds of S$1.8 mil. The extra S$600k cash from the loan amt we can invest for higher returns right? FD rates up to 3.2% and UOB one account has 4%.

Is it a wise or risky move as rates are dropping.

[jim889]

I can get Priority home loan rates of 2.4% pa and borrow up to S$1.87 mil by showing funds of S$1.8 mil. The extra S$600k cash from the loan amt we can invest for higher returns right? FD rates up to 3.2% and UOB one account has 4%.

Is it a wise or risky move as rates are dropping.

moi dun understand wat chiu wanna  do ? borrow $600k and invest?

 

[Mummy1234]

moi dun understand wat chiu wanna  do ? borrow $600k and invest?

 

Yah, I pay interest of 2.4% pa but can invest for higher returns?

[jim889]

Yah, I pay interest of 2.4% pa but can invest for higher returns?

wat is the time frame of chiur investment? chiu rooking for capital gains or stable income / dividends etc.??

say FD and chiur 4% interest chiu only take back 1.6% nia onli max $800/pm for all the trouble dun think worth it pruss chiur admin fees etc. dun think worth it rah.

unless chiu use it to invest in somethign higher return .. moi think dun worth it
 

[Magical Fingertip]

Sounds good with little to no risk. Fd rate is fixed will not fluctuate. But your home loan interest rate might fluctuate if they hike the rate again  but there's low possibility of this happening

[Mummy1234]

Sounds good with little to no risk. Fd rate is fixed will not fluctuate. But your home loan interest rate might fluctuate if they hike the rate again  but there's low possibility of this happening

Ya, home loan rate fixed at  2.4% pa for next 3 years. UOB one currently gives 4% interest and can get the $500 x 2 accounts monthly but we are worried if rates will fall.

[Magical Fingertip]

Ya, home loan rate fixed at  2.4% pa for next 3 years. UOB one currently gives 4% interest and can get the $500 x 2 accounts monthly but we are worried if rates will fall.

Fixed deposit the rates are fixed at the time you open an account. It will not fluctuate

[jim889]

the sibor or watever increase then ho say liao
 

[Philipkee]

I can get Priority home loan rates of 2.4% pa and borrow up to S$1.87 mil by showing funds of S$1.8 mil. The extra S$600k cash from the loan amt we can invest for higher returns right? FD rates up to 3.2% and UOB one account has 4%.

Is it a wise or risky move as rates are dropping.

I don't take housing loans as in cash but only cpf but don't you have to pay back the loan?  Meaning if you borrow for housing loan, how much do you need to payback a month? Plus how is interest calculated?

Example

I bought a car and took a loan for $50k.  Iirc it was 1.99% interest. I calculated the amount I pay every month x 7 years (it was 7 years loan) and I ended up paying $60+ k.  So it's not 1.99%.  Think it's called front loading of interest

Plus if you need to pay back every month, you cannot be keeping $600k as FD cos every month you need to draw down by $2k or so.  And this is just your $600k excess.  Your actual housing loan?

[Mummy1234]

I don't take housing loans as in cash but only cpf but don't you have to pay back the loan?  Meaning if you borrow for housing loan, how much do you need to payback a month? Plus how is interest calculated?

Example

I bought a car and took a loan for $50k.  Iirc it was 1.99% interest. I calculated the amount I pay every month x 7 years (it was 7 years loan) and I ended up paying $60+ k.  So it's not 1.99%.  Think it's called front loading of interest

Plus if you need to pay back every month, you cannot be keeping $600k as FD cos every month you need to draw down by $2k or so.  And this is just your $600k excess.  Your actual housing loan?

I need to keep about $300k to pay back mortgage of $8k a mth for 3 years. Need S$100k for other expenses so only about $200k to invest.

Hubby say not worth it as we have to top up extra $400k in showfunds just to get extra S$240.

Probably won't go ahead with it.