Search

Should I pay more monthly for a shorter loan or pay as little as possible but full term tenure?


Another excellent question, and also a very subjective one. No right or wrong answer, really depends on your comfort and affordability. Also taking in consideration your lifestyle, children's school fees, tuition, car loan, credit card etc. So every individual will give a different opinion on this subject matter.


But let me breakdown for you so you can make up your own mind on this. I'll split the comparison between Bank loan and HDB loan as well.


Lets assume we take a loan amount of $300k


HDB Loan

For 25 yrs tenure

Monthly Instalment = $1,361

Total Accrued Interest = $108,303


For 15 yrs tenure

Monthly Instalment = $2,015

Total Accrued Interest = $62,614

------------------------------------------


Bank Loan

For 25 yrs tenure

Monthly Instalment = $1,200

Total Interest = $59,943


For 15 yrs tenure

Monthly Instalment = $1,862

Total Interest = $35,201



So, as you can see from the illustration above, taking a shorter 15 years tenure and paying more monthly, you will definitely save a lot on the interest.


In my opinion, if you can afford it, paying more monthly but on a shorter tenure is better, as you can save more from the huge interest. But of course, this again bows down to your lifestyle as we have other commitments elsewhere to.


Do you think it's worth the savings? Share your thoughts on our forum.


Looking to sell your property and still wondering which is better? Contact us at +65(9062-2444) to discuss.


Visit our Website: mrproperty.sg

Follow us on Facebook/ Instagram: @mrferdi.property




2 views0 comments

Recent Posts

See All