Last month during kopi break, one of my old uncles drop bombshell. He say he just refinance his HDB loan and save $40,000 in interest. I nearly choke on my kaya toast. You mean just change loan, then save so much money meh?
Turns out, yes — and he say if more people know, they also can do. But problem is, most Singaporeans just lazy to read or scared of paperwork.
From HDB Loan to Bank Loan — How Uncle Did It
Uncle buy his 4-room flat in 2010 and took the standard HDB loan. You know lah, 2.6% interest fixed by CPF. Stable, steady, no need headache. But hor, he recently go compare bank rates and realise OCBC giving home loan at 1.89%.
So what he do? He go apply for bank refinancing. Means he switch his outstanding HDB loan to the bank. Still got 20 years left, so he thought, why not? The banker calculate for him and show that just by switching, he can save about $40,000 over the rest of the loan tenure. Wah, that’s like one family trip to Japan every year for 10 years!
He pay off some fees — legal and valuation costs about $2,000 like that — but even after that, he still save a lot. Plus, OCBC even give him cashback promotion of $2,000. So the switch practically free leh.
Why People Don’t Do? Scared or Blur Only
Most people stick to HDB loan because it’s “safe”. But they never realise that if your loan amount still big and got many years to go, even a 0.5% lower interest can make a huge difference. Just because your friend or relative say “aiyah, bank loan risky lah”, doesn’t mean it’s true for you.
Some say bank loan got floating rate, scared rate go up. But you can choose fixed rate packages too. Uncle say he took 2-year fixed first, then after that monitor again. If really go up too much, he might refinance again — that’s how the smart ones save money.
Do Homework, Can Save Big Money
Now Uncle go around tell everyone, “You all every day play Candy Crush, scroll TikTok. Why not go check your home loan details a bit? One afternoon research can save you tens of thousands leh!”
So hor, don’t just sit there thinking HDB is always best. Go compare. Go check. Go refinance if the numbers make sense. Even if save $20K, $30K — still better than nothing right?
Don’t say I never share. Uncle already shiok shiok enjoy his interest savings — your turn next if you got the guts and not lazy.