A Little Thought on Housing Loan

The subsidized interest rate for housing loan for HDB property (or more specifically for HDB flats) is currently 2.6% p.a. (or 3.5% p.a. if not-subsidized). Such rates are not fixed and may fluctuate accordingly to market situations. I was trying to play around with some calculations (based on their guidelines) and came to a rude shock of the kind of interest we may be actually paying.

A typical numerical illustration :

Supposed a flat cost $300000, and A takes a loan of $200000 from HDB.
(You have to imagine yourself how A can come out with the initial $100000 in the first place.)

We further supposed that the mortgage is to be settled in exactly 30 years (with the above mentioned interest rate).

The monthly installment easily works out to be
[ $200000 + (0.026 x 200000 x 30) ] / [ 30 x 12 ] = $989 (approximately)
[ $200000 + (0.035 x 200000 x 30) ] / [ 30 x 12 ] = $1139 (approximately)

Out of this amount paid, $433 ($583) goes to pay for the interest incurred! In other words, only $556 goes to clear the actual "debt" each month! How's that??!! I have yet to take into considering the cost of renovation. No wonder Singaporeans have to be so hard-working. Heh.

If we have the means, I think we don't mind becoming such "official" money lender. Again, the rich only becoming richer. Mm...

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有一位圣者这么说：
因缘不善，是我们造化的责任，不是你换个环境的说词；
环境困顿，是我们转心的妙化，不是你逃避责任的借口。